Power Hungry

by Robert Bryce

  38 Interstate Oil & Gas Compact Commission, “Marginal Wells: Fuel for Economic Growth,” 3, 7.

  39 Ibid. The IOGCC report shows that 396,000 marginal U.S. oil wells produced 291 million barrels in 2007. Total U.S. oil output that year was 1.8 billion barrels. See Energy Information Administration, “Crude Oil Production,” http://tonto.eia.doe.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm. Regarding gas, the IOGCC report (p. 10), shows that 322,000 marginal U.S. gas wells produced 1.7 trillion cubic feet of gas in 2007. Total U.S. gas output that year reached 19 trillion cubic feet. See Energy Information Administration, “Natural Gas Gross Withdrawals and Production: U.S.,” http://tonto.eia.doe.gov/dnav/ng/ng_prod_sum_dcu_NUS_a.htm.

  40 National Stripper Well Association, “Facts,” http://nswa.us/dyn/showpage.php?id=25. Total stripper well production in 2007 amounted to 291 million barrels, which works out to just under 800,000 barrels per day.

  41 BP Statistical Review of World Energy 2009, http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2008/STAGING/local_assets/2009_downloads/renewables_section_2009.pdf.

  Chapter 23

  1 Lawrence Goodwyn, Texas Oil, American Dreams: A Study of the Texas Independent Producers and Royalty Owners Association (Austin: Texas State Historical Association, 1996), 142.

  2 Michael E. (Gene) Powell Jr., “Recent Developments in the Barnett Shale,” March 2009, http://www.barnettshalenews.com/documents/2009TAEPExpo/Recent%20Developments%20in%20the%20Barnett%20Shale.pdf, 7.

  3 International Energy Agency, World Energy Outlook 2009, 403–404.

  4 Robert Bryce, Cronies: Oil, The Bushes, and the Rise of Texas, America’s Superstate (New York: PublicAffairs, 2004), 26–34.

  5 Ibid., 133.

  6 For more on this, see Bryce, Cronies.

  7 Central Intelligence Agency, World Factbook, “Country Comparisons—Oil—Proved Reserves,” n.d., https://www.cia.gov/library/publications/the-world-factbook/rankorder/2178rank.html.

  8 Lisa Sumi, “Shale Gas: Focus on the Marcellus Shale,” Oil & Gas Accountability Project/Earthworks, May 2008, http://www.earthworksaction.org/pubs/OGAPMarcellusShaleReport-6-12-08.pdf, 2.

  9 Joshua Schneyer, “Brazil, the New Oil Superpower,” Business Week, November 19, 2007, http://www.businessweek.com/bwdaily/dnflash/content/nov2007/db20071115_045316.htm.

  10 Ibid.

  11 EnCana, “2009 Key Play Conference Call Series Haynesville & Deep Bossier,” May 27, 2009, http://www.encana.com/investors/presentationsevents/pdfs/20090527-haynesville-deep-bossier-key-play-call.pdf, 14.

  12 Richard Heinberg, The Party’s Over: Oil, War, and the Fate of Industrial Societies (Gabriola Island, British Columbia: New Society, 2003), 105.

  13 Robert A. Hefner III, The GET: Grand Energy Transition (Oklahoma City: Hefner Foundation, 2008), 37–40.

  14 Goodwyn, Texas Oil, American Dreams, 36.

  15 Hunt Oil, “Hunt Oil History Window,” n.d., http://www.huntoil.com/history.asp.

  16 Barnett Shale Energy Education Council, http://www.bseec.org/index.php/content/facts/about_barnett_shale/. Connecticut covers about 5,500 square miles (Enchanted Learning, “US States [plus Washington, D.C.]: Area and Ranking,” http://www.enchantedlearning.com/usa/states/area.shtml).

  17 Bryce, Cronies, 24–36.

  18 Barnett Shale News, “Barnett Shale: Drilling Statistics by RigData,” n.d., http://www.barnettshalenews.com/documents/RigData%20Barnett%20Shale%20Rig%20Count%20Booklet%20Barnett%20Shale%20EXPO%203-11-2009.pdf.

