Russians, Natural Gas and the Green Agenda

In a detailed post in The Republican Standard, Shaun Kenney explores the connections between Russians, the anti-natural gas movement nationally and in Virginia, groups he refers to colorfully as the “Red Orchestra” and “Green Antifa,” the anti-Dominion Clean Virginia organization, the Virginia Public Access Project, and The Virginia Mercury. I’m not willing to connect all the dots that he connects. Indeed, there are some dots that I would not connect.  But he digs into subjects that need digging — and that Virginia’s mainstream media have studiously ignored.

Given the Washington Post’s proclivity for exploring every conceivable connection linking President Trump to the Russians, it is mind blowing to see how the Post downplays the body of evidence that Russians are meddling in U.S. national energy policy.

Ultimately, proof that the Russians have moved the needle on U.S. energy policy may be as elusive as proof that their interference altered the outcome of the 2016 presidential election. But you don’t find something unless you look for it, and the Post has no interest in looking for anything that might distract from the Trump-Russian collusion narrative or that might discredit environmentalists who whose climate-change agenda it supports. And neither does any other mainstream media outlet in Virginia.

Kenney draws attention to several irrefutable facts: It is in Russia’s national interest to shut down the U.S. natural gas industry; Russians have shipped liquefied natural gas to New England where opposition to new gas pipelines has throttled the gas supply from domestic sources; Russian Internet trolls have tried to stir up opposition to U.S. gas pipelines; and on at least one occasion Russians have funneled a large sum to a California environmental foundation, which might have distributed the money to grassroots groups around the country (although no one can say for sure where the money went).

Does that mean Virginians advancing the de-carbonization agenda in Virginia are Russia’s “useful idiots”? I don’t think so. Pipeline foes have their own reasons for opposing gas plants and gas pipelines that are entirely independent of anything Vladimir Putin is doing or saying. And they are supported by good ol’ American foundations and billionaires who contribute far more than anything the Kremlin could dream of adding to the effort.

On the other hand, does the war against natural gas align with Russia’s energy policy? Well, yes, it does. The Russians don’t want to see Americans exporting natural gas in competition with their own gas — if they can pry open a few U.S. markets like New England, then so much the better — and they would like nothing better than to hobble the U.S. gas industry. And that’s a story worth telling.

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44 responses to “Russians, Natural Gas and the Green Agenda

  1. The conspiratorial catnip is just too powerful for Conservatives these days. There are dozens, hundreds of such “conspiracies” in the right-leaning blogosphere and this is another.

    Yeah.. the mainstream media won’t report on it but how does that keep publications like the Washington Examiner or FOX News or others from “reporting” it…

    So the claim is that there are conspiracies out the wazoo and all the MSM is studiously pretending they don’t exist.


  2. Larry, which of the following do you contest?

    (1) It is in Russia’s national interest to shut down the U.S. natural gas industry;

    (2) Russians have shipped liquefied natural gas to New England where opposition to new gas pipelines has throttled the gas supply from domestic sources;

    (3) Russian Internet trolls have tried to stir up opposition to U.S. gas pipelines;

    (4) and on at least one occasion Russians have funneled a large sum to a California environmental foundation, which might have distributed the money to grassroots groups around the country (although no one can say for sure where the money went).

  3. I won’t accept policy crap from Clean Virginia, and I won’t accept ad hominem innuendo crap from The Republican Standard. And in both cases that’s pretty obviously what they are peddling.

  4. “On the other hand, does the war against natural gas align with Russia’s energy policy? Well, yes, it does.”

    And maybe Russian trolls against natural gas are a response to the US government’s hand in helping private natural gas companies make a profit. I came across an article in the Texas Tribune that described a new initiative … “the U.S. Gas Infrastructure Exports Initiative — a coalition of 25 companies, nine trade groups, five law firms, at least five federal agencies and a nonprofit think tank. Its mission: to drive sales of American natural gas by pumping dollars into pipelines and gas-processing facilities overseas.”

