Natural Gas, Source of Domestic Energy for Transportation?

Interesting article I read in my local news source here in Tulsa ... (external - login to view)

By Charles Biggs Of the Beacon Staff

DENVER - As Americans struggle with gas prices sometimes over $3 a gallon, the nation must focus on new sources of domestic energy for transportation, said Dr. Charles Mankin of The University of Oklahoma.

Mankin, director of Sarkey’s Energy Center at OU, made that assessment at the 13th Annual Energy Policy Conference, sponsored The Energy Advocates.

He sees hope in the development of natural gas.

“We have barely scratched the surface in terms of natural gas supply,” Mankin said. “We have a bright future.”

America imports almost two-thirds of the oil it uses for gasoline and diesel fuel. The United States imports about 80 percent of the oil needed for diesel fuel. Natural gas can be used for petrochemical production, power generation and for transportation fuel, Mankin said.

Unlike oil, America has large reserves of natural gas on the East and West coasts, the Rocky Mountains, the Gulf Coast and Alaska. Methane can be produced from coal, shale formations and low-permeability sands.

In other words, America has a limited amount of oil but a lot of gas.

Americans use an average of 28 barrels of oil per person per year.

The Chinese average one-half barrel a year.

“Imagine if we had to live on one barrel a year per person,” Mankin said.

Dramatic increases in demand from China and India (with more than a billion people) and a disappointing oil industry in Russia have caused oil prices to soar.

“The reserves of natural gas in the United States are understated,” Mankin said. “We have to explore North America.”

Mankin said the world has estimated natural gas reserves of 5,304 trillion cubic feet, but half of it has no market value because of the distance from consumers. Liquefied natural gas can be shipped but it must be returned to a gas at its destination. Most of the world lacks pipelines needed to efficiently transport natural gas (as a gas).

During World War II, Germany produced a liquid fuel from coal as gas supplies ran low. Mankin said America has an estimated 400-year supply of coal that could be tapped for transportation energy.

Diesel fuel is made from “heavy crude,” with Venezuela being a major supplier to the United States. Most trucks and railroads run on diesel fuel. An unfriendly government in Venezuela could eventually sell more of its heavy crude to China.

“If the trucks and railroads don’t run, we don’t eat,” Mankin said.

America’s natural gas resources are so underdeveloped that it imports natural gas from Canada.

“Natural gas can meet our needs for another century,” Mankin said. “It can contribute to our transportation needs. Natural gas will lead us toward hydrogen technology.

“I think we have a bright future. Natural gas will play a role.”

Energy executive Edward W. Blessing, founder and managing director of Dallas-based Blessing Petroleum Group, LLC, said, “We have to prepare for the likelihood that we will run out of oil.”

The United States is being held hostage by its own addiction to oil.

“The United States has gotten into this position because of its reliance and complacency concerning cheap and available oil,” said Blessing. “We’ve been trapped and the only way to survive centers around technology and innovation.”

In his speech, The World According to Oil, Blessing said the competitive advantage the United States has over every nation is innovation, ideas and the ability to make things happen. That innovation is what will save the industry. In Qatar for example, one U.S. energy company is investing billions of dollars to turn natural gas into a type of diesel fuel.

“Since OPEC and other non-OPEC members are secretive as to how they derive their estimated oil reserves, the industry does not know what proven, probable and possible reserves exist in the world today,” said Blessing. “We can’t know because there is no transparency and given the realities of world oil politics, that is not going to change.”

To that end, Blessing says consuming countries have to look elsewhere for their energy needs.

Experts say that just as the 19th century was shaped by coal and the 20th century by oil, this century will belong to natural gas, the only viable source for massive change in energy supply.

Blessing has been involved in the petroleum industry for more than 25 years, primarily serving as a venture capitalist that funds worldwide companies searching for natural resources.

Liz Fagen of the Oklahoma Marginal Well Commission told the conference not to discount the impact of small oil wells that produce less than 10 barrels a day.

“Taken as a whole, they do make a contribution,” Fagen said. “A lot of people see our marginal wells as our strategic reserve. This is not a dead industry.”

Most of the speakers agreed that the oil and gas industry needs a better public image.

Keynote speaker Stephen Leeb, who wrote The Oil Factor in 2003, said energy is the key to solving the problems of the environment, population growth and nuclear proliferation.

“With energy, we can solve all those other problems,” Leeb said. “If we can solve the energy problem, we can solve anything. I am not a pessimist.”

America historically has solved big problems when Americans understood the situation, he said.

Oil consumption has grown dramatically worldwide while production and supply hasn’t kept pace, he said. It’s unrealistic to think that increased oil production in the United States and Russia will meet this challenge.

Development of alternative energies (solar, wind, etc.) is crucial but is an understanding the era of cheap oil is over.

“We are going to have to spend a ton of money to get out of this problem,” Leeb said. “The consequences are really serious. There are technologies that could make a big difference. I am optimistic about America if it will see the problem. I think we can do it.

“After all, we spent a trillion dollars and we won World War II.”

Energy Advocate President Mark Stansberry and Chairman Mac Alloway presented the Energy Advocate of the Year to Larry Nichols of Devon Energy Corporation. June Brooks, Jack Graves and Lee Keeling were given lifetime achievement awards.

Charles Biggs, publisher of the Tulsa Beacon, accepted the award for “outstanding journalism/best coverage” and Cindy Licklider was given the award for “outstanding journalism/radio” on behalf of KFAQ/Journal Broadcasting.

Other awards will be given during the November membership luncheon in Tulsa.

The theme for this year’s Energy Policy Conference was “America’s Energy Future in a Global Economy.” The conference covered issues including security, conservation, energy efficiency, development of alternative resources, service and exploration incentives.
The USA is pressing it's colonial efforts towards the Canadian Arctic in order to scalp away the Canadian natural gas resource in that area. There are going to be sharp contests in the near future because the climate change is allowing year round passage into the Canadian Arctic. The US colonial efforts knows no bounds!

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