  19 Baker Hughes, “North American Rotary Rig Count,” http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm. According to Baker Hughes, an average of 1,880 drilling rigs were active during 2008.

  20 Powell, “Recent Developments in the Barnett Shale,” 7.

  21 East Texas Oil Museum, “A Brief History of the East Texas Oil Field,” 2000, http://www.easttexasoilmuseum.com/Pages/history.html.

  22 Energy Information Administration, “Petroleum Navigator,” http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=f000000_3&f=A.

  23 Goodwyn, Texas Oil, American Dreams, 47.

  24 In mid-2008, the Barnett was producing about 4.7 billion cubic feet of gas per day. See “Gene Powell: Barnett Guru,” Oil & Gas Investor, January 2009, http://www.barnettshalenews.com/documents/Gene%20Powell%20Barnett%20Guru%20Article%20in%20Oil%20&%20Gas%20Investor%20Magazine%20January%202009.pdf, 18. For U.S. gas production data, see Energy Information Administration, “Natural Gas Navigator,” http://tonto.eia.doe.gov/dnav/ng/hist/n9070us2m.htm. In July 2008, total production was 1.734 trillion cubic feet, or about 57.6 billion cubic feet per day.

  25 Energy Information Administration, “Natural Gas Navigator,” http://tonto.eia.doe.gov/dnav/ng/hist/rngcld.htm.

  26 Ibid.

  Chapter 24

  1 For more on mineral rights, see Robert Bryce, “The Meek Need Mineral Rights,” Energy Tribune, December 26, 2007, http://www.energytribune.com/articles.cfm?aid=737.

  2 For more on de Soto, see Dario Fernandez-Morera, “Hernando de Soto Interview,” Reason.com, November 30, 1999, http://www.reason.com/news/show/32213.html.

  3 This is my estimate. In 1992, the Environmental Protection Agency estimated that 1.2 million wells had been abandoned. See Roberto Suro, “Abandoned Oil and Gas Wells Become Pollution Portals,” New York Times, May 3, 1992, http://www.nytimes.com/1992/05/03/us/abandoned-oil-and-gas-wells-become-pollution-portals.html. Since 1992, more than 500,000 wells have been drilled in the United States. See Energy Information Administration, “Petroleum Navigator,” http://tonto.eia.doe.gov/dnav/pet/hist/e_ertw0_xwc0_nus_ca.htm.

  4 Yahoo! Finance, “Google, Inc.: Income Statement,” http://finance.yahoo.com/q/is?s=GOOG&annual.

  5 The easiest way to estimate U.S. royalty payments is to calculate the value of all the oil and gas produced in the country and then multiply it by one-eighth. (A 12.5 percent royalty rate is often used as a benchmark amount for landowners, but many mineral rights agreements call for royalties of 18.75 percent or more.) In 2007, the total value of all U.S. oil and gas production was about $243.9 billion, and domestic oil production totaled 1.848 billion barrels. (See Energy Information Administration, “Crude Oil Production,” http://tonto.eia.doe.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm.) The average wellhead price was $66.52 per barrel. (See Energy Information Administration, “Petroleum Navigator,” http://tonto.eia.doe.gov/dnav/pet/hist/f000000__3a.htm.) Therefore, the total value of U.S. oil production in 2007 was about $122.9 billion. Meanwhile, U.S. natural gas production was 19 trillion cubic feet. (See Energy Information Administration, “Natural Gas Navigator,” http://tonto.eia.doe.gov/dnav/ng/hist/n9070us2a.htm.) And the average wellhead price was $6.37 per thousand cubic feet. (See Energy Information Administration, “Natural Gas Navigator,” http://tonto.eia.doe.gov/dnav/ng/hist/n9190us3A.htm.) Thus, the value of all U.S. gas production that year was about $121 billion. At a royalty rate of 12.5 percent, that means that some $30.5 billion in mineral royalties were paid out in 2007. Of that, about $9 billion was collected by the federal government for oil and gas produced from federal onshore and offshore leases. (See U.S. Government Accountability Office, “Oil and Gas Royalties: The Federal System for Collecting Oil and Gas Revenues Needs Comprehensive Reassessment,” September 2008, http://www.gao.gov/new.items/d08691.pdf.) Subtracting the feds’take means that private mineral owners were likely paid about $21.5 billion in 2007.This estimate appears reasonable, given findings by other researchers. Energy In Depth, a group that represents independent oil and gas producers, estimates 2007 royalty payments to public and private landowners at $30 billion. See Energy In Depth, “Quick Facts: Jobs, Economic and Energy Benefits of Domestic Production,” http://www.energyindepth.org/about/quick-facts/. In addition, a 2009 report by Advanced Resources International for the Independent Petroleum Association of America put Oklahoma’s 2007 royalty payments at $1.85 billion. That sum is about 8.6 percent of my estimate of $21.5 b
illion for the whole United States. That percentage ties out nicely when you consider that in 2007, Oklahoma gas production was 1.65 trillion cubic feet, or about 8.6 percent of total U.S. gas production. See Advanced Resources International, “Bringing Real Information on Energy Forward: Economic Considerations Associated with Regulating the American Oil and Natural Gas Industry,” April 24, 2009, http://s3.amazonaws.com/propublica/assets/natural_gas/economic_consequences_report_april2009.pdf, 3. For more information on Oklahoma production, see Energy Information Administration, “Natural Gas Gross Withdrawals and Production: Oklahoma,” http://tonto.eia.doe.gov/dnav/ng/ng_prod_sum_dcu_sok_a.htm. Note that the calculation of $21.5 billion is based on 2007 data. Given the oil and gas price spikes of 2008, the royalty payments that year were likely far higher.

