Revenue-neutral Carbon Tax Gaining Support

Update:  I posted the article below in July of 2014. Since then, the idea that a price must be put on carbon pollution, as sensible as that idea is, has faded from much of public discourse.  As the reality of climate change continues to sink in, the necessity of cutting carbon pollution will almost certainly rise to the surface again. It seems inevitable to me that eventually this great country will wake up to the need to limit the emissions of carbon dioxide and other greenhouse gases and will enact legislation that will do that.  

What follows below is how I saw things in 2014. For newer views on pricing carbon, see the Carbon Tax Center's website at https://www.carbontax.org/   Citizens' Climate Lobby continues to fight effectively for Congressional action to address climate change.  More at https://citizensclimatelobby.org/

In late June, 2014, with over 600 other members of the Citizens’ Climate Lobby (CCL),  I was in DC to lobby Congress to support a steadily increasing revenue-neutral carbon tax.   We met with over 500 Congressional offices.  

A revenue-neutral carbon tax meshes with both liberal and conservative agendas.  For an example of recent Republican support, see http://www.nytimes.com/2014/06/22/opinion/sunday/lessons-for-climate-change-in-the-2008-recession.html?_r=0 

CCL just released a report of a major study that explains why the concept is gaining traction; it can drastically cut carbon dioxide emissions without harming the economy.  For more, see http://citizensclimatelobby.org/wp-content/uploads/2014/06/REMI-carbon-tax-report-62141.pdf 

Climate Change: Seeing Through the Nonsense; Getting Beyond the Hopelessness

I gave a talk the other night on climate change and what we can do to keep it from being worse.  The talk started with this picture, because on earth, it's mostly about the ocean. 

Here's a link to the youtube: 

https://www.youtube.com/watch?v=ryrWIPMfmv0&list=UUg3AgKNtozO4ebw7Gdp3cRA

Marcellus Shale Gas: Cumulative Production Trends

Data on the production of gas from wells in Pennsylvania are available from Pennsylvania Department of Environmental Protection. (1)  I have just completed a preliminary analysis of some of these data, on horizontal wells in the Marcellus shale region of the state.  Well production data were separated into six groups.  The groups represent wells that started production in each of six different periods; the one-year period from July 2009 through June 2010, and the six-month periods from July 2010 through December 2010, January 2011 through June 2011, July 2011 through December 2011, January 2012 through June 2012, and July 2012 through December 2012.  Cumulative production records were developed for each well, and the average cumulative production curve for each of the six groups was determined.  The data are pictured in the chart above. 

Several things are clear from these data:

a. Although projection into the future of non-linear trends such as these is uncertain, if the trend of production per well continues in a consistent manner, average production per well is on track to equal at least 3 billion cubic feet (Bcf) over a 30-year period. 

 b. Production appears higher from wells that began production after the first period pictured, which ended in June, 2010.  Wells that show production for 5, 4, 3, 2, and 1 periods show higher production than the first group, which has production data for 6 periods.  Perhaps this is due to increasing efficiency on the part of the gas companies, or to more recent wells being concentrated in better producing areas. 

c. Although not apparent from the chart, there is much variation among the wells.  For example, in the group that began production between July, 2010 and December, 2010, the 90^th percentile total production, as of the end of 2012, was 4.25 Bcf, while the production total at the 10^th percentile was only 0.62 Bcf.

d. Also not apparent from the chart, but clear from a closer look at the data, is that some companies’ wells are significantly more productive than the wells of other companies.  This could reflect greater expertise on the part of these companies, either in selection of drilling sites or in drilling and hydrofracturing methods, or both.

Are there implications of these data?  In my view, there are at least two conclusions that can be drawn:

1.  Actual production trends are consistent with predictions of significant long-term production of natural gas from shale formations.

2. Over the long term, increased production of natural gas could result in continuing increases of greenhouse gas (GHG) concentrations in the atmosphere.  Especially problematic could be leaks of raw natural gas, a potent GHG.