    “Since its launch a year ago, the initiative has funded 13 gas projects in 20-plus countries and generated more than $1.5 billion in exports, according to the U.S. Trade Development Agency, which heads the program …. In letters to members of Congress, USTDA described the gas initiative as a way “to ensure that emerging markets have the gas infrastructure necessary to be long-term off-takers of U.S. LNG exports.”

    … “Not every LNG supporter is a fan. The Heritage Foundation, a free-market group that approves of LNG exports, considers USTDA a form of corporate welfare and suggested in its budget recommendation last year that the agency be eliminated.”

    My own opinion aligns with the Heritage Foundation, who considers the initiative ‘corporate welfare’, and the NRDC who considers methane a destructive GHG, while people like Mack MacLarty, Brent Skowcroft, ErnestMoniz, David Yergin, the Columbia GlobalEnergy Center and some at Brookings are all behind this push for LNG export.

    Many of those people reached the idea that gas was a ‘cleaner’ energy source before the methane studies were initiated and evidently, like Dominion can’t change their view once it is established.

  5. This is a topic on which I actually have some real expertise and the Republican Standard article is beyond ridiculous. I was Moscow bureau chief for Business Week for three years in the 1980s and for three more in the 1990s. In between, I was on the foreign desk at BW in New York and coordinated our coverage on Russia and that part of the world.

    Energy was obviously a huge story for us. To that end, I have reported on energy from Siberia, northwest Russia, the Russian Far East, Uzbekistan, Kazakhstan and Azerbaijan. I have flown in a helicopter above the Arctic Circle to see some rigs. Also covered the Caspian Sea and all the many, many battles over pipelines there. I have had an exclusive interview with Nursultan Nazerbayev, the president of energy rich Kazakhstan. And so on.

    First, does Russia want to shut down American natural gas production? Maybe but they can’t if they tried. There is simply no way that Russian product can compete with the U.S. network of pipelines and LNG ships are just too small to make much impact in the market.

    Natural gas ships with Russian product inundating Boston? What the Economist story actually says (if you read it) is that more cargo ships are switching from using bunker oil which is very polluting to natural gas. They are NOT bringing in much LNG product for sale in the U.S. market. This completely misunderstands what is going on. We’re talking fuel for ships and maybe some of that comes from Russia.

    Russia’s real markets are Europe, China and India. Russia has been piping gas into Eastern and Western Europe for decades. The latest plan goes underneath the Baltic and ends up in Germany. That’s gas. Asia is an obvious and expanding market. Guess where Dominion’s Cove Point LNG plant goes? India and Japan.

    What’s really hurting Russia is that U.S. fracking has changed the global dynamic of pricing. Shale gas and oil have brought the prices down and they will stay there. Russia actually has only a few things good enough to export — energy, weapons, timber and now, software. Ever see a Russian car in the U.S.? I drove three into the ground. Not that bad, actually but they really pollute.As long as world energy prices are high, Russia is more aggressive internationally. I remember that years agoi, the MSM WaPo did a brilliant report tracking historic energy prices and Russia aggression.

    As probes show, Russian social media ploys are now hitting many targets and energy is just one of them. They assume that many, especially conservative bloggers, are ignorant fools.They are right. I don’t know where to begin. One matter is that a lot of oil and gas trading is swapped out. Example: during the Cold War, when the USSR was fueling Cuba, they didn’t always tanker the stuff all the way from the frozen coast. They traded it out for product from Mexico, Venezuela or Trinidad.

    What these silly “investigations” do not show is that climate change is an extremely serious problem. Eventually, petroleum has to go or be changed in very substantial ways. They don’t want to address that.

    Maybe the Republican Standard should stick to Virginia tax issues.

    • Peter, You certainly know more about Russian energy policy than I do. But I was drawing from this January Washington Post article:

      A tanker carrying liquefied natural gas from a sanctioned project in Russia’s Arctic has arrived in Boston Harbor, where it will be offloaded for American users.

