In the Politico magazine, Bill McKibben is out with an article headlined, "A Big Fracking Lie" which purports to tell the truth about plans to export liquefied natural gas from America to Europe or Asia. According to McKibben, no one but special interests (i.e. those who liquefy gas) will benefit from this trade and everyone else in America and the world will suffer. Americans will have to pay more for all sorts of products due to higher prices being realized for natural gas and the world will suffer due to the terrible global warming that the gas will cause. After reading McKibben's piece, one can only conclude that he is either completely uninformed or a total liar.
Let's start at the beginning.
1. There would be millions of Americans who will benefit from this trade in LNG. First, there are the folks who own the land in Pennsylvania, West Virginia, New York, Oklahoma, Texas, Colorado and the other states where the gas will come from. These farmers, ranchers and other landowners get royalty payments which are usually around 12.5% of the total revenues obtained when the gas is sold. For each billion dollars of gas sold, there would be about 125 million dollars paid to hundreds of thousands of people across these states, hardly a special interest. Then there are the hundreds of thousands of people who will get jobs in the natural gas industry. The recent estimates are that in just Pennsylvania, close to 250,000 jobs have been created in this field. When all states are included, the number of jobs created due to the export of LNG is truly significant. Again, these jobs for regular Americans who are struggling in today's economy are hardly payoffs to special interests. Then you have the companies that will actually liquefy the natural gas and sell it abroad. The ones which have so far been approved and licensed for this trade are large public companies which are majority owned by public shareholders like pension funds and mutual funds. In other words, the profits earned from the LNG trade will go to the retirement of teachers, firemen, union workers, as well as individuals who have invested in the companies. Are these now some sort of special interest? I doubt it.
2. There will not be millions of Americans who will suffer from this trade. McKibben announces in his piece that by selling our natural gas to other countries, we will raise the price here and give away our competitive advantage in energy costs. That clearly means that McKibben does not understand this industry at all. American factories will still get their natural gas at the basic market price, just as is the case now. The Europeans and Japanese will have to pay more for the gas; the price to them will have to cover the cost of liquefying the gas, shipping it to its destination, and then regasifying the LNG. In other words, gas in Europe and Japan will still cost significantly more than it will here in the USA. It is true that the cost of gas in those countries will be reduced somewhat due to this process, but that will also result in hundreds of billions of dollars being sent by the foreign countries to the USA in payment for that gas. This huge influx of wealth to America will help the entire economy and will be of great benefit to the average American worker. It is the kind of income that will go to people of all income levels rather than just to the wealthy.
3. McKibben is wrong in his environmental analysis. His conclusion is that burning LNG from the USA in Europe has the same impact on global warming as the burning of coal mined on that continent. The claim is utter nonsense. While McKibben would never admit this, we have to start with the point that man-made global warming may not even exist. After all, temperatures have not risen for the last 15 years. There has been a big increase in carbon dioxide during that period, but the temperatures have just stood still. The warming that occurred prior to that time may be nothing more than the normal cycles of climate that the world has experienced for millions of years. Next, we also have to consider that burning natural gas has emissions which are more than 69% lower than burning the equivalent amount of coal. Further, there is no ash which needs disposal when the fuel is gas. McKibben says that the are gas leaks which make up the difference between the emissions from LNG and coal. As usual, however, McKibben just makes the allegation and provides no proof. Without a doubt, some natural gas does leak during each year; however, that is not a basis to just announce that the level of leaks will be high enough to outweigh the major and proven reduction in pollution from burning gas compared to coal.
The truth is that McKibben and his article are nothing more than propaganda, a dishonest pitch made in an attempt to scare people away from a positive economic development for this country. I do not know if McKibben has major financial interests in the high cost "green" energy fields. Right now, the advent of greater natural gas production has made wind turbines and solar energy panels complete losers. It makes no sense to pay more for unreliable wind energy produced by windmills that bash in the skulls of unsuspecting birds each year than to use natural gas produced right here in America at low cost. The real truth is that even for those true believers in global warming, sometimes reality has to win the battle.
Let's start at the beginning.
1. There would be millions of Americans who will benefit from this trade in LNG. First, there are the folks who own the land in Pennsylvania, West Virginia, New York, Oklahoma, Texas, Colorado and the other states where the gas will come from. These farmers, ranchers and other landowners get royalty payments which are usually around 12.5% of the total revenues obtained when the gas is sold. For each billion dollars of gas sold, there would be about 125 million dollars paid to hundreds of thousands of people across these states, hardly a special interest. Then there are the hundreds of thousands of people who will get jobs in the natural gas industry. The recent estimates are that in just Pennsylvania, close to 250,000 jobs have been created in this field. When all states are included, the number of jobs created due to the export of LNG is truly significant. Again, these jobs for regular Americans who are struggling in today's economy are hardly payoffs to special interests. Then you have the companies that will actually liquefy the natural gas and sell it abroad. The ones which have so far been approved and licensed for this trade are large public companies which are majority owned by public shareholders like pension funds and mutual funds. In other words, the profits earned from the LNG trade will go to the retirement of teachers, firemen, union workers, as well as individuals who have invested in the companies. Are these now some sort of special interest? I doubt it.
2. There will not be millions of Americans who will suffer from this trade. McKibben announces in his piece that by selling our natural gas to other countries, we will raise the price here and give away our competitive advantage in energy costs. That clearly means that McKibben does not understand this industry at all. American factories will still get their natural gas at the basic market price, just as is the case now. The Europeans and Japanese will have to pay more for the gas; the price to them will have to cover the cost of liquefying the gas, shipping it to its destination, and then regasifying the LNG. In other words, gas in Europe and Japan will still cost significantly more than it will here in the USA. It is true that the cost of gas in those countries will be reduced somewhat due to this process, but that will also result in hundreds of billions of dollars being sent by the foreign countries to the USA in payment for that gas. This huge influx of wealth to America will help the entire economy and will be of great benefit to the average American worker. It is the kind of income that will go to people of all income levels rather than just to the wealthy.
3. McKibben is wrong in his environmental analysis. His conclusion is that burning LNG from the USA in Europe has the same impact on global warming as the burning of coal mined on that continent. The claim is utter nonsense. While McKibben would never admit this, we have to start with the point that man-made global warming may not even exist. After all, temperatures have not risen for the last 15 years. There has been a big increase in carbon dioxide during that period, but the temperatures have just stood still. The warming that occurred prior to that time may be nothing more than the normal cycles of climate that the world has experienced for millions of years. Next, we also have to consider that burning natural gas has emissions which are more than 69% lower than burning the equivalent amount of coal. Further, there is no ash which needs disposal when the fuel is gas. McKibben says that the are gas leaks which make up the difference between the emissions from LNG and coal. As usual, however, McKibben just makes the allegation and provides no proof. Without a doubt, some natural gas does leak during each year; however, that is not a basis to just announce that the level of leaks will be high enough to outweigh the major and proven reduction in pollution from burning gas compared to coal.
The truth is that McKibben and his article are nothing more than propaganda, a dishonest pitch made in an attempt to scare people away from a positive economic development for this country. I do not know if McKibben has major financial interests in the high cost "green" energy fields. Right now, the advent of greater natural gas production has made wind turbines and solar energy panels complete losers. It makes no sense to pay more for unreliable wind energy produced by windmills that bash in the skulls of unsuspecting birds each year than to use natural gas produced right here in America at low cost. The real truth is that even for those true believers in global warming, sometimes reality has to win the battle.
No comments:
Post a Comment