  6 Bryce, “The Meek Need Mineral Rights.”

  7 PegasusNews.com, “Arlington Neighborhood Gets Record Deal for Barnett Shale Rights,” March 18, 2008, http://www.pegasusnews.com/news/2008/mar/18/arlington-neighborhood-gets-record-deal-barnett-sh/.

  8 Business Images Northwest Louisiana, “Haynesville Shale Fuels Boom in Northwest Louisiana,” May 18, 2009, http://imagesnwlouisiana.com/index.php/site/articles/energy/haynesville_shale_fuels_boom_in_northwest_louisiana.

  9 Haynesville, directed by Gregory Kallenberg, produced by Mark Bullard and Gregory Kallenberg (Threepenny Productions, 2009). For more information, see the official site for the movie at http://www.haynesvillemovie.com/. Also, Gregory Kallenberg, interview with author, approximately October 15, 2009.

  10 Colorado Energy Research Institute, “Oil and Gas Economic Impact Analysis,” June 2007, http://www.energyindepth.org/PDF/CERIOil&Gas.pdf, ix.

  11 Oklahoma Energy Resources Board, “The Local Impact of Oil and Gas Production and Drilling in Oklahoma,” October 2008, http://www.energyindepth.org/PDF/Local%20Oil%20Gas%20Impact%20Draft%2020080916.pdf, 24, 33.

  12 Independent Petroleum Association of America, “The Oil & Gas Producing Industry in Your State,” 2007–2008, http://www.energyindepth.org/PDF/IPAA07_ADB.indd.pdf, 118.

  Chapter 25

  1 Energy Information Administration, “World Carbon Dioxide Emissions from the Consumption and Flaring of Fossil Fuels, 1980–2006,” posted December 8, 2008, http://www.eia.doe.gov/pub/international/iealf/tableh1co2.xls.

  2 New York State Department of Environmental Conservation, “Gas Well Drilling in the Marcellus Shale,” n.d., http://www.dec.ny.gov/energy/46288.html.

  3 David O. Williams, “DeGette, Polis Introduce FRAC Act Aimed at Closing Hydraulic Fracturing ‘Loophole,’” The Colorado Independent, June 9, 2009, http://coloradoindependent.com/30784/degette-polis-introduce-frac-act-aimed-at-closing-hydraulic-fracturing-loophole.

  4 Oil & Gas Journal, “API Opposes Efforts to Federally Regulate Hydraulic Fracturing,” June 9, 2009, http://www.laserfocusworld.com/display_article/364231/7/none/none/Gener/API-opposes-efforts-to-federally-regulate-hydraulic-fracturin.