      The giant tanker is carrying the first LNG exported by the Yamal facility, a $27 billion project whose majority owner is the Russian company Novatek. As of Sunday evening, the tanker was in the Mystic River at an LNG terminal, where the liquefied cargo will be turned back into gas form and distributed to gas companies and electric power utilities.

    • If they move to tax issues, Peter, then I can take them out. From the get go it’s been clear that TRS is a Dominion project.

  6. Mr. Kenny’s article seems to demonstrate a certain level of blunt force trauma but LNG exports from the US are surging. Take a look at the following chart:

    Is it really so far fetched to believe that some conservation organizations are being used to try to nip the very rapidly growing US LNG export business in the bud?

    • In between their efforts to elect Trump? Heavens, I wish we could blame that on the Russians and not ourselves…..

    • That graph only shows me, that after decades of zero LNG export, USA has finally started moving the needle off of zero. Without some kind of additional perspective, it is hard to say if that tic up is a big number, or just non-zero. But my recollection is the fledgling proposed USA LNG export projects have been very slow in getting going. We might finally have one plant exporting?…is what I am thinking.

      • Within 3-5 the gas industry expects that about one-third of our domestic gas production will be for exports. Some by pipeline to Mexico the rest via LNG to South America and Asia.

        Even with cheap gas the extra $4-$6 /mcf to export it does not allow us to compete with current prices in Europe.

        The more we send our cheap gas overseas the faster our prices go up at home. I don’t understand how we see that this is a good thing.

  7. I don’t see the Russian interest in our gas market the way it has been portrayed. Although, I see the way we have portrayed the Russian influence to be in their interest.

    This article asks if the Russians are trying to shut down the U.S. natural gas industry. I don’t think so. They are smart enough to realize that our domestic industry is based on pipelines just as their export program is.

    In the last 20 years we have built new pipelines that provide more than twice the capacity needed to meet our peak domestic use in 2017. Dealing at this level is not the way to disrupt the U.S.

    What is more effective is for the Russians to bait us into an international contest using gas and oil.

    Russian reserves of both commodities are much greater than ours. Most of it is distributed via pipelines to their international customers. They have conventional wells that are inexpensive to develop and decline over decades.

    They know that if they appear as our nemesis in the energy arena our greed and desire to win will draw us into a contest where we are at a severe disadvantage. Our pride will push us into strategies that work against our long-term interests.

    They convinced the previous administration to look at gas as a geopolitical tool. Interest in that concept has ramped up with the present administration. The Russians are aware that Wall Street and the energy producers focus primarily on short-term profits often disregarding long-term consequences.

    Our shale wells for gas and oil reach peak production in 3-5 years, then rapidly decline. The next wells are less productive, even with advances in technology. Liquefying gas is expensive, as is transporting it in expensive ships, then regasifying it at the other end. Currently, even with our cheap gas we cannot compete with gas delivered by Russian pipelines to Europe.

    The Russians, and others, are aware that when Australia shipped its cheap gas overseas domestic prices increased over 300% in ten years.

    It is a brilliant strategy to lure us into picking an international energy fight with them, which they are much better positioned to win. If we build extra pipelines and export facilities to ship our cheap energy overseas, our energy costs will increase faster here at home. In just a matter of years, not decades, our prices for oil and gas will be much higher. Wall Street will be happy. The oil and gas producers will finally be able to pay off their loans. But the citizens of main street will suffer and the U.S. will have squandered a cheap strategic resource.

    Just ask the Industrial Energy Consumers of America what they think about this geopolitical brilliance. They represent U.S. industries with over $1 trillion in revenues. They are attempting to bring more jobs back to America
    but see that this rush to export will stymie that. They have just issued a vociferous opposition to the newly announced short-cuts that the DOE announced in the LNG export approval process. Their businesses and job creating abilities have been short-circuited by our fear and greed.

    By meddling in our electoral process, involving both parties, the Russians have diverted U.S. attention into a circus of political convulsions that is nowhere near an end. Meanwhile, the Russians and the Chinese play the long game while we increase domestic prices by building unnecessary projects and squandering cheap resources to make a quick buck.

