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US Energy Transportation Network Gets Multibillion-Dollar Revamp

samzenpus posted about 2 years ago | from the fixing-the-pipes dept.

Power 124

Hugh Pickens writes writes "Simone Sebastian writes in the Houston Chronicle that the nation's energy transportation network is undergoing a multibillion-dollar overhaul, as oil and natural gas production surges in new regions of the country and energy producers charge into new areas with technology that can reach oil and natural gas trapped in shale and other tight rock formations leaving pools of crude and gas stranded far from the Gulf Coast refineries and petrochemical plants that need them. 'Where it used to be isn't where it is now. Where it needs to go isn't where it used to go,' says Terrance McGill, president of fuel carrier Enbridge Energy. 'You're seeing this fundamental shift of crude oil across the country.' For example Phillips 66 CEO Greg Garland says his company is considering buying 2,000 more rail cars that could carry an additional 150,000 barrels a day from shale regions (PDF) to its refineries across the country because the glut of crude oil pouring out of the newly tapped shale oil plays like North Dakota's Bakken has kept the price of Mid-Continent crude at a record-wide discount of up to $27 per barrel relative to its rival European benchmark Brent crude because there is not enough pipeline capacity to get Bakken crude to Gulf coast refineries. 'That's a pipeline on wheels,' says Garland. 'You'll see us stepping out and doing some more things around infrastructure. Like everyone else, we're doing everything we can to get more barrels in front of those facilities.'"

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124 comments

Great. Where are my cheap solar panels? (4, Informative)

crazyjj (2598719) | about 2 years ago | (#40520591)

How come all the oil and gas companies keep expanding like this and all the solar companies keep going bankrupt? Wasn't it supposed to be the other way around? Damned hippies lied to me again.

Re:Great. Where are my cheap solar panels? (5, Interesting)

jdastrup (1075795) | about 2 years ago | (#40520883)

Hopefully these new 2000 rail cars can be modified to transport solar and wind energy to bring these Energies of the Future to locations where they are currently unavailable. Even better if the locomotives are corn powered. Or, just grow the corn on the trains using the solar energy they are transporting and we'll have perpetual energy trains.

Re:Great. Where are my cheap solar panels? (1)

baker_tony (621742) | about 2 years ago | (#40522899)

Just put a turbine on top of the train so it can power itself when it moves forward. Dah.

Re:Great. Where are my cheap solar panels? (1)

CaptainLard (1902452) | about 2 years ago | (#40523567)

Really mods?? +5 Interesting? Is this your protest of not having a +1 hyperbole? Or +1 greenpeace gone wild? Or is this a ploy to wear out my '?' key?

Re:Great. Where are my cheap solar panels? (3, Interesting)

Anonymous Coward | about 2 years ago | (#40520905)

China took our solar tech, mass produced panels at a loss to flood the market, and drove the innovators out of business. Now we're stuck with 5-year old tech because China is the only game in town, and they're not innovating. If China competed fairly, the innovators would have found ways to get panel production costs below what they currently are. The price of panels would be even lower than the Chinese price, which is losing them money.

Hopefully, the new tariffs on Chinese solar panels will help correct this, and bring innovators to market.

Re:Great. Where are my cheap solar panels? (2)

DrgnDancer (137700) | about 2 years ago | (#40521089)

It also doesn't help that while the government subsidizes solar power companies to an extent; it's a paltry level of support compared to the oil company subsidies. It's unlikely that solar by itself will be able to replace carbon fuels anytime soon, but we it could easily provide a much greater percentage of power than it does if it got a little support.

Re:Great. Where are my cheap solar panels? (1)

Mr. Firewall (578517) | about 2 years ago | (#40521163)

It also doesn't help that while the government subsidizes solar power companies to an extent; it's a paltry level of support compared to the oil company subsidies.

Oh, really? What "subsidies" are the oil companies getting?

Name two of them. Please.

Re:Great. Where are my cheap solar panels? (2)

bigtrike (904535) | about 2 years ago | (#40521345)

Oil field privatization in IRAQ due to war spending, CIA coups to overthrow leaders that interfere with US owned oil interests. Oh, also the tax breaks for exploration: http://www.us.kpmg.com/microsite/taxnewsflash/2012/Jun/061812%20GG%20and%20IDC%20Part%20II.pdf [kpmg.com]

Re:Great. Where are my cheap solar panels? (1)

sycodon (149926) | about 2 years ago | (#40521463)

In case you missed it, U.S. Oil companies lost out badly when it came to getting drilling rights in Iraq.

And then we have the standard, "we're not taking as much money from you as we could, so it is a subsidy" line of thought.

Re:Great. Where are my cheap solar panels? (1)

bigtrike (904535) | about 2 years ago | (#40521635)

I could have sworn that us companies got more than $0 in drilling rights in Iraq, but you are suggesting otherwise. Would you prefer that the solar power companies and everyone else get the same tax reduction as well?

Re:Great. Where are my cheap solar panels? (1)

sycodon (149926) | about 2 years ago | (#40521685)

Ha!

You have to be making money and paying taxes before they can reduce your taxes.

Maybe I just jinxed it and some idiot will introduce earn income tax credits for companies.

Re:Great. Where are my cheap solar panels? (0)

Anonymous Coward | about 2 years ago | (#40523255)

Yeah, the whole "war for oil" thing was just another lie, similar to "weapons of mass destruction."

This was really another war for the Jews, like all of the other wars the United States has fought since the Civil War.

Re:Great. Where are my cheap solar panels? (1)

Anonymous Coward | about 2 years ago | (#40521971)

You do realize that no US oil corporations were awarded any of the top tier contracts in Iraq as the result of the war? Oh, I'm sure there will be some US sub-contractors who make some money by providing engineering and operational services.
And how does the CIA overthrow a country? Do they have some secret million man army to do it? Do they say "do what I say or we will nuke you?" During the cold war and even today the smaller nations always play one greater power off another to make sure they get the best bag of goodies. However, it is the government and civilian power brokers in these smaller countries that do all the real work and of course when the fuck it up they blame the US for all their problems to hide their incompetence to their countrymen. And why is the US blamed for the Iranian BS in 53 when it was the British who were fighting to keep their assests from being stolen, oops I mean nationalized. The British setup up a blockade to prevent oil exports and somehow the US is the one who gets blamed for that mess?