  5 Jeremy Miller, “Of Hydraulic Fracturing and Drinking Water,” Green Inc., June 30, 2009, http://greeninc.blogs.nytimes.com/2009/06/30/of-hydraulic-fracturing-and-drinking-water/?pagemode=print.

  6 Abrahm Lustgarten, “Buried Secrets: Is Natural Gas Drilling Endangering US Water Supplies?” ProPublica, November 13, 2008, http://www.propublica.org/feature/buried-secrets-is-natural-gas-drilling-endangering-us-water-supplies-1113.

  7 Miller, “Of Hydraulic Fracturing.”

  8 Associated Press, “Wyo. Community Blames Fracking for Water Woes,” September 6, 2009, http://www.lasvegassun.com/news/2009/sep/06/wyo-community-blames-fracking-for-water-woes/.

  9 Jad Mouawad and Clifford Krauss, “Gas Company Won’t Drill in New York Watershed,” New York Times, October 27, 2009, http://www.nytimes.com/2009/10/28/business/energy-environment/28drill.html?_r=1&adxnnl=1&adxnnlx=1256732225-obw5RJbKNjJ9k+kgTB5w0Q.

  10 Energy Information Administration, Table 6.4, “Natural Gas Gross Withdrawals and Natural Gas Well Productivity, 1960–2008,” http://www.eia.doe.gov/emeu/aer/txt/ptb0604.html.

  11 Energy Information Administration, “Crude Oil and Natural Gas Exploratory and Development Wells,” http://tonto.eia.doe.gov/dnav/pet/pet_crd_wellend_sl_a.htm.

  12 Barnett Shale Newsletter, November 16, 2009, 8.

  13 Ibid., 13.

  Chapter 26

  1 James Lovelock, “Nuclear Power Is the Only Green Solution,” Independent, May 24, 2004, http://www.independent.co.uk/opinion/commentators/james-lovelock-nuclear-power-is-the-only-green-solution-564446.html.

  2 Stewart Brand, Whole Earth Discipline: An Ecopragmatist Manifesto (New York: Viking, 2009), 98.

  3 Robert Bryce, “Bryce Interviews Amory Lovins,” Energy Tribune, November 2007, http://www.robertbryce.com/node/161.

  4 International Atomic Energy Agency, “Nuclear Power Plants Information: Operational Reactors by Age,” http://www.iaea.org/cgi-bin/db.page.pl/pris.reaopag.htm.

  5 “World Nuclear Power Reactors and Uranium Requirements,” December 1, 2009, http://www.world-nuclear.org/info/reactors.html.

  6 BP Statistical Review of World Energy 2009, http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2008/STAGING/local_assets/2009_downloads/renewables_section_2009.pdf.

  7 Brand, Whole Earth Discipline, 99.

  8 International Energy Agency, World Energy Outlook 2009, 266.

  9 Ibid., 267.

  10 Ibid., 381.

  11 Brand, Whole Earth Discipline, 99. For more on Amory Lovins, see Democracy Now, “Amory Lovins: Expanding Nuclear Power Makes Climate Change Worse,” video, July 16, 2008, http://www.democracynow.org/2008/7/16/amory_lovins_expanding_nuclear_power_makes.

  12 Greenpeace International, “End the Nuclear Age,” n.d., http://www.greenpeace.org/international/campaigns/nuclear. Also see Greenpeace International, “Nuclear Power Belongs in the Past,” April 25, 2008, http://www.greenpeace.org/usa/news/nuclear-power-belongs-in-past.

  13 Sierra Club, “Nuclear Power,” n.d., http://www.sierraclub.org/policy/conservation/nuc-power.aspx.

  14 For 15 percent of electricity, see International Energy Agency, “Key World Energy Statistics, 2008,” http://www.iea.org/Textbase/nppdf/free/2008/Key_Stats_2008.pdf, 24, and World Energy Outlook 2008, 509. For 5 percent of primary energy, see BP Statistical Review of World Energy 2009.

  15 Richard Rhodes and Denis Beller, “The Need for Nuclear Power,” Foreign Affairs , February 2000, http://www.iaea.org/Publications/Magazines/Bulletin/Bull422/42204784350.pdf, 47.