    If we really wanted to strengthen our international influence and competitiveness, we would find ways to use less energy and lower its cost n the U.S. This would create jobs and make U.S. industry more competitive worldwide. We could make money by teaching other countries to do the same. This would greatly diminish Russia’s ability to hold other countries hostage over energy.

    Developing a modern grid as nested micro-grids would reduce its exposure to cyber attacks, rather than extending the unwieldy and brittle grid that we have today.

    So much to say about this, but continuing to retweet the messages of fear just plays into Russia’s game plan.

  8. Since as Peter says, Russia does not have a lot of good stuff to export maybe all some Russian trolling is trying to do is to not let prices go too low because of the increased fracked LNG that we are exporting. Russia loses with a low price.

    I read that in a business email an analysis saying … not sure where

    • Jane,

      Russia has a huge amount of natural gas and oil. More than we do here. It is cheaper to extract than shale resources. We cannot export via ship cheaper than Russia can export via pipeline.

      • My point was that by exporting a large amount of LNG we are keeping the global price low. Without our supply on the global market the price would be higher …more to Russia’s liking.

  9. Was just on the phone with one of favorite enviros today and he says if there is any Russian payola out there, it seems to be missing him. If you get a contact, Jim, I’ll hook them up.

  10. I am actually cautiously optimistic how well natural gas useage has grown. After decades of getting coal shoved my throat, I never thought we’d see the day that natural gas use would grow, which I felt would benefit the environment, economy, and America. I always anticipated resistance to natural gas, but I did not foresee fracking at all, nor fracking as central focal point of the resistance to natural gas. I thought we were going to have to import natural gas.

    By the way, seems to me there was recent news story that New England natural gas power plants are not doing well economically, so I am unlcear how much longer they need those Russian imports.

  11. TBill,

    I believe many people feel the way you do. However, most have not heard the news that gas has the same GHG effects as coal, and that the price will only go up from here, barring a major economic setback.

    Higher gas prices will not improve our economy.

    Jim is right about the LNG delivery during January’s cold snap. The New England states have resisted adding more pipeline capacity. Even the utilities were opposed to the new pipeline that was proposed because of the huge cost burden it would have put on their customers.

    The RGGI states have been trying to avoid developing more natural gas generation because of the emissions and the increasing cost trajectory. They are in the early stages of a significant reduction in due demand using energy efficiency, demand response, renewables, etc. The cold snap hit them before they were fully prepared and they needed a short term supply of fossil fuel.

    Many local gas distribution companies have LNG storage as part of their system to deal with peak use. Many utilities, especially in the north, have oil-fired backup capability to deal with extreme weather events. This is a much more optimum solution to deal with events that last only a few days and occur only every 3-5 years than building expensive new pipelines that would be severely underutilized but cost the same regardless of how much they are used.

    • Tom, although I know it is a fossil fuel, I thought natural gas has a lower CO2 emissions than coal. Are you factoring leaks or something else?

      • I believe Tom is factoring in the system-wide effects of gas, which include methane leaks into the atmosphere from gas wells, collection pipelines, and transmission pipelines. The leaks are getting a lot of industry attention, and the gas companies are tightening up. What the coal/gas comparisons ignore is that coal mines are gassy and also release methane. Gas is what causes mine explosions, and MSHA orders coal companies to ventilate the emissions out of the mine and into the atmosphere.

        • Jim is right. Much of the methane produced in Virginia is from coal beds. We don’t have many takeaway pipelines in southwest Virginia so this gas collected from the coal mines is sold in other states.

          Because methane is 86 times more potent than CO2 (within the first 20 years of release) a little contributes a lot to GHG effects.

