I wrote this in another thread, but I'll put it here.
I remember having discussions in the '80s and '90s that it would take gasoline, let alone diesel, hitting $4-5/gallon to start investments into Shale, and the it would have to remain above $2/gallon to remain profitable and sustainable, to continue. But the resulting Natural Gas glut, which we don't get from foreign petroleum imports, would reduce CO2 10%+, along with nitrate and sulfide emissions, and make coal expensive.
The wars and hurricanes of the early-to-mid '00s finally kickstarted started in the early '00s ... and became commodity by 2007. Then the lobbying happened, and then pure hypocrisy when we purposely decided to try to bankrupt domestic energy, despite imports still getting
'free passes.' It basically breaks down as follows ...
- Early '00s - Foreign wars
- Speculation drives prices
- OPEC does not increase production, despite appeals
- Western countries invest in Russia (OPEC+)
- Mid '00s - Repeat, active hurricanes
- Impact refining, driving shortages
- Compounding speculation drives prices to $4+/gallon
- Small, regional/local banks begin first investments into Shale in Canada, US
- Growth is focus of new, domestic (Canadian, US) Shale
- 2006-2007 - Critical Inflection Point
- New Natural Gas glut -- by product of Shale extraction
- Martin-Harper (CA), W. (US) and NATO governments agree to make the resulting, excess Natural Gas from Shale available to via a planned set of Compressed Natural Gas (CNG) terminals for NATO
- Canadian and US DoT re-publish studies that piplines are 50x safter, per volume, per mile, than rail, which is often along water
- Canada begins massive, domestic pipeline building program, cross-country
- Canada also begins Keystone Export (XL) Pipeline with US, leveraging existing Keystone and other US pipelines, for export to NATO
- Late '00 - US CO2 output drops for first time in decades
- Only part of it is due to the economic downturn
- Coal, Petroleum and other usage in Power Plants (most newer are tri-fuel)
- Gas prices remain $2+/gallon, OPEC does not see Shale as a threat
- Prices keep investments into Shale profitable, with new investments
- US increases use of rail, including through Canada, instead of new pipelines
- Early '10s - Increasing EU Demand + Obama anti-Domestic Environmentalism
- US becomes net exporter of petroleum
- Natural gas glut increases -- coal now 4x as expensive
- Fukushima causes Germany retire nuclear power, increasing coal imports
- US becomes massive next exporter of coal, especially to Europe
- Obama 1st administration sees 8% CO2 reduction due to Natural Gas alone
- Ironically, Obama begins war on Shale
- Keystone XL pipeline is under review, despite protests by Canada, NATO
- Administration creates new penalties on domestic fossil fuels, over an order of magnitude
- These penalties ironically do not affect imports, which don't provide Natural Gas, just domestic energy, which is responsible for Natural Gas glut
- Domestic Shale becomes far less profitable, first bankruptcies occur
- 2013 - Lac-Megantic, Canada - US Natural Gas Laden Shale train from North Dakota, shipping to Canadian pipelines and other terminals, explodes, incinerating parts of the town, immediately killing 47 people (and dozens after)
- Canada begins lobbying for the US to build more pipelines, instead of using rail, often
- Mid '10s - OPEC Price War, More Shale + New Bank Bankruptcies
- US being a net exporter is affecting volume shipments by OPEC
- OPEC begins price war against American Shale, OPEC+ joins OPEC
- Floods market with cheaper light crude
- Gas prices drop below $2/gallon
- Smaller regional/local banks exposed from 5% to as much as 30%+ investments, up to 50% of Shale companies are now in bankrupcy
- Remaining Shale and investors go lean, stop all new investments, drillling
- Late '10s - Trump Penalty roll-back, domestic tax incentives
- OPEC keeps up price war, keeping gas below $2/gallon
- Cuts penalties back to pre-Obama levels
- Heeds Canada, NATO, and restarted Keystone XL
- German and other NATO nations are completely dependent on North American Natural Gas for CO2 emissions and environmental plan -- per Martin-Harper and W. agreements mid-to-late '00s
- Domestic tax incentives, new tax code penalitize foreign investments, including Oil
- New stabilize most, but not all, Shale and most banks
- Remain Shale and investors remain lean, still no new investments
- '20s - Lockdowns, Biden administration restores Obama penalties, cuts all grants
- Lockdowns wipes out demand, gas remains under $2/gallon
- Biden administration enters, over doubles Obama-era penalities by sacking domestic Shale/fossil fuels with penalties based on overall CO2 by all nations, not just the US, more Shale and investors bankrupt, sue Biden administration
- Biden yanks all federal land and Gulf leases -- even those that can be issued by Mexico -- for energy, including in-progress
- Several small energy companies in-progress bankrupt, other, larger entities that survive, write-off losses, banks and investors sue Biden administration
- Biden administration ends Keystone XL
- Biden tells NATO to get Natural Gas from Canada and Russia, not US
- Canada finally gives up on Keystone XL ... permanently
- EU and NATO have unchoice words for Biden administration as a result
- US begins using more coal, no longer a net exporter of petroleum, Natural Gas prices over double
- By summer 2021, with increased demand recovering from over a year of lockdowns, Biden administration asks OPEC to increase production -- as expected
- OPEC rebukes Biden, but would only provide oil, not Natural Gas, so CO2 is rising
- Biden gives OPEC+ (Russia) incentives, US increases its imporation almost an order of magnitude -- still small, but a signficant portion of Russian income (60% overall from all nations)
- Judge rules Biden administration fossil fuel penalties can only use US domestic rates under interstate commerce law, and cannot penalize base on global output, pollution by China and others, reducing penalties to Obama-era
- Another judge rules yanking leases to be ex-post-facto and Unconstitutitional, order immediate grant of new leases, review of losses to domestic energy companies
- But damage is done, many energy companies either bankrupt or write-off in-progress ramp-up to extraction for yanked leases
- Russia invades Ukraine, Biden administration makes plea to domestic energy
- No domestic companies want to invest without 10+ years of guarantees not to yank leases or enact penalities against domestic energy after 14 years of it (sans 4 during Trump -- hence the guarantee)
- Biden administration refuses to accept terms set by domestic energy, stalemate ensues
- Without domestic energy investments now, prices will only increase and remain inflated for another 5-7 years
- Biden pleads with OPEC, and OPEC finally agrees to small increases in output, but prices will still remain inflated for years to come without further increases
- Shale / Natural Gas remains a Canadian only venture, at 1/10th the capability of prior, US investment to the 2nd Obama administration
- NATO remains tied to Russian energy, even nuclear-heavy France (although less than most others)
Anyone around energy -- domestic or not -- are pretty pissed off at us,
including all our allies in NATO that believed the Martin-Harper and W. agreements back in the mid-to-late '00s. We screwed our own allies. We screwed our own security.
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floridapolitics.com
