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From the PERColator:

For example, in 1978 Congress, concerned about impending shortages of natural gas, passed the Powerplant and Industrial Fuel Use Act. This prohibited the use of natural gas for power generation and industrial use.

As a result, capital investment shifted towards a new generation of coal-fired power plants. If all the coal-fired electric generating capacity added during the last thirty years had been fueled by natural gas, U.S. carbon dioxide emissions would have been about 20 percent lower. This act was repealed in 1987.

They’re doing the same thing today with biofuel subsidies, solar subsidies and the like. Read this terrific piece on how the shale gas revolution snuck up on the US right beneath the planners’ noses. Here is a key paragraph:

One remarkable aspect of the shale gas revolution is that it was not the product of an energy policy edict from Washington, or the result of a bruising political battle to open up public lands and offshore waters for new exploration. Although the Halliburtons of the world are now big in the field, its pioneers were mostly smaller risk-taking entrepreneurs and technological innovators. George P. Mitchell, an independent producer based in Houston, is widely credited as being the prime mover in shale gas, pushing the idea against skeptics. The technology was mainly deployed on existing oil and gas leaseholds or on private land beyond the reach of bureaucrats (for the time being, anyway). That is why shale gas seemed to sneak up unannounced to the media and Beltway elites, even though people inside the gas industry realized several years ago what was rapidly taking place. Mitchell worked the Barnett shale formation near Dallas, but the biggest shale gas “play” is the Marcellus​—​a massive deep shale formation stretching from West Virginia through upstate New York.

If and when natural gas is used to generate a much larger share of our electricity than it does today, and when it becomes essential to power our cars all while lowering carbon emissions, look out for the political class and the environmental class claiming credit for laying the groundwork for this amazing transformation. Shale gas and natural gas in general has exploded despite these bozos. For example, just a few months ago, a college student working for NYPIRG knocked at my door and began asking if I was aware of the serious threat that shale gas drilling was posing for my water supply. I let her go on for about 10 minutes before asking, “Do you know what fracking is?” And followed with, “Do you know how far below the water table the fracking occurs?” And followed with, “Do you know how much water has been shown to be contaminated by gas and other fracking chemicals?” And followed with, “Have there been any confirmed cases of illness in animals or humans from the fracking that has already occurred in NYS?” And then I followed with, “Are you worried about CO2 emissions damaging our planet? Yes, she replied. And I replied, perhaps this is a false choice, but do you want rising sea levels, and all of the other things Al Gore warned us about, or would you worry about a miniscule chance that the fracking you seem to be so concerned about may cause problems with some local water sources?”

Her answers: … c   r   i   c   k   e   t   s.

I want to put up something soon about a research project a student of mine worked on describing the economics of solar electricity production. Solar is becoming nearly competitive with conventional electricity generation because of the heavy subsidies at the producer and consumer end. When folks are asked why solar requires subsidy, the common answer is, “because solar is a public good, or because solar has high fixed start-up costs, which will lead to monopoly production by traditional sources unless we subsidize it.”  Tune in Monday for more.

3 Responses to “More Adventures in US Government Planning”

  1. Rod says:

    Wasn’t it about ten years ago when Al Gore & Co., investors in the carbon credit business, began forecasting how sea levels would rise and flood the Maldive Islands, causing the Maldive Islanders to flee to higher ground (possibly in Maryland or Northern Virginia)?

    That hasn’t happened, and neither have all the other predicted consequences of releasing CO2 and methane into the atmosphere. So instead, the save the Earthers now claim, in a self-protective argument, that ANY change in climate, colder or warmer, is an indicator of mankind’s defilement of the planet. The Weather Channel and The National Geographic now focus on weather “extremes” and claim that any record high or low is evidence of doom. Only authoritarian collectivism, run by the intellectual elite, can save us!

    Fortunately,, that has not stopped drillers from going after the gas trapped in the Marcellus Shale, which is several miles below the deepest aquifers in Pennsylvania. The main environmental risk is that improper drilling techniques would result in failed well casings and would thus release fracking solutions and natural gas into aquifers, or that the fracking solutions that come back up the well after the fracking occurs might spill into local creeks. Last week, the PA Senate passed a measure that puts strict controls on drilling and that provides for the clean-up of any such spills. And the legislature has resisted the temptation to slap big taxes on Marcellus gas, so those taxes will not be an added cost that would reduce the quantity of shale deposits that would be profitable to frack.

    The best part is that it appears that as long as government does not get in the way, prosperity will come to Pennsylvania and possibly to the rest of the country. It’s like the gold rush now up in the northern part of PA — one can’t get a hotel room for all the demand from people in the gas business. Farmers who did not have two nickels to rub together are getting royalties of $200,000 a month, or more. A month! And you know what lies below the Marcellus gas? Oil. And miles below the Marcellus is the Utica shale, which may be even bigger than the Marcellus. All that wealth is just waiting to come out of the ground and make this state and country prosperous again.

    If the state can keep itself from special taxes on gas, it can nonetheless get a piece of the action through increased income taxes on all those rich farmers. What’s more, the state owns vast tracts of land in the northern part of the state that lie between private tracts that are now being drilled for fracking. The state could lease those acres, most of them game lands, to the drilling companies, the state could be paid for the mineral rights and could get twenty percent royalties on the gas produced, and in doing so they could connect the pipeline from the adjacent properties. We are talking about billions and billions here (Carl Sagan lingo).

    The Marcellus find is not the only newly-discovered energy resource in this country. Contrary to the claims of Chuck Schumer, we can indeed drill our way out of our energy problems. And the public benefits from all this through lower natural gas prices as well as lower prices for other energy. It makes much more sense to run diesel trucks and cars on No.2 oil than to burn it to heat your home.

  2. Joe says:

    You’re right about there not being an official report linking fracking to water contamination, but that’s because fracking is exempt from the Safe Water Drinking Act, and it is therefore difficult to study the cause and effect. I’ve been reading reports that fracking has resulted in methane-contaminated drinking water, even to the point where the water is flammable. Many professors and experts also agree that the technique which involves other chemicals in addition to pressurized water can likely cause cancerous. I’m aware of the deadweight created by subsidies, but without offering some incentive it would be hard to urge people to work on a new source of energy. Based on the natural transition, it does in fact seem like natural gas is the next big thing, but given the safety/health hazards it seems wise to regulate/study the technique before allowing it to expand further.

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