          The CO2 released from burning gas is about half of what is released from an equivalent size coal plant. However, the methane that leaks from extraction, storage, transmission and the CO2 produced by the power plant results in about the same overall GHG effect as a coal plant. Many of these leaks can be reduced fairly inexpensively, but so far they haven’t been. So currently the GHG effects of burning gas is about the same as burning coal, a fact that is often overlooked. This creates a false narrative about gas being a “clean” fuel.

          • That’s because the value of the gas is so low. Get it back to $10 and the leaks get fixed pronto! 🙂 “Clean” has always been a relative term and NG is cleaner, substantially cleaner. Even what you would consider the cleanest generation sources, however, have some level of impacts.

          • Besides CO2 and methane, coal creates particulates which may impact ice melts, and has causes a high fatality rate (accordng to EPA). Not to mention for coal, NOx SOx mercury solid waste issues and so on. My personal environmental stewardship tells me natural gas is much better for the environment….and much cleaner.

  12. There is no Russian conspiracy except in addled minds… but there are market forces as there always are and the Russians like the Chinese and others use market forces when they can to their advantage – as we do actually also.

    But enviros are opposed to natural gas because it is a potent greenhouse gas – as bad as coal and that’s the basis of their opposition to pipelines – but they would be just as opposed to imports for the same reason.

    The leaks are a problem but my understanding is that just on an apples to apples comparison – gas is a more potent greenhouse pollutant although that aspect is still being debated.

    But there is another problem and that is that solar/wind do not work with baseload generation like coal and nukes – it needs to be matched with a fuel that can quickly ramp up and down in response to solar/winds inherent variability.

    Some feel that this makes gas an incredibly important fuel and that without it – we cannot really utilize wind/solar in any real useful way because when it fails to generate – something else needs to – and coal and nukes basically run flat out 24/7 – they cannot “modulate”. So they would run no matter what you did with wind/solar.

    However, if gas ends up just as potent a greenhouse gas as coal – then we have not solved that problem and that’s why for many enviros – batteries are the hope… BIG , monolithic batteries than can carry the night!!!!

    But that’s just not going to happen anytime soon – we have batteries that can carry loads for seconds, minutes in a transfer scenario but batteries big enough to carry a city at night at just not a reality. It’s not that they could not be physically built – they could but their size and cost would make electricity even more costly than that which is generated by diesel on most of the worlds islands.

    Even on smaller islands – where batteries might be feasible – there are not there yet – there are a few pilot projects but almost no islands have batteries big enough to carry the night.

    This is why folks like Tom advocate demand-side conservation to save electricity, to get the cleaner air benefits of less generation of electricity.

    Some day – I’m convinced, we’ll get a breakthrough in batteries and perhaps a breakthrough in nukes – i.e. nukes that can shut down automatically rather than melt down – and perhaps nukes that can modulate.

    If nukes could modulate (and be safe enough to locate more of them near population centers) – it would be the perfect match for wind/solar and it would solve global warming.

    Most informed enviros know that gas is a “bridge” fuel and the goal is demand-side conservation, batteries and modern nukes….

    Most of them that are informed at that level know how the Russians, trolls and conspiracy theories work.

    • Larry I could not agree with you more. Forget Russia, we should give liberals and Democrats complete credit for a policy of vilifying all use of fossil fuels in America and also demanding the immediate elimination the American fossil fuel industry. To me this is big part of the reason why Trump won the last election, because many American are not going along with that liberal extremism.

  13. A few more points. Last winter, an LNG ship with some Russian project from a Yamal facility unloaded at an LNG facility outside of Boston. That facility supplies about 20 percent of New England with gas. Most reportedly comes from Trinidad.

    As for the three LNG tankers with Russian product bound for the U.S., right now I can find no reporting outside of Moscow and the Kremlin about this. A trade journal picked it up but a stroy like that should have made news.

    What is in the news is that Poland just signed a contract with the U.S. to import years’ worth of LNG from the Gulf Coast. This will supply about 15 percent of the Polish market. Countries like Poland and Ukraine are understandably reluctant to rely too much on the Russians who have a tendency shut things off when they get mad.

