The above clip came from a lunchtime talk that Robert F. Kennedy Jr. gave to the Colorado Oil and Gas Association on July 8, 2010, during the Energy Epicenter conference.
Aside: People who are not from Colorado might need some background to explain the reference to working with Governor Ritter on “1365”. There is another good article titled Colorado Coal Fight Could See Repeat at Nation’s Capital published by Colorado Energy News. End Aside.
Many arms-length observers of the energy industry see it as a monolith that supplies a product that they wished they could live without. What they do not often see is that the industry is full of cracks and fissures caused by aggressive competition for customers. Winning the marketing battles can mean the difference between vast wealth and daily struggles for mere survival as a business.
The natural gas industry has been working hard for many years to overcome some natural disadvantages by emphasizing particular competitive strengths. Compared to coal, natural gas has a substantially higher cost per unit of heat delivered and it cannot be stored in cheap, accessible piles. On the plus side, gas burns more cleanly, can be used directly in low capital cost machines, and can be delivered via a pipeline instead of carried by rail or truck. Both fuels are mainly supplied from domestic sources; both due to a relative abundance of current supply and because both fuels have costly transportation requirements.
It is easy to see by the way that the energy market has developed where each of these features is more important. Natural gas has taken the home heating and cooking markets almost completely away from coal, which supplied most of those energy demands before World War II. For large power plants that are near coal mines, accessible rail or water transportation systems, the savings in cost per unit of heat makes coal far more competitive – among fossil fuels, coal dominates the baseload power generation market.
Natural gas suppliers are not satisfied with their current market position; they want to make inroads into portions of the market that is currently dominated by coal (and uranium). However, even at today’s natural gas prices – which are at the break-even point for some suppliers – natural gas cannot achieve market wins against most existing coal-fired power plants.
Aside: Trying to win competitive battles agains existing uranium fission power plants in the market is even more difficult. Kneecapping is one of the few tactics with some hope of working. End Aside.
That is why more members of the natural gas industry are listening to alliance proposals from people like Robert F. Kennedy, Jr.
In the above clip, Kennedy makes a strong pitch and describes shared interests in hopes of gaining additional clout. I think that most people would agree that his words provide a definite undercurrent of carrot and stick salesmanship. He tells his audience that action by his associates in the political activist and trial lawyer communities will increase sales of natural gas by a substantial amount. In return, they want both political and financial support.
The environmental community is going to strongly support these new rules; we ought to have strong support from your industry.
The stick in his pitch is a reminder that his associates have been at least somewhat successful in their efforts to teach others not to believe industry. I could be totally wrong, but it sure sounds like the implication is that those associates will use the same tactics against the natural gas industry if it does not agree to support the attacks against coal.
But if you look at the ads that are being run, they look the same as the coal ads. You know, they say we’re clean, we’re local. And nobody believes the coal industry. We’ve all be taught that coal is just lying to us. And so, I think many Americans are going to look at those same advertising campaigns coming from your industry and say “oh, it’s just another carbon industry that is lying to the American people.”
(Emphasis in original.)
I want to try to make my own position clear. My professional training, study and personal history has taught me that reliable energy is a fundamental building block of human prosperity. I would prefer burning dirty coal to no energy at all. However, I also believe that continuous technological improvements that recognize more measures of effectiveness than pure cost make human prosperity even more attainable. Finally, I am an unashamed, unapologetic patriot who cares deeply about the fate of America and hates seeing us act like addicts on the world stage in order to get our continuous fix of hydrocarbons from suppliers that use our addictions to influence our policies.
In my own personal ranking of useful energy sources, uranium, plutonium and thorium are at the top. There are about 1600 posts on this site that help to explain that ranking.
Domestic coal with serious efforts to reduce its ecological impacts comes next. Coal is an abundant American resource that still employs a fair number of hard working, community minded people, though mechanization has significant reduced its importance as a direct job generator. Its relatively low cost enables a lot of other jobs in energy intensive industries.
Aside: Removing impurities at the mine or converting it to a clean burning liquid using emission free nuclear heat and hydrogen from water are steps that seem more beneficial and likely to succeed than capturing carbon dioxide. End Aside.
Natural gas is a useful fuel for direct heating applications and indoor cooking and makes a great raw material for chemical processes. We should recognize that a 2000 trillion cubic feet domestic resource base does not indicate a sustainable oil alternative when annual consumption is already 23 trillion cubic feet per year.
We should also recognize that the same multinational companies that have amassed vast wealth and power by moving oil from dictatorships and oligarchies to energy consumer markets are investing huge sums of money to enable them to apply that same model to natural gas. They have developed the technology to transport it relatively economically as long as they can achieve sufficient sales volumes once the capital intensive LNG infrastructure is built.
Existing hydropower is a tremendous resource that should be well maintained and protected, but there is simply not much room for expansion in most place that use a lot of energy. Recent droughts in countries that went all in for hydro have shown that it is never a good idea to put all eggs into a single basket. (By the way, nuclear fission is not a single basket any more than chemical combustion is a single basket.)
I do not put wind, solar, and geothermal into the category of being worth much time or investment. They are too unreliable or geographically limited for my taste. Investments in those sources direct too much material and human capital into non productive assets. I find it interesting that multinational oil and gas companies spend so much of their advertising budget telling people that those are the next big energy sources. It is sadly amusing to see how many people believe that deceptive pitch.