It is becoming clear that emissions of GHGs could result in potentially catastrophic climate change that cannot be remediated within a human time scale.  In the face of robust future production of natural gas, arguments for a carbon tax are looking better and better.  Bipartisan support for such a tax seems to be gaining momentum.  Former secretary of state George Shultz and Nobel laureate economist Gary Becker make a strong case for a carbon tax in an editorial that appeared in the Wall Street Journal last month. (2)  They argue that a revenue-neutral carbon tax would benefit all Americans by eliminating the need for costly energy subsidies while promoting a level playing field for energy producers.

I plan to discuss carbon taxes in more detail in future blogs. 

References

(1) https://www.paoilandgasreporting.state.pa.us/publicreports/Modules/Welcome/Agreement.aspx

(2) Shultz, George, and Gary Becker, 2013, Why We Support a Revenue-Neutral Carbon Tax, Wall Street Journal, April 7, 2013 (on line), April 8, p. A19 (print); http://online.wsj.com/article/SB10001424127887323611604578396401965799658.html

Shale Gas EROI: Update

A while ago I posted “Shale Gas EROI: Preliminary Estimate Suggests 70 or Greater.”   I am happy to report that this analysis has been expanded, updated, and subjected to a rigorous scientific peer review.  It is now in the form of an article that I wrote with the help of a colleague, Jackie Melillo, which is now in press (1).  

The expanded analysis focuses on the Marcellus shale, and estimates that the EROI of horizontal gas wells in this region is in the range of 64:1 to 112:1, with a mean estimate of 85:1.  The EROI value is sensitive to a number of variables.  The most important of these is the total production of gas from a well.  In our analysis, Jackie and I estimated that a typical horizontal gas well in the Marcellus shale region will produce 3 billion cubic feet of natural gas over its lifetime.  Recent actual production data suggests that Marcellus wells are on track to produce at least this much.  These data will be discussed in a piece I will post shortly.

An EROI in the range of 85:1 for natural gas is surprising in light of other studies that indicate a much lower EROI.  For example, a recent article (2) depicts the EROI for electricity produced from combustion of natural gas as 7:1. 

How could EROI values for natural gas differ so much?  Although all EROI studies attempt to determine the ratio of the energy output (numerator) to the energy input (denominator), a key difference exists between natural gas and other fuels.  Approximately 8 percent of natural gas is burned, mostly at large regional compression stations (such as the one pictured), to provide the energy to process and compress the gas in order to get it to market.  How this “self-use” quantity is counted makes a big difference in the EROI calculation.  Two EROI calculation methods have been used with natural gas, the net energy ratio (NER) and the net external energy ratio (NEER).  The NER has as its numerator the net output of refined energy to society, and as its denominator the sum of all energy consumed in the energy production and refining process.  In contrast, the NEER’s denominator includes only those inputs that are consumed from the existing industrial energy system, and excludes self-use (i.e., natural gas used to process and compress the remainder of gas). 

If the NER approach is used with natural gas, the 8 percent that represents self-use is included in the denominator, and so the EROI can never be higher than about 12:1.  On the other hand, using the NEER approach, the self-use quantity is subtracted from the numerator, and only the energy actually consumed that could have been used elsewhere in society, such as diesel fuel and electricity, is included in the denominator.   For natural gas, with its large self-use component, the NEER approach leads to a higher estimate of the EROI.

The NER may be a more comprehensive measure of the total energy return from a production pathway, and likely correlates closely with environmental impacts, such as greenhouse emissions, of a pathway.  Conversely, the NEER is a more useful measure of the contribution of an energy source to the energy supply of society because it counts only the inputs that must be produced and delivered externally through the existing energy supply system.  In my preliminary study, and in the article that will soon be published, the NEER approach is used. 

References:

(1) Aucott, Michael and Jacqueline Melillo, 2013, A Preliminary Energy Return on Investment Analysis of Natural Gas from the Marcellus Shale, Journal of Industrial Ecology, in press.