Re:Great. Where are my cheap solar panels? (0)

Anonymous Coward | about 2 years ago | (#40524085)

The Iraq war was *NOT* to take any Iraqi oil. The Iraq war was to *REMOVE* Iraq's oil production from the market. What's the difference in actual production cost between $1/G Oil & $4/G oil? The TEN TRILLION DOLLARS we've given to Mid-East countries since artificially raising the price of crude by removing the output of the #2 producer from the market. This is why the American economy is in terrible shape. Not the housing crisis. Not the banking crisis. We *LET* an extra TEN TRILLION DOLLARS leave the American economy. Until we figure out how to put it back, we're gonna have problems. And they're gonna continue to build islands & outrageous hotels...

Re:Great. Where are my cheap solar panels? (2, Informative)

Anonymous Coward | about 2 years ago | (#40521713)

MOD parent up, please. NT (1)

Apuleius (6901) | about 2 years ago | (#40522025)

TX

Re:Great. Where are my cheap solar panels? (0)

Anonymous Coward | about 2 years ago | (#40521921)

It also doesn't help that while the government subsidizes solar power companies to an extent; it's a paltry level of support compared to the oil company subsidies.

Oh, really? What "subsidies" are the oil companies getting?

Name two of them. Please.

There are so many that they are generally all lumped together. Not that you actually care, but here are two specific ones from a 2006 report:

The Expensing of Exploration and Development Costs Credit allows investors in oil or gas exploration and development to “expense” (to deduct from their corporate or individual income tax) intangible drilling costs (IDCs). IDCs include wages, the costs of using machinery for grading and drilling and the cost of unsalvageable materials in constructing wells. These costs are “intangible” in comparison to costs for salvageable expenditures (such as pipes or casings) or costs related to acquiring property for drilling. The credit enables oil and gas producers to immediately write off as an expense these costs from income taxes rather than amortize them (spread the deductions out) over the productive life of the property.

The Alternative Fuel Production Credit, implemented in 1980, applies to oil produced from shale and tar sands and natural gas produced from geopressured brine, Devonian shale, coal seams or biomass. In 2005, the Energy Production Act added some facilities that produce coke and coke gas to the production credit. In 2006, the credit was worth about $7.05 per barrel of oil-equivalent fuels. The credit has helped promote unconventional gas production and, after 2005, synthetic fuels produced from chemically altered coal.

Re:Great. Where are my cheap solar panels? (1)

Mr. Firewall (578517) | about 2 years ago | (#40522111)

None of which are subsidies.

Biofuels are heavily subsidized. Solar is heavily subsidized. Wind power is heavily subsidized.

The only subsidies the oil companies are getting are from the portion of their investments in the above (not so) "green" technologies.

I know of no actual subsidies for the oil / gas industry. And you obviously don't either.

Thanks for playing.

Re:Great. Where are my cheap solar panels? (1)

mosb1000 (710161) | about 2 years ago | (#40523385)

The Expensing of Exploration and Development Costs Credit allows investors in oil or gas exploration and development to “expense” (to deduct from their corporate or individual income tax) intangible drilling costs (IDCs). IDCs include wages, the costs of using machinery for grading and drilling and the cost of unsalvageable materials in constructing wells. These costs are “intangible” in comparison to costs for salvageable expenditures (such as pipes or casings) or costs related to acquiring property for drilling. The credit enables oil and gas producers to immediately write off as an expense these costs from income taxes rather than amortize them (spread the deductions out) over the productive life of the property.

It is not in any way surprising that the tax code lets companies write operating expenses out of their net income. It's the definition of net income. I'm not sure why any sensible person would consider this a subsidy.

The Alternative Fuel Production Credit, implemented in 1980, applies to oil produced from shale and tar sands and natural gas produced from geopressured brine, Devonian shale, coal seams or biomass. In 2005, the Energy Production Act added some facilities that produce coke and coke gas to the production credit. In 2006, the credit was worth about $7.05 per barrel of oil-equivalent fuels. The credit has helped promote unconventional gas production and, after 2005, synthetic fuels produced from chemically altered coal.

I am shocked, shocked, something called the Alternative Fuel Production Credit would apply to any unconventional means of producing fuel! This is scandalous.

Re:Great. Where are my cheap solar panels? (0)

Anonymous Coward | about 2 years ago | (#40522147)

This is funny. Mr. Firewall called you all out and all you came back with is normal business tax breaks that are in every business, no subsidies.

A subsidy would be the $50 Billion Obama gave to solar comapnies, who never produced anything to give a tax break on, which mostly went bankrupt almost immediatly after getting the government backed loan. Solyndra getting $500 Million is an example, which was a subsidy not a tax break.

The communication problem is people who produce consider their profits to be their money so a tax break is them keeping more of their own money. The left assumes all money is theirs and a tax break is the same as a subsidy, it is not. There is no taxpayer money going to oil companies, as a matter of fact oil is one of the most heavily taxed item produced in the US, the exact opposite of what you claim.

Re:Great. Where are my cheap solar panels? (0)

Anonymous Coward | about 2 years ago | (#40523453)

Depletion allowances let oil companies treat the oil in the ground as capital equipment, and they can write off a certain percentage for each barrel that comes out.

On Tuesday the speaker appeared to backtrack from those comments, with an aid telling CNN that "what the President has suggested so far would simply raise taxes and increase the price at the pump."

Nonetheless, Obama took the chance to pounce, saying in his letter that he was "heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies."

This all comes as the price of gasoline surges above $4 a gallon in many states, making it increasingly difficult politically to defend Big Oil.