    As far as Tom’s comments on U.S. exports, that is a great issue. Here’s a story I did on the topic for The New York Times a few years ago. Admittedly it is rather dated:

  14. Reed,
    Thanks! It’s a fascinating topic and as you can see the Main Stream Media isn’t exactly ignoring the LNG story. I know that the Times has done many, many more. The Post has done a bunch, too, and of course, the Journal.

  15. According to the Energy Information Administration (March 2018), U.S. exports of LNG quadrupled in 2017. LNG was sold to more than 20 countries. By 2019, export capacity is expected to reach 9.6 Bcf/d (over 10% of current U.S. peak gas usage). By 2020, the U.S. could become the world’s third-largest LNG exporter behind Australia and Qatar.

    Cove Point began operation early this year. The Sabine Pass LNG export facility in Louisiana went into operation in 2016 and is continuing to expand until it reaches the capacity to export 4.2 billion cubic feet of gas per day (Bcf/d). The Elba Island export plant in Georgia will begin operation early next year. FERC has approved another nine LNG export terminals (including expansions), with a combined capacity of 14.9 Bcf/d. There are another 14 projects with a combined capacity of 25.4 Bcf/d under review. All together the U.S. has 44.2 Bcf/d of LNG export capacity in operation, under construction, approved, or under review. That’s over 75% of China’s or Europe’s expected gas consumption in 2040. Qatar is currently the largest LNG exporter in the world at 10 Bcf/d.

    BTU Analytics (October 2018) says “For domestic consumers of natural gas in the US, the optimal LNG export levels is zero to keep prices low.” But gas producers “want as much demand in the form of LNG export as possible to boost prices.”

    Gas producers and pipeline developers are aware that domestic demand for gas will not provide the windfall they had hoped for. Growth in traditional uses of gas is relatively stable. More gas-fired plants are due online in Ohio and Pennsylvania over the next few years, then the domestic use of gas for generating electricity will stabilize and likely decline as gas prices increase. The way to increase gas prices for Wall Street and gas producers is to export it. Forbes (April 2018) projects that exports will account for 70% -80% of new U.S. gas demand for at least the next five years.

    The Department of Energy confirms other observers’ concerns about overbuilding pipelines by stating, “In the mid to long-term, incremental outbound capacity from Pennsylvania and Ohio is expected to exceed Marcellus production (i.e., pipeline constraints in Marcellus are a short-term phenomenon).

    We won’t have enough gas supply to fill all of the pipelines we have built, at least for the next five years. LNG exports will compete with domestic uses. The highest bidder will probably win, increasing domestic prices, especially during the winter heating season. This will increase the fuel risks that Reed referenced in the NERC report.

    For a long time we prohibited the export of oil and gas because it threatened our domestic security. Recently, Congress overturned that prohibition. Now, just as we are beginning to use our shale resources to reduce our reliance on imports, we want to export our currently cheap oil and gas for the short-term profit of a few companies and the long-term detriment of the citizens of the United States.

    We allocate hundreds of billions in defense spending each year to safeguard these assets in other countries, yet we willingly let them flow outside of our own borders rather than steward them for our own future use. It seems to be all about the money, just as with the energy proposals in Virginia.

    In November, the Industrial Energy Consumers of America (IECA) objected to the Senate about its proposed bill that would make it easier to permit LNG facilities. The IECA continued its long-standing objection that “all economic benefits [of exports] go to Gas Producers and Exporters.” They reminded the Senate “there is all pain and no gain for consumers.”

    As a representative of U.S. manufacturers with over $1 trillion in annual revenues, the IECA said “The manufacturing sector accounts for 12.6 million high-paying jobs. According to the U.S. Bureau of Labor Statistics (BLS) the entire oil and gas industry employs only 74,000 jobs. And, LNG export terminals, once constructed, employ only hundreds of people. You could double the number of wells drilled and employment does not go up measurably. But if natural gas prices rise, it could threaten millions of good-paying manufacturing jobs.”