(2) Inman, Mason, 2013, The True Cost of Fossil Fuels, Scientific American, April, 2013, Vol. 308, No. 4, pp. 58-61.

The hope of trees, cont'd; Ginkgo biloba

 

Several years ago, driving to work on cold days, the tips of several of my fingers started turning waxy and bloodless.  This went away when they warmed up, but it was irritating and painful. These were the same fingers that, long ago, suffered painfully from exposure to cold as I rode around on my motor scooter.  It turned out I was suffering from Raynaud's disease, which is a spasm of the blood vessels causing loss of circulation to the affected parts.  I looked online and found there was an herbal remedy reported to work; extract of Ginkgo biloba leaves. (1,2)  I got some and started taking two 500 mg capsules of the powdered leaves daily.

Unlike all herbal remedies I’ve ever tried, this actually worked.  The Raynaud’s phenomenon went away entirely, and has not returned. Ginkgo is purportedly good for the memory as well.  It stands to reason; anything that is good for your peripheral circulation should be good for your whole body. 

Ginkgo now seems like a friend to me, an important fellow traveler on this planet.  Apparently others have felt this way, for ages.  Ginkgo has long been cultivated in China; some planted trees at temples are believed to be over 1,500 years old. The tree is important in Buddhism and Confucianism, and is widely planted in Korea and parts of Japan.  It’s also widely planted in North America and Europe, in part because it tolerates urban conditions so well. (3) The wonderful author Rutherford Platt, noting that Ginkgo is closely related to trees that lived 280 million years ago, wrote, “Ginkgo should be as exciting as a crocodile on a big city street… its leaves are fern leaves, from the age of reptiles… There is no other tree like it, delivered.. from the age of dinosaurs into the heart of our teeming cities…somehow a tree evolved in a bygone age can take our ruthless cities, creating trunk, leaf and fruit from miserable dirt below the scorching pavements.” (4)

My sister-in-law Carol spotted some Ginkgos growing near where she works, and they were old enough to be bearing fruit (which doesn’t happen until they are 30 years old).  She kindly gathered a whole pile of fruits this fall, and I squeezed the seeds out of the malodorous pulp.  The seeds (pictured) are now being stratified, mixed with moist peat moss in the bottom of the refrigerator, getting happy for spring planting.  They’ll go into the ground in April, and more Ginkgo trees should be on the way. 

1.       http://www.ncbi.nlm.nih.gov/pubmed/12710841 accessed 2/8/13

2.       http://www.livestrong.com/article/330576-ginkgo-biloba-for-raynauds-disease/ accessed 2/8/13

3.       http://en.wikipedia.org/wiki/Ginkgo_biloba accessed 2/8/13

4.       Platt, Rutherford, 1952, 1968, Discover American Trees, Dodd, Mead & Co., NY

We Must See Through the NRA and Act on Guns

It’s recently become abundantly clear that the U.S. has a major problem with guns in the hands of crazy people.  No other industrialized nation has anything like the rate of gun-caused deaths as we do.  It’s not likely that the U.S. has a significantly higher proportion of crazy people than other nations.  But we do have more guns.   

The National Rifle Association has to take some credit for this.  They have successfully lobbied Congress for decades to resist even moderate restrictions on gun ownership.  Some of the NRA’s recent positions seem crazy.  The NRA opposes background checks on all gun sales, opposes having to notify police when guns are lost or stolen, and supports gun ownership for people on terrorism watch lists; 75%, 64%, and 71%, respectively, of NRA members disagree with these positions.  And, while the NRA has been lobbying for national legislation making concealed handguns legal everywhere, most NRA members believe that states should make their own laws for concealed handguns.  (For background and details on this information see http://www.huffingtonpost.ca/kapil-khatter/nra-gun-control_b_2372471.html )

Why would the NRA be more extreme than its own members?  A likely reason is that the NRA is not really a gun owners’ lobby as much as it is a gun manufacturers’ lobby.   It’s become a trade organization, with large annual contributions from gun manufacturers.  And, like most trade organizations, it can be counted on to push for whatever will make its corporate members more profitable, anything that will help them sell more guns.