As gas prices approach their record highs set in 2008 they are threatening to derail the nation's nascent economic recovery.
The tax breaks in question

The Obama administration is targeting nine tax breaks, according to a paper from the left-leaning Center for American Progress. Four account for the lion's share of the money:

Domestic manufacturing tax deduction: This is the largest single tax break, and would save over $1.7 billion a year if eliminated.

The tax deduction, passed in 2004, is designed to keep factories in the United States. Companies that manufacture here can deduct 9% of their income from operations that are attributed to domestic production.

But some question if that incentive is really appropriate for oil companies. "What are they going to do, move the oil field to the North Sea," said one staffer at the Center for American Progress said in an interview earlier this year.

No, but higher costs in the United States may make them move the drill rigs to the North Sea or some other place.

Eliminating the tax breaks "would actually discourage new energy projects and new hiring in one of the nation's most dependable job-creating industries," the American Petroleum Institute said in a statement at the time, noting the industry currently supports over 9 million jobs.

The percentage depletion allowance: This lets oil companies deduct about 15% of the money generated from a well from its taxes. Eliminating it would save about $1 billion a year.

The deduction essentially lets oil companies treat oil in the ground as capital equipment. For any industry, the value of that equipment can be written down each year.

But critics say oil in the ground is not capital equipment, but a national resource that the oil companies are simply using for their own profit.

The foreign tax credit: This provision gives companies a credit for any taxes they pay to other countries. Altering this tax credit would save about $850 million a year.

Foreign governments can collect money from oil companies through royalties -- fees for depleting their national resources -- and income taxes.

A royalty would be deducted as a cost of doing business, and would likely shave about 30% off a company's tax bill. Categorized as income tax, it is 100% deductible.

Foreign governments long ago grew wise to the U.S. tax code. To reduce costs for everyone involved and attract business, they agreed to call some royalties income taxes, allowing oil companies to take the 100% deduction on a bigger slice of their bill.

Intangible drilling costs: This lets the industry write off about $780 million a year for things like wages, fuel, repairs and hauling costs.

All industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.

Re:Great. Where are my cheap solar panels? (1)

Mr. Firewall (578517) | about 2 years ago | (#40523617)

Again, none of the above is a subsidy. Handing half a billion dollars to a company to make solar panels, or ethanol, or windmills, or anything else that cannot possibly pay for itself, is a subsidy. Taking less of someone's money at the point of a gun (i.e., taxation) is not a subsidy.

Re:Great. Where are my cheap solar panels? (1)

cpu6502 (1960974) | about 2 years ago | (#40521239)

What subsidies do the oil companies get to make oil/gasoline/diesel cheaper?

Re:Great. Where are my cheap solar panels? (1)

kenh (9056) | about 2 years ago | (#40521613)

"It also doesn't help that while the government subsidizes solar power companies to an extent; it's a paltry level of support compared to the oil company subsidies."

Seriously?

We subsidise the research into solar panels, we subsidise the production of solar panels, we subsidise the purchase of solar panels, and we subsidise the price utility companies pay for the electricity the panels produce. We also subsidise the training of the workers that install and maintain the solar panels.

What are the massive oil industry subsidies? The same "subsidies" that Nabisco, Intel an dnearly every other company in the US get - they can write-off reasearch investments, depreciate capital investments, and a few other small tax write-offs.

The oil industry could survive without the subsidies, it would just raise fuel prices and make research into cleaner/alternative energies that much more expensive - creating a disincentive when I suspect you actually want an incentive...

Re:what are the oil industry subsidies (2)

presidenteloco (659168) | about 2 years ago | (#40521815)

You forgot the lack of a carbon tax or cap and trade system for co2 emissions. That's a massive subsidy of today's oil companies by future generations who will be paying to re-do the economy as a whole in a world of greatly warmed climate, shifted arable zones, an acidified ocean, and enviro-wars.

Re:what are the oil industry subsidies (1)

Mr. Firewall (578517) | about 2 years ago | (#40522115)

The lack of a tax is not a subsidy.

Re: not a subsidy (1)

presidenteloco (659168) | about 2 years ago | (#40523713)

unless the levels of taxation are assymetrical; i.e. unless there are more categories of deductions and greater levels of deductions for one industrial sector compared to other sectors of the economy. Then it would be a subsidy. I think if you study the details there is a a subsidy by this definition for the fossil fuel industry.

Re:what are the oil industry subsidies (0)

Anonymous Coward | about 2 years ago | (#40522305)

Meh. Cap and trade is an 'artificial' market (trying to explain why that is a bad thing to wet-behind-the-ears mainstream economists, who are so giddy with various treatises and papers proclaiming the wonders of such beasts, let alone their less-knowledgeable friends, is a pleasant act of futility; Morbo: "Markets do not work that way! Good night!") and is so rife with corruption that it compares rather favorably with the accounting practices of Enron & friends. You would have to be dangerously out of touch with the happenings of that evil thing to think some good may come of it.

Not that I am a fan of subsidies for corporations, governments, etc.

Re:what are the oil industry subsidies (1)

presidenteloco (659168) | about 2 years ago | (#40523687)

You are right. Cap and trade is easy to render impotent by changing definitions of things to the point of meaninglessness. It's full of potential accounting tricks that would ensure that no real progress was made on the only number that matters in this topic: the rate of change of CO2 concentration in the atmosphere.

A hefty carbon tax is much simpler, stands a chance if implemented at being effective in reducing fossil-fuel use, and thus is predictably politically impossible.

What the hell is it about us that makes the intelligent and effective choice politically impossible. "Then we're stupid and we'll die !"

Re:Great. Where are my cheap solar panels? (1)

cpu6502 (1960974) | about 2 years ago | (#40521165)

I don't understand this belief that the U.S. could build solar panels cheaper than China. We can't build iPhones and other electronics cheaper than China.

Re:Great. Where are my cheap solar panels? (0)

HornWumpus (783565) | about 2 years ago | (#40521837)

They come at it backward.

