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The Peak Oil Crisis: Our Harsh Winter Continues
The Peak Oil Crisis: Our Harsh Winter Continues.
It turned out however that the forecasts were wrong and yet more frigid weather poured down across the U.S., drawing down our stocks of natural gas and heating oil still further and interrupting the drilling and fracking of new shale gas and shale oil wells. New forecasts say that the abnormally cold weather is likely to continue through the rest of March and on into early April.
We won’t have the final figures on how much natural gas was drawn from our stocks this winter for another month, but it is starting to look as if our stocks, which normally range from a high of 3.8 trillion cubic feet to a low of 1.8 trillion, could fall to as low as 750 billion and that the total drawdown this winter will be close to 3 trillion cubic feet as compared to the normal 2 trillion. Since November the U.S. has been consuming an average of 91 billion cubic feet of natural gas each day which is 13 percent higher than the five-year average for this time of year.
The key question is whether this can be replaced in time for the next heating season or the ones after that.
In addition to increasing our consumption, the cold weather has also slowed our domestic production of natural gas. Our natural gas imports from Canada, about 7 billion cubic feet per day, are down about 10 percent from last year. It is even colder in Canada and they need their gas to keep warm before exporting any surplus to the U.S.
You will recall that our shale gas wells, which now supply about 40 percent of our total natural gas consumption, deplete very quickly so that many new wells need to be drilled and fracked each year just to keep production level. There are very few conventional gas wells being drilled these days and production of shale gas other than from the Marcellus shale in the Appalachians is nearly flat. The rapid pace our gas wells are depleting means that the U.S. now needs about 19 billion cubic feet per day of new gas production just to keep up with our annual average consumption of 71 billion cubic feet per day.
As a goodly share of this 19 billion cubic feet per day of new natural gas production must come from the mountains of Pennsylvania and West Virginia, it should be apparent that this location is not conducive to drilling and fracking during the cold and snowy winter months. A recent weekly EIA report shows natural gas production in the eastern U.S down by 30 percent from last year.
Last week the Department of Energy issued a report discussing how we are going to overcome this trillion cubic foot deficit in our natural gas stockpiles before the beginning of next November’s withdrawal season. The Department starts with the assumption that the drawdown is not going to be as bad as it currently seems and then posits that if everything goes right – higher production and lower consumption – we might be able to inject a record 2.5 trillion cubic feet into our storage caverns this summer. Even this will leave us about 500 billion cubic feet below where we would like to be next fall.
Natural gas consumption during the next seven months is problematic. If temperatures are unusually high, a lot of natural gas will go into electric power stations to keep us cool. If it is a cool summer, then we might have considerable surpluses that could be injected into our storage caverns. The relatively low price of natural gas, currently about $4.50 per million BTU’s, is another problem.
Some independent analysts say this is well below what it costs to produce shale gas these days and that producers are solvent only because they are making an effort to produce “wet” gas that contains valuable natural gas liquids such as propane which can be sold for enough to offset the loss on the “dry” gas which is what keeps us warm. Gas coming from the Marcellus shale, mostly in Pennsylvania, is generally dry so that there is a good chance that many producers are simply losing money on their natural gas production while waiting for higher prices that will allow profitability.
Looking ahead for the next few years, questions are starting to arise about the long-term sustainability of our natural gas production. This winter will leave us with a major deficit in our stockpiles which unless the weather cooperates is not likely to be made up in the immediate future. Unusually hot summers or cold winters will make rebuilding of inventories difficult or even impossible.
Thanks to the hype about the 100 years-worth of natural gas we are supposed to have in reserve, everybody seems to have an idea as to how to use this bonanza more quickly. Some want to send LNG to Europe so it can reduce reliance on Russian gas. This of course requires liquefaction facilities to make LNG that can’t become operational for many years. Our imports from Canada are shrinking. Our exports via pipeline to Mexico are increasing. Many want to convert our fleet of 18-wheelers to natural gas. The EPA wants to replace the dirtiest of our coal burning power plants with natural gas and there are those who believe that nuclear power plants are too dangerous to keep around.
If even some of these additional uses come to fruition before the end of the decade, our natural gas could become very expensive and even scarce.
Northeasterners turn to burning wood for power | The Daily Caller
Northeasterners turn to burning wood for power | The Daily Caller.
Americans living in the Northeast and Mid-Atlantic U.S. are increasingly turning to a source of heat favored by humans for thousands of years: wood.
More and more people are using wood as their main source of heat as opposed to heating oil and kerosene.
The Energy Information Administration reports that, “All nine states in the New England and the Middle Atlantic Census divisions saw at least a 50% jump from 2005 to 2012 in the number of households that rely on wood as the main heating source.”
Those who switched to wood burning were spared high fuel oil and kerosene prices during this year’s harsh winter.
About 2.5 million households across the country now use wood as the main source of heat in their homes, up from 1.9 million households in 2005. And another 9 million households burn wood as a secondary fuel source for heating.
