Institute for Energy Research

Potential Oil Production Increases in Gulf from Speedier Permitting

The Obama Administration has long been hostile to domestic oil and natural gas production. The impacts of these policies are becoming clear. One recent study found that the Administration's moratorium and slowdown in permitting in the Gulf of Mexico has cost the United States over $4 billion in economic output and nearly 20,000 jobs.[ia] A new study has found that there is great economic potential if the Administration speeds up their slow permitting process.

Second Thoughts on Electric Vehicles

One of the problems with making purchases based on "the greater good"--as opposed to the direct benefits and costs--is that your estimate might turn out wrong. For example, many people simply assumed that electric vehicles were "good for the environment" and so were willing to spend more, and put up with more hassles, thinking that they were helping future generations. Yet some recent studies suggest that the environmental case for electric vehicles is more dubious.

Energy Reality Headlines

The Obama Administration's energy policy is all about providing special government (taxpayer) favor for energies that consumers would otherwise reject as too expensive and/or unreliable. Ethanol, wind power, and on-grid solar power, indeed, have been artificially constructed by government largesse and face a downsizing along with the federal budget. "Bubble government jobs" might just become a wikipedia term before long.

NAT GAS Act “Benefits” Only Half of the Equation

In an effort to increase the use of natural gas as a transportation fuel, Rep. John Sullivan (R-OK) introduced a bill in April of this year titled "The New Alternative Transportation to Give Americans Solutions Act," or NAT GAS Act.[ia] The bill provides tax breaks to subsidize the manufacture of natural gas vehicles, fueling stations, and infrastructure. As we have learned from automobile fuel economy mandates and the banning of incandescent light bulbs, when the government centrally plans economic activity it fails to take into account the full impact of its proposals and, more times than not, consumers suffer higher costs.

A Definition of the “Green or “Clean Economy”—Not What You Would Think

For years, the Obama Administration has claimed that the stimulus will increase employment through "green jobs". But what are green jobs? Are they jobs in the solar and wind industry? Yes, but according to a new study, the majority of green jobs in the United States are actually jobs in waste management (garbage), mass transit, and other non-energy areas, and those jobs are not stimulus-related. Even including those mature jobs, the green or "clean economy" jobs represent just 2 percent of all jobs in the United States, and renewable energy jobs, those touted by the Administration as being "green", make up just 5 percent of the "clean economy" jobs. That compares modestly to the largest sector of the economy--health care--employing 10.2 percent of all jobs, but unlike health care employment, "clean economy" jobs are growing slower than the U.S. economy.

Offshore Oil Production Stymied: What about Onshore

We all know that the Obama Administration has slowed the progress of oil drilling offshore--in the Gulf of Mexico, the Atlantic and Pacific oceans, and offshore Alaska--supposedly to ensure safety because of the oil spill that occurred in the Gulf as a result of BP's accident at its Macondo well last year. But it seems that the moratorium and "permitorium" imposed by the Obama Administration has not been sufficient punishment since the Department of Interior just announced further regulations on offshore drilling. But how is onshore drilling faring? Are we promoting it sufficiently during this time of high oil prices? Not according to a blueprint recently released by the Western Energy Alliance. The alliance is indicating that regulatory changes are needed for western onshore production to reach its true potential.

Are Tax Hikes Good for the Economy?

Last week, the American Energy Alliance (AEA) released a new paper [.pdf] by LSU economist Joseph Mason arguing that--contrary to their stated purpose--the Administration's proposed tax changes involving the oil industry would not increase federal revenues once we consider the impact on total economic activity.  In fact, Mason predicts just the opposite: increasing tax rates will lower revenues, lower economic activity, and create fewer jobs. Mason instead proposed that unshackling the development of American mineral resources would promote the Administration's stated goal of economic growth while reducing the long-term budget deficit.

Renewables Surpass Nuclear Energy: The Rest of the Story

Last week, the Sun Day Campaign released a news advisory with the provocative claim that for the first time renewable energy produced more energy than nuclear and is closing in on domestic production of oil.[ia] While the numbers are accurate, the claim may be a bit disingenuous. Many environmentalists would like people to assume that most renewable energy production is from wind and solar, when the reality is that the majority of renewable energy production is from hydropower and biomass. Non-hydroelectric renewable fuels, the kind of renewable energy most environmentalists prefer, only produced 5 percent of the energy we actually consumed during the first quarter of 2011.

Why Free Market in Energy?