Start by assuming the Obama admin's solar company loan guarantees were not kickbacks to his supporters then make up 'facts' to support your position.

Re:Great. Where are my cheap solar panels? (0)

Anonymous Coward | about 2 years ago | (#40522433)

"Hopefully, the new tariffs on Chinese solar panels will help correct this, and bring innovators to market."

You do not understand this particular part of economics. This is a fallacy long exploded by the classical liberal economists centuries ago. So long as we are being provided subsidized goods that this society prefers over investing in local production, insisting on tariffs is asking for what the market(IE: us) specifically did not want. If the tech is not sufficiently innovative to meet our desires, entrepreneurs and investors will fill the void when that happens. If not, and if we prefer being given this cheap stuff, then again there is no problem.

Bastiat wrote on this in wonderful satire with regards to the infinitely cheaper subsidized energy the sun provides vs the producers of light sources. Have a look:

http://bastiat.org/en/petition.html

Re:Great. Where are my cheap solar panels? (0)

Anonymous Coward | about 2 years ago | (#40520965)

Solar companies keep going bankrupt *in the US*. Solar production worldwide keeps doubling every year, but by far the most growth has been in the far east (china, taiwan, malaysia) since that is where most silicon wafer production is. This isn't a case of 'hippies' being wrong. This is a case of the US constantly investing heavily in non-renewables instead of PV (like this article shows) because they are currently still slightly cheaper. PV however has been exponentially increasing in production capacity worldwide and quickly decreasing in costs (causing the bankruptcies) so if the current trend continues, it won't be that long before it starts really cutting into worldwide energy production.

I think these two graphs from Wikipedia explain the situation pretty well:
http://upload.wikimedia.org/wikipedia/commons/5/53/SolarCellProduction-E.PNG
http://upload.wikimedia.org/wikipedia/commons/d/df/Annual_electricity_net_generation_in_the_world.svg

Re:Great. Where are my cheap solar panels? (1)

Anonymous Coward | about 2 years ago | (#40521331)

PV however has been exponentially increasing in production capacity worldwide

[citation needed]

Despite what the Internet may have led you to believe, "exponentially" does not mean "like, a whole lot, man!"

Re:Great. Where are my cheap solar panels? (1)

Anonymous Coward | about 2 years ago | (#40520995)

Your cheap Solar Panels are in China, waiting to be shipped over on request.

Anybody who is even SLIGHTLY aware of the reality of solar panel prices has seen the price per watt decline to under 2 dollars.

The only reason US companies are going bankrupt is because Chinese subsidies are impossible to compete with.

Thanks for paying attention.

Re:Great. Where are my cheap solar panels? (1)

kenh (9056) | about 2 years ago | (#40521645)

But maybe, if we borrow ever more money from China, we can figure out some way to make simple, labor-intensive products like solar panels as cheaply as China - the first steps will be to lower worker wages and forget about those silly environmental concerns... In order to beat China at their own game we need to become China.

Re:Great. Where are my cheap solar panels? (0)

Anonymous Coward | about 2 years ago | (#40521001)

There are cheap solar panels, at least compared to what solar panels were a few years ago. That's why so many solar firms are going bankrupt. The retail price of a solar module fell from roughly $4.5 per watt in 2009 to $2.5 per watt in July 2011 and its still going down. Many manufacturers are pricing below $2 per watt, according [solarbuzz.com] the market research firm SolarBuzz. The thing is its still generally more expensive than burning natural gas, so there is still a tremendous economic incentive to develop natural gas infrastructure. Oil doesn't really compete with solar, as many would have you think, because it's primarily and transportation fuel. Those two markets won't be linked until we have vast numbers of electric / plug-in hybrid cars. That will take a long time.

What you are seeing in this article is the U.S. market responding to the much higher oil/NG prices in the U.S. over the past decade or so. That's made a whole lot of development within the U.S. more economical, especially combined with new technology that's come along. The article mentions billions of dollars of investment, which it's worth noting is peanuts when you talk about energy. One big power plant (coal or solar) can hit $1 billion.

Re:Great. Where are my cheap solar panels? (1)

CanHasDIY (1672858) | about 2 years ago | (#40521147)

How come all the oil and gas companies keep expanding like this and all the solar companies keep going bankrupt?

Well, that's what those tree-huggers get for relying on government subsidies.

Oh, wait...



natch.

Re:Great. Where are my cheap solar panels? (4, Insightful)

sl4shd0rk (755837) | about 2 years ago | (#40521213)

How come all the oil and gas companies keep expanding like this and all the solar companies keep going bankrupt?

For one, Koch Bros., and others like them, pretty much own the Republican party in the USA. It comes in handy when you want to make sure emerging technology doesn't threaten your empire.

Secondly, too many people just don't care and more would rather eat up lies and witch-hunt drama because it's easier than figuring out the facts. This keeps seats in the senate full of corporate sponsored asshats who in turn pass votes to allow things like alternative energy solutions to be derailed before posing a threat to the oil empire.

Re:Great. Where are my cheap solar panels? (1)

sycodon (149926) | about 2 years ago | (#40521483)

I had a 100MPG carburetor and the Koch brothers bought it from me fro $100,000.

I tried to sell them my engine that ran on water but they said they had one already.

Re:Great. Where are my cheap solar panels? (1, Insightful)

kenh (9056) | about 2 years ago | (#40521777)

Koch Bros.?

Those are the evil task-masters that are controlling the world energy markets?

Let's compare federal government subsidies for solar and wind power to the entire revenue stream of Koch Bros... Which is greater?

How can little-old Koch Bros. control the world oil/energy market? They have near zero influence over the President/Senate...

According to Rolling Stone magazine [rollingstone.com] , the Koch Brothers have poured about $100 MIllion over the past 30 years into supporting organizations, politicians, and think tanks that they agree with - the US Gov't poured $528 Million [nytimes.com] down the drain at Solyndra in just under two years.