Millions of families faced skyrocketing energy prices as record low temperatures and snowfall hit much of the country. The U.S.’s constrained pipeline system could not keep up with the demand for propane and natural gas, causing prices to surge and utilities to burn oil and coal for power.
Midwesterners are expected to pay 54 percent more this winter on propane than last,reports EIA, and Northeasterners are expected to spend 7 percent more. Those who live in areas fueled by natural gas will pay 10 percent more this year and five percent more for electricity.
“Cold temperatures have continued to tighten heating oil supplies and helped drive up retail prices,” according to EIA. “Weekly U.S. residential heating oil prices increased by $0.20/gal during January and have averaged near $4.24/gal since the beginning of February.”
But EIA adds that heating oil prices will probably average about one percent lower this winter than last because of lower crude oil prices. Though natural gas spot prices hit record levels during periods of extreme cold.
But what this winter’s severe price swings demonstrate is the danger of over-reliance on one fuel source, says the coal industry. While low-priced natural gas is a good source of fuel overall, gas-fired plants have trouble operating in cold weather — which coal plants have make up.
This winter, gas-fired power plants failed due to cold weather and federal regulations that make it nearly impossible to burn coal.
“This year’s historically cold winter has served as a crystal ball into our future, revealing the energy cost and electric reliability threats posed by the Obama Administration’s overreliance on a more narrow fuel source portfolio that excludes the use of coal,” said Laura Sheehan, spokeswoman for the American Coalition for Clean Coal Electricity.
If the Northeast’s natural gas infrastructure is not improved and prices remain volatile during the winter, it might not be such a bad idea to burn wood for heat. But even that may become harder thanks to federal environmental regulators.
The Environmental Protection Agency recently updated its wood stove emissions standards that would effectively ban The EPA’s new action bans 80 percent of the wood-burning stoves in America, “the oldest heating method known to mankind and mainstay of rural homes and many of our nation’s poorest residents,” reports Forbes.
EIA notes that: “Most households still burn split logs, although wood pellet use has risen in recent years. And while households in higher income brackets are more likely to use wood, those at lower income levels who burn wood consume more on average.”
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Northeasterners turn to burning wood for power | The Daily Caller
Northeasterners turn to burning wood for power | The Daily Caller.
Americans living in the Northeast and Mid-Atlantic U.S. are increasingly turning to a source of heat favored by humans for thousands of years: wood.
More and more people are using wood as their main source of heat as opposed to heating oil and kerosene.
The Energy Information Administration reports that, “All nine states in the New England and the Middle Atlantic Census divisions saw at least a 50% jump from 2005 to 2012 in the number of households that rely on wood as the main heating source.”
Those who switched to wood burning were spared high fuel oil and kerosene prices during this year’s harsh winter.
About 2.5 million households across the country now use wood as the main source of heat in their homes, up from 1.9 million households in 2005. And another 9 million households burn wood as a secondary fuel source for heating.
Millions of families faced skyrocketing energy prices as record low temperatures and snowfall hit much of the country. The U.S.’s constrained pipeline system could not keep up with the demand for propane and natural gas, causing prices to surge and utilities to burn oil and coal for power.
Midwesterners are expected to pay 54 percent more this winter on propane than last,reports EIA, and Northeasterners are expected to spend 7 percent more. Those who live in areas fueled by natural gas will pay 10 percent more this year and five percent more for electricity.
“Cold temperatures have continued to tighten heating oil supplies and helped drive up retail prices,” according to EIA. “Weekly U.S. residential heating oil prices increased by $0.20/gal during January and have averaged near $4.24/gal since the beginning of February.”
But EIA adds that heating oil prices will probably average about one percent lower this winter than last because of lower crude oil prices. Though natural gas spot prices hit record levels during periods of extreme cold.
But what this winter’s severe price swings demonstrate is the danger of over-reliance on one fuel source, says the coal industry. While low-priced natural gas is a good source of fuel overall, gas-fired plants have trouble operating in cold weather — which coal plants have make up.
This winter, gas-fired power plants failed due to cold weather and federal regulations that make it nearly impossible to burn coal.
“This year’s historically cold winter has served as a crystal ball into our future, revealing the energy cost and electric reliability threats posed by the Obama Administration’s overreliance on a more narrow fuel source portfolio that excludes the use of coal,” said Laura Sheehan, spokeswoman for the American Coalition for Clean Coal Electricity.
If the Northeast’s natural gas infrastructure is not improved and prices remain volatile during the winter, it might not be such a bad idea to burn wood for heat. But even that may become harder thanks to federal environmental regulators.
The Environmental Protection Agency recently updated its wood stove emissions standards that would effectively ban The EPA’s new action bans 80 percent of the wood-burning stoves in America, “the oldest heating method known to mankind and mainstay of rural homes and many of our nation’s poorest residents,” reports Forbes.
EIA notes that: “Most households still burn split logs, although wood pellet use has risen in recent years. And while households in higher income brackets are more likely to use wood, those at lower income levels who burn wood consume more on average.”
Follow Michael on Twitter and Facebook
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.