The Institute for Energy Research (IER) is dedicated to the promotion of free-market solutions to America’s need for abundant and affordable energy. On issue after issue, IER points out the shortcomings of government intervention and the benefits of allowing the operation of the market. The present article will sketch the broad reasons for this general presumption in favor of free markets over bureaucratic planning.

Shale Oil vs. Peak Oil

J. Howard Marshall II had heard it before in his decades as an industry scholar, regulator, and executive: We are going to run out of oil! Marshall recounted one story concerning the eminent petroleum geologist Everette DeGolyer (1886–1956) in his autobiography, Done in Oil (Texas A&M University Press, 1994):

Britain Evaluates Capacity Payments for Back-Up Generators to Wind Power

Because wind does not blow all the time, wind power is an "intermittent" technology that needs other power as back-up to ensure that the lights stay on. Currently, wind capacity is backed up by existing fossil fuel capacity (natural gas or coal), but Britain has determined that it will need an additional 17 natural-gas powered plants to keep the lights on by 2020.

Obama’s SPR Release

On Thursday, June 23 the Obama Administration, in conjunction with other governments, announced the release of 60 million barrels of oil from their strategic reserves over the next month. The ostensible purpose of the release was to reduce oil prices and ease gasoline prices for American motorists as we head into peak traveling season.

Shale Oil May Mirror the Shale Gas Boom

First, hydraulic fracturing gave the United States a boom in shale gas that lowered natural gas prices by 54 percent between 2008 and 2009. Now, shale oil discoveries are being made that can substantially increase onshore oil production. The Bakken oil field located in western North Dakota, northeast Montana, and Canada's Saskatchewan Province is pumping 225,000 barrels of oil a day today that started at just 3,000 barrels per day in 2005, with estimates of a million barrels of oil production per day by 2020.(i)

China’s Coal to Liquids Program Not Allowed in the United States

Producing oil from coal is a technology that has been around for a long time. Germany used it to fuel its tanks and aircraft during World War II and South Africa is using it today to provide about 30 percent of its gasoline and diesel supply. China is now embracing it since they are the world's largest producer and consumer of coal. But for the United States, the country with the largest coal reserves in the world, coal to liquids plants have been stymied because it is argued that its life cycle greenhouse gas emissions would be higher than that of conventional oil. So, U.S. coal producers in Montana and Wyoming are looking toward Asian markets for new coal sales and coal producers in West Virginia and Kentucky have increased their exports of coal for steel making.[a2]

Natural Gas Rent-Seeking

Four-dollar gasoline and natural gas. This per gallon price is high for the oil industry and low for the natural gas industry given historic prices.

Does Government Intervention Make Energy Cheaper?

The proponents of renewable energy like to argue that renewables are cost-effective and create jobs, despite mountains of evidence to the contrary. One of the latest examples of this was a recent post put out under the auspices of Joe Romm's "ClimateProgress" blog seeks to debunk the "myth" that government regulations increase electricity prices for consumers. The writer, Stephen Lacey, fails to make his case, relying either on calculations showing that the burden is merely shifted to taxpayers, or on "experience" that doesn't really test the full brunt of the proposed regulations.

New Low

WASHINGTON--This morning, the Obama Administration announced that they would release 30 million barrels of oil from the Strategic Petroleum Reserve.

Salazar Applauds—But Solar Project Output Will Be a Fraction of Its Competitors

On Friday, Secretary of the Interior Salazar praised a new solar project in California, expected to be the largest in the world, as a major milestone in fulfilling President Obama's promise to expand renewable energy.[0] The first phase of the project, to be completed in 2013, is being supported by a U.S. Department of Energy $2.1 billion loan guarantee. The 1,000-megawatt Blythe Solar Power Project in Riverside County, California claims to be able to power between 300,000 and 750,000 homes and create 1,000 temporary jobs and about 200 permanent jobs. The truth is that solar power alone will dependably serve very few homes because it is too unreliable but will cost up to 5 times as much as the cheapest form of electrical generation. Consumers, businesses, and the taxpayer will suffer.

The point of cap-and-trade is the tax money

It's not about reducing carbon dioxide emission or reducing global warming. The experience of the Regional Greenhouse Gas Initiative (RGGI) in the northeastern United States shows us once again that the point of cap-and-trade is to generate tax revenue and not to reduction carbon dioxide emissions or reduction global warming.

Up from the ground, came a bunch of millionaires

This is not 1962 and this is not a re-run of the television show "The Beverly Hillbillies," but currently there are many people in West Virginia who are becoming millionaires overnight due to Marcellus Shale. With local government officials allowing oil & natural gas companies to lease property and drill for natural gas from some Marshall County residents, there have been reports that compensation has been as much as $60,000 per month.