Put another way, over the last thirty years the Koch Brothers have (in your mind) controlled the Repubican Party and hence the controlled the country while Senator Obama spent nearly 8 times as much [opensecrets.org] on his campaign to become President in 2007-2008.

Re:Great. Where are my cheap solar panels? (3, Insightful)

rrohbeck (944847) | about 2 years ago | (#40521809)

Ah yes, because political propaganda and industrial investment are the same thing, right?

Re:Great. Where are my cheap solar panels? (1)

haruchai (17472) | about 2 years ago | (#40522323)

Politicians are cheaply-bought whores; kickstarting bricks-and-mortar businesses from research through to production is very expensive.

Fracking... (2)

Shivetya (243324) | about 2 years ago | (#40521247)

dropped the price of natural gas that even coal plants ramp down. Solar was barely approaching the old price point of power generation and then fracking hit. Combined with the nuclear scare and countries exploring alternatives the money landed on wind power because its currently a better option than solar.

Re:Fracking... (1)

ColdWetDog (752185) | about 2 years ago | (#40522583)

Fracking has been used since the 1950's. The only thing that really has increased the use of fracking is that oil prices have gone up enough to support spending several million dollars per well to complete the job.

Now that the shale gas people have done such an excellent job dropping wells, there is a relative glut and the price goes down. Enjoy it while you can - won't last terribly long. Big problem with shale (either oil or gas) is that the depletion rates are quite high - you pump out a well in years instead of decades. So to keep up the supply you have to drill, baby, drill. So don't believe people who say there are hundreds of years of shale bound natural gas and oil available.

Re:Great. Where are my cheap solar panels? (1)

kenh (9056) | about 2 years ago | (#40521551)

"How come all the oil and gas companies keep expanding like this and all the solar companies keep going bankrupt?"

Because solar panels are not cost-effective, not yet anyway, and the massive government subsidies are being poured into "production facilities" not basic research.

It reminds me of the bee in "The Bee Movie" that kept slamming into the glass [youtu.be] because he didn't understand the concept of glass "Maybe this time," "Maybe this time," "this time," this time..."

Solyndra was the quintesential example of this stupidity - in an effort to wrestle the solar panel industry from the grips of the Chinese Government, we (the US of A) invested in a company that used a more expensive process, baked on to more fragile panels that were made in a factory in the country with one of the highest labor costs in the world in a plant built on some of the most expensive land in the country (Silicon Valley). Surprisingly, one the production rate for solar cells at Solyndra was known, and the discount off the cost of manufacturing each solar panel sold for, it was a trivial exercise to calculate how long the money would last - so trivial even the government analysts were able to do it.

And to add insult to injury, the money used to finance the production facility was borrowed, most likley from the Chinese.

There is one use case where solar panels are very cost-effective - on space ships...

Re:Great. Where are my cheap solar panels? (1)

cavreader (1903280) | about 2 years ago | (#40523297)

Because the oil and gas companies already have distribution and logistic systems in place. Plus solar panels can be described as risky when used to power critical systems. Home solar power use would require homeowners to spend quite a bit of money to convert. Just like alternative fuels for automobiles would require car owners to either purchase new cars capable of using bio-filters and natural gas as a power source. I honestly beleive there will come a time when oil use will decline but it will most likely take years to create a viable delivery infrastructure.

Wow! (0)

Anonymous Coward | about 2 years ago | (#40520661)

Damn, for a moment I thought the US would bury all their electric, phone and TV cables like the rest of the civilized world.

Re:Wow! (1)

RobertLTux (260313) | about 2 years ago | (#40520799)

this is of course OIL being trucked not water or electricity. basically whether a given "wire" is buried or not is a function with many variables.

1who bribed who (over the years)
2 who owns which bit of land
3 ground makeup
4 sea level offset
5 presence of Historical Significance
6 presence of Possible Endangered Species
7 phase of the moon
8 color of the Primary Local Admins desk blotter
9 amount of money needed to do the job
10 - N (various other unnamed but Vitally Important Things)

Time to get off the oil addiction (4, Insightful)

presidenteloco (659168) | about 2 years ago | (#40520703)

You may as well be discussing the pros and cons of the new heroin shipping routes.

The fossil fuel addiction is just as destructive and involves the same level of denial of reality.

Specially for tech people. Get off the obsession with oil based technology and make us some seriously steampunk alternatives that work.

Re:Time to get off the oil addiction (2, Informative)

Anonymous Coward | about 2 years ago | (#40520813)

Fossil fuels are a lot more than just fuel.
Petroleum is the starting point for all our organic chemistry.
Whatcha gonna do about that?

Re:Time to get off the oil addiction (1)

riverat1 (1048260) | about 2 years ago | (#40522983)

Which says to me that we gotta stop wasting it by burning it up.

Re:Time to get off the oil addiction (0)

Anonymous Coward | about 2 years ago | (#40523157)

I don't waste it when I burn. It's well spent.

Re:Time to get off the oil addiction (0)

Anonymous Coward | about 2 years ago | (#40523343)

One day in the far off future our descendants will curse us for wantonly burning the key ingredient to the elixir of life... ...or some shit like that.

Re:Time to get off the oil addiction (2)

imagined.by (2589739) | about 2 years ago | (#40520843)

All we need is a reliable, compact, and cheap way to store a week's electric energy for a typical household.

Re:Time to get off the oil addiction (3, Funny)

jdastrup (1075795) | about 2 years ago | (#40520907)

We have it. It's called Uranium.

Re:Time to get off the oil addiction (1)

doubleyou (89602) | about 2 years ago | (#40523633)

We have it. It's called Thorium.

There, I fixed that for you.

Re:Time to get off the oil addiction (2)

SirGarlon (845873) | about 2 years ago | (#40521071)

We have several reliable, compact, and cheap ways to store that amount of energy. The trouble is, they're all fossil fuels.