    Neither FERC nor Congress has evaluated whether the aggressive exports of natural gas are in the public interest. Yet, we are on a rapid path to invest hundreds of billions in projects that work against the economic interests of the people of the United States with little regulatory oversight.

  16. All of this discussion leaves out the real potential of solar, wind and other forms of truly renewable energy. The “shelf life” of all that natural gas may be short if the renewables continue to make economic progress at the rate they have been lately.

    As for Russia – they want to disrupt America by various different means. A divided America is a weak America and a weak America won’t stop Russia from retaking the Ukraine. If the CIA could figure out how to forment discontent in Iran would you have any reason to believe we wouldn’t do so?

  17. “As for Russia – they want to disrupt America by various different means.”

    Yes, indeed, and the Russians today are working overtime to “disrupt America” in any and all ways they possible can. Time and again since WW2, Russia has attacked the energy dependence of other countries to intimidate and other wise gain advantage and/or control over them. Cuba, for example. Today they use this tool like they use cyber warfare, and/or intentionally inject civil unrest into other nations, and do so in tandem with energy leverage. Like today in Africa, and around the world.

    Also See today’s WSJ article by Douglas Feith – the US Military’s Crisis of Imagination – as to how this can work.

    “The “shelf life” of all that natural gas may be short if the renewables continue to make economic progress at the rate they have been lately.”

    I hope that is the case. I want renewable power as much as anyone, so long as it works, is prudent, reliable, cost effective, properly deployed, and presents no threat to the gird and strengthens our national security, instead of threatening it. We need a rock solid grid and rock solid energy sources.

    • Reed,

      It seems that we agree on the basic goals after all. I guess our point of departure is how we see a rock solid grid with rock solid energy sources taking shape.

      I see the fundamental building blocks of our 20th century grid as being less rock solid in meeting the needs of the 21st century than they were in the last century. With greater penetration of renewables and our current, largely digital, lifestyle, our grid requires much more flexibility than ever before to remain reliable and responsive to our needs.

      Many say that the electrical grid is the most complex machine ever built. It is based on the same hub and spoke concept that the mainframe-based computing model was built on. Currently, it is an amalgam of a wide variety of mostly electro-mechanical equipment that is sometimes slow to respond, often requires manual resets, and too often doesn’t play well with others that are designed a bit differently.

      The sources of generation that have been the mainstay of our energy system for decades (coal, nuclear, and gas) are not very flexible in their operation (large gas-fired units only moderately so) and are built in big chunks, usually connected with only one set of wires to the overall system. This can result in losses of large amounts of generation when only a single failure occurs.

      Coal has many undesirable attributes. Nuclear and gas-fired units are on an upward cost trajectory that is rising faster than we have projected. Although, these types of units will be part of the system for some time, they no longer provide the attributes that offer enough flexibility and reliability to solely rely on them in the future.

      I owned a computer-related business in the town where IBM was founded. I had a front-row seat to watch the transformation of the mainframe-centric model into the distributed (personal computers and cell phones), networked, and server-farm (with off-site mirrored backups) model that we have today. That transformation multiplied customer choices, reduced costs, and increased performance by orders of magnitude.

      I believe it is time for a similar, but perhaps not so dramatic, transition in our energy system. We now have the tools, which are getting better and cheaper, to make this transition if we have the vision and political will to make it so. With nested micro-grids and distributed energy resources our utilities will operate a bit differently in collaboration with a variety of energy services providers, but they will have the opportunity to prosper more if they perform better.

      I am just trying to say – let’s get on with it! Keeping in mind the outcomes that you described.

  18. I was digging around more and found this Fortune story from earlier this year about why Russian gas might end up in the U.S.

    A few points. The Russian product comes from the Yamal facility on the Arctic which is often frozen. The project uses two, specially-design LNG tankers that double as icebreakers. They routinely take the gas to a terminal in the U.K. and there the gas is mixed with gas from other sources and reshipped to wherever the buyer is. It is too expensive to send these vessels all the way to the U.S.