  16 Nuclear Energy Institute, “US State-by-State Commercial Nuclear Used Fuel and Payments to the Nuclear Waste Fund,” current as of March 31, 2009, http://www.nei.org/filefolder/US_State_by_State_Used_Fuel_and_Payments_to_NWF_1.xls.

  17 Gwyneth Cravens, Power to Save the World: The Truth About Nuclear Energy (New York: Knopf, 2008), 269.

  18 Halimah Abdullah and Renee Schoof, “Boxer: EPA Should Regulate Coal-Fired Power Plant Waste,” McClatchy Newspapers, June 26, 2009, http://www.thesunnews.com/1014/story/956439.html.

  19 Cravens, Power to Save the World, 269. For carbon data, see Energy Information Administration, “World Carbon Dioxide Emissions from the Consumption and Flaring of Fossil Fuels, 1980–2006,” posted December 8, 2008, http://www.eia.doe.gov/pub/international/iealf/tableh1co2.xls.

  20 James Kanter, “In Finland, Nuclear Renaissance Runs Into Trouble,” New York Times, May 28, 2009, http://www.nytimes.com/2009/05/29/business/energy-environment/29nuke.html.

  21 Ibid.

  22 Jim Forsyth, “San Antonio Sees Cost for New Tex Reactors Rising,” Reuters, October 27, 2009, http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN2726904520091027.

  23 NewEnergyFocus.com, “Onshore Construction Begins for Sheringham Shoal Wind farm,” September 7, 2009, http://www.newenergyfocus.com/do/ecco.py/view_item?listid=1&listcatid=32&listitemid=2978§ion=Wind. See also Statoil, “Pioneering Wind Power at Sheringham Shoal,” http://www.statoilhydro.com/e
n/TechnologyInnovation/NewEnergy/RenewablePowerProduction/Offshore/SheringhamShoal/Pages/default.aspx.

  24 Alex Kuffner, “National Grid Objects to Proposed Cost of Wind Power,” Providence Journal, November 19, 2009, http://www.projo.com/business/content/GRID_DEEPWATER_DEAL_11-19-09_ROGGH5M_v38.3c1d2cb.html.

  25 Katherine Gregor, “Cool City: Solar Subtleties,” Austin Chronicle, March 6, 2009, http://www.austinchronicle.com/gyrobase/Issue/story?oid=oid:75 1802.

  26 Christopher Calnan, “City Council Gives Austin Energy the Go-Ahead for Major Solar Project,” Austin Business Journal, March 5, 2009, http://austin.bizjournals.com/austin/stories/2009/03/02/daily49.html.

  27 Zac Anderson, “Solar Plant Set to Open, Even as Shadows Loom,” Herald Tribune.com, October 14, 2009, http://www.heraldtribune.com/article/20091014/ARTICLE/910141033/2055/NEWS?Title=Solar-plant-set-to-open-even-as-shadows-loom.

  28 Energy Information Administration, “Federal Financial Interventions and Subsidies in Energy Markets 2007,” April 2008, http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/subsidy08.pdf, xvi.

  29 Ibid.

  30 Simon Lomax, “Nuclear Industry ‘Restart’ Means More Loan Guarantees, Chu Says,” Bloomberg, October 27, 2009, http://www.bloomberg.com/apps/news?pid=20601072&sid=aR1MVERYEgAs.

  31 This is commonly called the Price-Anderson Act. For more, see Wikipedia, “Price Anderson Nuclear Industries Indemnity Act,” http://en.wikipedia.org/wiki/Price-Anderson_Nuclear_Industries_Indemnity_Act.

  32 David Bradish, “Amory Lovins vs. Stewart Brand—Part Four,” NEI Nuclear Notes, November 16, 2009, http://neinuclearnotes.blogspot.com/2009/11/amory-lovins-vs-stewart-brand-part-four.html#links.

  33 Note that the total in this report includes petroleum liquids. The EIA’s official statistics on electricity generation show that in 2007, natural gas total generation was 896.5 billion kilowatt-hours. See Energy Information Administration, “Net Generation by Energy Source by Type of Producer,” http://www.eia.doe.gov/cneaf/electricity/epa/epat1p1.html.