Re:Time to get off the oil addiction (0)

Anonymous Coward | about 2 years ago | (#40521211)

Peak energy consumption right now is during the day. If we can get PV to take care of our energy needs during the day and had fossil fuels take care of the night that would cover more than half of our needs without storing anything. Then if you raise costs at night vs the day, basic market economics will force even more usage during the day. So eventually it might only be around 20% of usage that needs to be covered by other things (like energy storage, fossil fuels, or nuclear power).

You would also be surprised at how many things that can be done currently that shift most power usage to during the day. Like running your water heater super hot during the day, then letting it not run at night. Heating your house a little more during the day, and letting it cool off a little more at night. A/C can run the lines cold during the day, and keep the building a little colder during the day, then turn off the compressors at night (not to mention it is way less required at night). Factories could run high-power machinery more during the day.

Re:Time to get off the oil addiction (1)

Mr. Firewall (578517) | about 2 years ago | (#40522153)

Then if you raise costs at night vs the day, basic market economics will force even more usage during the day.

If you arbitrarily raise costs at night vs. the day (or in any other way, for that matter), you're not dealing with basic market economics. You're interfering with basic market economics.

Re:Time to get off the oil addiction (1)

Anonymous Coward | about 2 years ago | (#40521045)

An overhaul to the US energy transportation network.

Not the energy production methods, no, just the way we transport it around.

Yeeeeeeah. I'm wondering what codename this initiative has. "Operation Ignore Those Damn Godless Commie Hippies At All Costs"? "Operation Fingers In Our Ears And Singing Loudly"? "Operation Deck Chairs On The Titanic"?

Re:Time to get off the oil addiction (0)

Anonymous Coward | about 2 years ago | (#40521611)

Operation We're Gonna Burn Every Last Joule Of Fossil Hydrocarbon Before We Even Think About Any Other Energy Source

Re:Time to get off the oil addiction (0)

Anonymous Coward | about 2 years ago | (#40521659)

I wish I was standing next to you.

I'd smack you upside the head for being so stupid.

Re:Time to get off the oil addiction (1)

steelfood (895457) | about 2 years ago | (#40521695)

Steampunk? And from where will that steam get its energy?

Tap the energy from EMO's (0)

Anonymous Coward | about 2 years ago | (#40521761)

Tap the energy from EMO's whining about how bad their life is.

Re:Time to get off the oil addiction (0)

Anonymous Coward | about 2 years ago | (#40521813)

The energy source doesn't matter, it is the over-consumption of energy -*any* energy - that creates the problems. Do you honestly think that extracting all our current energy needs from nature won't have an equally devastating effect on it? The thing about petroleum energy, is that it is an excellent portable source of power, and if you want to employ a military assertively, it is the only power source that cuts the mustard. At the moment, fossil fuels are the only real source of portable power, and until some speculative "future-tech" power source comes along, our only viable option is to figure out how to consume petroleum wisely. Especially those of us already over-consuming it.

Re:Time to get off the oil addiction (1)

presidenteloco (659168) | about 2 years ago | (#40522269)

Well you raise a good question.

Is there an inherent limit to the amount of (low-entropy) energy (disequilibria) that should be directed by humans to human ends.

You would seem to have history on your side if you were to say that we have used the plentiful fossil-fuel energy of the last century or so very unwisely, but does that inherently mean that we can not ever be responsible "fire users"?

The problem comes with the definition of over-consumption. What is that definition? True, it is easy to show that we are being terribly wasteful and inefficient with our current cheap (borrow from the future generations) fossil fuel energy. But what if we were not wasteful and inefficient with energy? What if we did develop technologies to harness vast amounts of the plentiful energy hitting and contained in the Earth which had no serious direct negative side-effects like GHGs and air pollution?

Is your contention that we would just use the energy to more rapidly deplete the rest of the natural eco-systems of the planet? History again would be on your side of that argument. But couldn't we, in principle, learn how to shape our law and bend our will to responsible use of a vast energy throughput? Is that thought well beyond the social ingenuity and short-term hoarding predilections of human beings as we are?

Re:Time to get off the oil addiction (0)

Anonymous Coward | about 2 years ago | (#40524167)

I would say that, yes, there is a limit as to how hard we can push nature, with (for instance) fossil fuels. You could even argue that, with a little over-consumption of petroleum, we would stimulate nature to react more forcefully, and we could then extract and use that excess energy, without completely disrupting its cycle. How we could possibly measure the "correct" amount of input is, I agree, beyond our ability, yet.

Making a conscious societal effort to reshape our energy consumption is probably the only way to address this with technology that we have in hand, right now. It is easy to speculate that we might develop some better form of energy production that has no impact on nature, but until we actually hold this technology, such speculation must be limited to the realm of argument left for "some day". Concrete direction requires concrete technology.

The obstacle we are left with, right now, is how to power a modern military with current technology. To do this, the infrastructure must be in place, which means common consumption must be based around the ability to supply a military with portable energy. IMO, if we are to reduce our oil consumption without oversight, we will need a generating & storage capacity equivalent to petroleum's capacity, both in power and size. Figure out how to power a military without oil, and we'll figure out how to reduce the excess consumption of oil.

Re:Time to get off the oil addiction (1)

couchslug (175151) | about 2 years ago | (#40522531)

Heroin addiction is far less a problem than the legal consequences creating a vastly profitable black market, Government REACTION to heroin creates far worse problems then would a supply of cheap, clean smack .

In contrast, fossil fuel addiction doesn't have a "safer mode".

Isn't this exactly what we're all afraid of??? (1)

sribe (304414) | about 2 years ago | (#40520745)

... leaving pools of crude and gas stranded...

Re:Isn't this exactly what we're all afraid of??? (1)

jdastrup (1075795) | about 2 years ago | (#40520945)

No, the opposite. That's what we are interested in. Hence, the purpose of TFA.