    It might seem easier for people in the Boston area to get U.S. gas from Dominion’s Cove Point that has been reconfigured to export gas or from the Gulf Coast. The 1920 Jones Act doesn’t allow it. The law requires that shipments from a U.S. port to a U.S. port have to be made on ships built in the U.S. and on U.S.-flagged ships. Apparently there are no LNG tankers that fit either bill.
    It is too bad that right wingers trying to find the Green Anti-Fa and Russian funding leave out these curious little points.

  19. One more factoid that I forgot about For more than a decade, The U.S. government and its contractors have been using heavy lift Russian-made RD-180 rocket engines for space launches, including military ones. Purchases were suspended in 2014 over Ukraine but they are proceeding again.

    Spies anyone?

  20. The Oil (and Banking/finance) Industry have driven Geo-politics since its inception during the Civil War. I suggest everyone on this blog read Matthew Auzanneau’s excellent history of this, just published, “Oil, Power and War.” You will understand why, the now “big 3” producers now – US, Russia and Saudi Arabia play their cards the way they do.

    With Global Climate Change the result, you now have an interesting mix as the producing/controlling energy powers jockey and sway as most of the world’s countries that just met in Poland try to figure out how to move away from this attachment to this industry, with no current credible replacement energy available to meet current and future demand. Without global cooperation, treaties, commitments, and enforcement and funding mechanisms, you can expect a ratcheting up of the Oil/Gas powers as they continue to fight over production and distribution.

    • Yes, this is a very big deal, far bigger than all but a few realize.

      Energy now is an offensive and defensive weapon played out on and local and international battle grounds. Those that have the most of it, including the best mix of secure and flexible reserves together with on hand and quick ramp up supplies and flexible distribution networks of all sorts, are best able to protect their interests, prevent interference and war, and win it, if necessary.

      Jim Loving, thanks for your tip on the book. I’m getting Oil, Power, and War.

  21. Sure is. When I researched my book on Massey Energy and the coal industry I flew to Austin, Texas to interview Massey’s last chairman — Bobby Ray Inman. The retired admiral had been director of the National Security Agency and No. 2 at the CIA. I asked why someone with his background got involved with coal and he said because the global aspects of it were just too interesting.

  22. Tidbits from OikPrice intel … Question is ..Who thinks we could end up with some stranded assets? Europe did and wrote down a very large fossil infrastructure number.

    LNG is up and down … Polish Oil & Gas Company, or PGNiG, signed a deal with Sempra Energy’s (NYSE: SRE) Port Arthur LNG facility, importing 2 million metric tons of LNG per year. The project has not received an FID yet, but the agreement with Poland could move it forward.

    The U.S. government has long pushed LNG exports as a vehicle to pry away Eastern Europe from dependence on Russia.” Can’t we call this corporate welfare? We really can’t compete with Russian gas directly in Europe, though the Saudi’s and OPEC are doing an oil production cut to stop the global oil price from falling further.

    Everyone seems to think the LNG demand will be coming from Asia which means potential new pipeline requirements in New Mexico and Arizona.
    Meanwhile “ExxonMobil shelves Canada LNG project. ExxonMobil (NYSE: XOM) has scrapped its plan for its WCC LNG export terminal in Canada. The move comes shortly after Royal Dutch Shell (NYSE: RDS.A) gave the greenlight for its massive LNG export project on Canada’s coast. Exxon’s project was further behind, and the oil major is instead focusing on a handful of LNG projects in Papua New Guinea, East Africa and with Qatar. “

    And … Shell has new energy plans as well as fossil plans … “Shell spends $175 million to develop offshore wind. Royal Dutch Shell (NYSE: RDS.A) spent $175 million on the rights to develop offshore wind projects on the U.S. Atlantic Coast. The Anglo-Dutch oil major said that its offshore expertise from oil and gas can be translatable to offshore wind.” Guess they saw the Block Island project as evidence of an opportunity that will grow.

    Watching this gas fiasco may turn me into a libertarian!

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