Congress has faced pressures from entrenched manufacturers before.  It faced such from the auto industry when it became clear, in the 1960s, that cars were causing air pollution.  It faced pressure from the chemical industry when it became clear that DDT and other chlorinated pesticides were wiping out predator birds and when it was proved that CFCs were depleting stratospheric ozone.  It faced pressure from the lead industry when it became clear that lead in paint was damaging children’s health.  Congress rose above these pressures and enacted measures that controlled these problems. 

This coming year, may Congress to take a hard look at the acute problem that virtually unbridled gun ownership has created in this country, see beyond the arguments of the NRA, cloaked in the guise of personal freedom and safety, for more sales and profits for the gun industry, and enact legislation that will lead to a major reduction in gun-related deaths.

Things Have Changed

Update: The first paragraph of the post below is as true as ever. But beyond that, what I wrote is wrong. 

My assertion that the availability of petroleum was about to decline was premature.  Interestingly, production of conventional petroleum DID peak between 2005 and 2008, just as Ken Deffeyes and several others had predicted.  What few foresaw then was the advent of fracking, which, as is now clear, changed the picture dramatically.  Fracking enables the extraction of petroleum and natural gas from the source rock itself, not just from reservoirs where these substances have accumulated.  Who knows how long fracking will continue to successfully extract fossil fuels? 

Physical things, like water, sometimes display startling and abrupt shifts in form. Apply heat to a pot of water. The water will get steadily hotter until it reaches the boiling point, and then something dramatic happens; the temperature stops rising and the water steadily turns to vapor, and disappears into the air. Something equally dramatic happens when water freezes. Subject to cold enough temperatures, water’s temperature steadily decreases, until it reaches the freezing point. Then there is no further temperature drop until the water freezes. At that point the water, now effectively transformed into the mineral, ice, continues to get colder. These sorts of shifts, or phase changes, are well known to physical scientists, but beyond the professional experience and training of most economists and social scientists.

But there probably are phase changes in economic and social systems, and it looks like we’re in the middle of one now. The growth of cheap, concentrated energy in the form of petroleum that has underpinned economic growth for generations is gone. The continued failure of mainstream economists and politicians to grapple with understanding this is becoming unconscionable.

Take a look at this chart, from an article that just came out (Murray, James and David King, 2012, Oil’s tipping point has passed, Nature, 481, 433-435). Oil economics changed markedly around 2004-2005 from elastic to inelastic supply. It seems highly unlikely that this change can be attributed to anything other than production of crude oil hitting a ceiling at about the same time. The idea that instead this marked change is due to some sort of political attitude shift that suddently occurred during that short period seems far-fetched.

The abrupt shift in behavior of the oil market looks a lot like a phase change. This shift tells us that things are different now. Things are so different that all bets are off as to the future behavior of the price of oil and the systems that have been built on the ready availability of inexpensive and steadily increasing quantities of it. It seems inevitable that the vast array of systems of the industrial world that depend on this fuel, including, especially, transportation, will go through a phase change of their own, with consequences that are perhaps nearly impossible to predict. To continue the analogy with water; if you’ve spent your whole life understanding how water behaves, you may have a hard time understanding steam.

Those in a position to help decide the future of economic and social systems have to understand that the old order has changed if they are to be able to have a chance of preventing all hell breaking loose. It seems certain that the economy cannot continue to increase its production of traditional goods and services, and the jobs that rely on these, now that the supply of cheap oil is no longer increasing. It also seems certain that we won’t be able to “grow our way out” of this recession/depression and that we’ll have to start actively looking at how a non-growing, steady state economy will function and how to get there.