Best part of TFA (1)

Mr. Firewall (578517) | about 2 years ago | (#40520851)

The very best part of the Houston Chronicle article comes after the end, in the "We Recommend" section:

"Tokyo man cooked own genitals, served to diners"

I'd click on it, but I'm at work.

Re:Best part of TFA (1)

ColdWetDog (752185) | about 2 years ago | (#40522603)

I'd click on it, but I'm at work.

What's the issue? Do you eat in the company cafeteria?

Pipeline on wheels? (1)

LehiNephi (695428) | about 2 years ago | (#40520855)

This smacks me as being a bit odd and inefficient. Given the volume being produced, wouldn't a pipeline make more sense? It'd be safer and cheaper in the long run. Of course, given the troubles the Keystone XL pipeline is having, maybe it's more economic to truck it than to try and get through all the red tape for a pipeline.

Re:Pipeline on wheels? (2)

Amtrak (2430376) | about 2 years ago | (#40520901)

I agree a pipeline would be more efficient in the long run if the supply keeps flowing. However, given how much the environmental moment hates, pipelines, fracking, and Oil in general they have created a dis-economy where Business people have to make the rational decision to use an inefficient solution because the red tape is less cumbersome. Now, if we had regulators that were not ideological against the industry they were trying to regulate or a product or regulatory capture by a few large players maybe we could get rid of the unnecessary red tape. Of course if pigs could fly I would probably have a flying car as well...

Re:Pipeline on wheels? (1)

jdastrup (1075795) | about 2 years ago | (#40520981)

You answered your own question. The word "Pipeline" is as bad a the word "Nuclear" to the earth-worshipers.

Re:Pipeline on wheels? (1)

drinkypoo (153816) | about 2 years ago | (#40521187)

You know, we have the technology to build pipelines that won't leak. We use them in chip fabs, where they use materials that can slaughter everyone for miles downwind. It would increase the cost by more than a factor of two, but the environmental cost of leaks is nothing to sneer at.

Re:Pipeline on wheels? (1)

compro01 (777531) | about 2 years ago | (#40522011)

but the environmental cost of leaks is nothing to sneer at.

It is when you won't be paying for it.

Re:Pipeline on wheels? (1)

drinkypoo (153816) | about 2 years ago | (#40522409)

It is when you won't be paying for it.

We all pay for it.

Re:Pipeline on wheels? (0)

Anonymous Coward | about 2 years ago | (#40521313)

It is inefficient. A pipeline is about 10 times more efficient than shipping by rail. Where a pipeline from the oilsands to the Gulf Coast refineries would cost about $2 per barrel, shipping by rail costs $20. But $20 is less than $27, so it makes sense to ship by rail until politicians allow the necessary pipelines to be built.

Trucks aren't as efficient as rail though, so you won't see bulk shipments by truck. However, in some case where the amount of product produced at a well site doesn't justify putting in a pipeline, trucks are used to haul the product to a transfer point on a pipeline.

Re:Pipeline on wheels? (1)

rrohbeck (944847) | about 2 years ago | (#40521853)

The current state of affairs has managed to keep gas prices down in the US because the crude price is depressed.
With the pipeline, gas prices will go up because the price of WTI will rise to the same level as Brent.
So I say don't build the pipeline. All it'll do is increase the profits of the oil producers, at the cost of the consumers.

Oh (2)

Alworx (885008) | about 2 years ago | (#40520917)

Oh... I thought this was about burying power cables... so that you stop getting blackouts every time a whiff of wind topples some tree along the street!

Finally (1, Troll)

Sparticus789 (2625955) | about 2 years ago | (#40521037)

Hippies: Don't build a pipeline, it will destroy the environment
Oil Companies: Fine, we'll put it on a train, create more CO2, and refine it anyways.
People: Look, gas is down to $2.75 a gallon!

Re:Finally (1)

CanHasDIY (1672858) | about 2 years ago | (#40521235)

Taxpayers: Sure, you can have your pipeline... if you want to pay for it yourself.
Oil Companies: Fuck that, without your money paying for it, that shit's too expensive! We'll just buy more trucks to run on existing infrastructure. People: Look, gas is down to $2.75 a gallon!

FTFY.

Re:Finally (1)

CanHasDIY (1672858) | about 2 years ago | (#40521293)

Oops, forgot a page break.

Re:Finally (1)

CrimsonAvenger (580665) | about 2 years ago | (#40523027)

Taxpayers: Sure, you can have your pipeline... if you want to pay for it yourself. Oil Companies: Fuck that, without your money paying for it, that shit's too expensive! We'll just buy more trucks to run on existing infrastructure. People: Look, gas is down to $2.75 a gallon!

FTFY.

Oddly, I can find no real evidence that the oil companies want anything from the taxpayers other than to get the permits approved allow them to build the pipeline.

Note, by the by, that 2000 rail cars, plus the fees associated with moving things by rail (even when you supply the cars), isn't chicken feed....

Instead of a "Virtual Pipeline"... (0)

kenh (9056) | about 2 years ago | (#40521267)

Why not build an actual pipeline [torontosun.com] from the middle of the country to the Gulf region, where the refineries are?

Run on! (1)

Dan East (318230) | about 2 years ago | (#40521311)

I don't know how far the transportation network extends, but the first sentence of the summary goes on, and on, and on...

Re:Run on! (0)

Anonymous Coward | about 2 years ago | (#40521791)

For example Phillips 66 CEO Greg Garland says his company is considering buying 2,000 more rail cars that could carry an additional 150,000 barrels a day from shale regions (PDF) to its refineries across the country because the glut of crude oil pouring out of the newly tapped shale oil plays like North Dakota's Bakken has kept the price of Mid-Continent crude at a record-wide discount of up to $27 per barrel relative to its rival European benchmark Brent crude because there is not enough pipeline capacity to get Bakken crude to Gulf coast refineries.

That one's worse. Protip: if you have two "because"s in a sentence, you need another sentence.

Nothing to see here (0)

Anonymous Coward | about 2 years ago | (#40521491)

Just another Pickens article that has nothing to do with anything. He just wants hits on his site... and it's what we give him.

Why do we want to ship crude x-country? (4, Interesting)

trims (10010) | about 2 years ago | (#40521715)

I'd be interested in seeing a good analysis of exactly WHY something like the Keystone XL pipeline (or the OP's huge number of railcars) is necessary for shipping crude to the Gulf Coast.

I realize that 80% of the US's refineries are on the Gulf, but, given a couple of things:

  • The tar sands are *relatively* clumped together in Alberta
  • After a re-alignment of oil sources, the vast majority of tar sands oil will be used domestically (Canada and USA)
  • building a refinery is expensive, but we need the extra capacity anyway
  • refining close to the tar sands extraction site reduces the total requirements for transport of the final products (i.e. the oil source to refinery to recipient); that is, not only do you reduce the total volume of end product being produced (as refining 1 gallon of crude produces under 1 gallon of end-products), but you can ship end products essentially directly from the tar sands to end-users. Given that the distance from the Gulf to the end-users is no shorter than from Alberta to the end-users, this saves a whole lot of transportation costs for the crude oil.
  • what's the cost differential between building the Keystone XL vs a large refinery (or a couple) up in Alberta?

Something similar goes for the various Shale gas extractions - I would think that it would be far better to build power generation (since that's where 90% of the gas is going to go) right near the gas fields, and then spend money on an upgraded Power Grid, rather than try to ship the gas around to existing power stations.

Basically, I think we're falling into the trap where we just assume that transportation is less expensive than co-location of end use. I'd far rather pay for another refinery and gas power stations (added capacity) AND a better power grid, than cough up the same amount for just another couple of pipelines (which, frankly, all they add is environmental disaster potential).

-Erik

Re:Why do we want to ship crude x-country? (3, Interesting)

haruchai (17472) | about 2 years ago | (#40522405)

Even with the pipeline, refining close to the point of extraction really makes sense for tar sands.
The stuff is heavy and nasty and the "dilbit" or diluted bitumen that has to be made out of it so it can flow is much, much worse than normal crude.
It's more corrosive to the pipe and more noxious and toxic when spilled.

Re:Why do we want to ship crude x-country? (1)

ColdWetDog (752185) | about 2 years ago | (#40522615)

Just depends on which is easier to transport - oil or electricity. One would think that pushing electrons would be more efficient and cost effective than hauling hydrogen-carbon chains across the continent, but that isn't necessarily true.

Re:Why do we want to ship crude x-country? (2)

ColdWetDog (752185) | about 2 years ago | (#40522635)

Stupid submit button...

The other part of the equation is that it's hella expensive to build a refinery from scratch. AFAIK, there have not been any completely new refineries built in the 'developed' world for decades - there is simply too much opposition for it. The only new refineries are in China, Indonesia, Saudi Arabia and Venezuela and similar places where you can push through large developments easier.

Why is this a slashdot article? (2)

m.dillon (147925) | about 2 years ago | (#40522287)

It just seems odd. This is more a business article than anything else, and there is nothing new and cool about buying rail cars.

Our domestic pipeline infrastructure has been on a building spree for a decade. If any of you are investors, that's been the basis for the Oil&Gas MLP buildout that has been maturing at a very fast clip since the mid-2000's, continued right through the crash, and continues to mature at a modestly fast clip today and probably for another 10 years at least before the core-buildout slows down.

Generally speaking transport for OIL and NGLs (Natural Gas Liquids) can start out in tankers and rail cars but ultimately cost efficiency requires a pipeline to be built. And you have no choice for natural gas... its pipeline or nothing pretty much since compression to CNG or LNG levels is way too expensive (and way too dangerous) for domestic transport.

But it takes several years to build a long pipeline, costs billions of dollars, and requires both shippers and receivers to enter into long term 10-year+ contracts with guaranteed volume flow or investors wouldn't finance the pipeline in the first place. Because no actual revenue flows until the pipeline is complete.

There are a dozen major producing areas but in layman's terms the bottleneck is mainly in the North->South direction these days. EastWest has capacity now (though numerous major cities on the east coast still have bottlenecks). Existing pipelines in the north-south direction are essentially maxed out.

The Keystone pipeline saga is your typical talking-head/exaggerated/public-unaware crap. Pipelines criss-cross the U.S. already, there are already numerous (but maxed out) pipelines coming down from Canada all the way to the gulk, and Canada is a major trading partner whos major oil and gas reserves are essentially land-locked. Sure, they have some transport to the coasts for export, but they need to be able to drop down through the border into the U.S. markets and we also have an export market of our own going northward of light NGLs which the Canadians use for a multitude of purposes in their oil-sands operations. It's as much a diplomatic issue with our northern neighbor as it is anything else.

-Matt

Re:Why is this a slashdot article? (1)

ColdWetDog (752185) | about 2 years ago | (#40522641)

The Gulk of Mexico.

I kinda like that.

Re:Why is this a slashdot article? (0)

Anonymous Coward | about 2 years ago | (#40523189)

Compressed cng is too dangerous to transport? Thats news to me www.lincolncomposites.com go to the Titan page, dot approved

Let's build a life we need not export resources (0)

Anonymous Coward | about 2 years ago | (#40522867)

Why are we in such a hurry to sell it overseas? Short ourselves to gain a couple bucks a gallon profit.
Watch the way it's dropping the price or oil. Not a coincidence.
  Some CEO at Chesapeake Energy gets caught hedging against his own company.
It's easy when there is no disclosure when bidding up commodities with a minimum down$.
  That incident was last month and energy value has been dropping ever since.
They will try to blame it on the "election" too. Like after the 2007- 2008 (crash) was $1.86 a gallon
Let's get this straight; The Keystone pipeline is for exporting our oil hence the coast "refineries."
Why don't they just admit it? Instead of playing politics. We can not drill our way out of this
Electric trains and everybody starts walking more. Suddenly diabetes rate drops...miraculously.

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