NYT columnist: Gas really isn’t all that cheap

It’s about time somebody pointed out that gas, while cheaper than it’s been in the past few years, isn’t all that cheap, really. If you look at history.

New York Times business columnist David Leonhardt did just that, pointing out that the national average for regular unleaded — $2.03 per gallon — is “still more expensive than nearly anytime in the 1990s, after adjusting for general inflation. Over a 17-year stretch from the start of 1986 to the end of 2002, the real price of gas averaged just $1.87.”

Leonhardt notes that the era of cheap gas coincides with the “great wage slowdown.”

One of the surest ways to end the great wage slowdown would be for the United States to make sure it’s entering a new era of cheap energy. “It’s the proverbial tax cut,” says Daniel Yergin, vice chairman of the research firm IHS and author of a Pulitzer Prize-winning history of oil. If energy costs remain at current levels, it would put $180 billion into Americans’ pockets this year, according to Moody’s Analytics, equal to 1.2 percent of income and a higher share for lower-income households.

That’s why taking virtually every step to push oil costs even lower — “drill, baby, drill,” as the phrase goes — would make a lot of sense, so long as oil use did not have harmful side effects.

Ah, but it does have side effects. Leonhardt adds:

It leads to carbon emissions, which are altering the world’s climate. Last year was probably the planet’s hottest since modern records began in 1880, and the 15 hottest have all occurred since 1998. Oceans are rising, species are at risk and some types of severe storms, including blizzards, seem to be more common.

More oil production, then, involves enormous trade-offs: a healthier economy, at least in the short term, but a less healthy planet, with all of the political, ecological, health and economic downsides that come with it.

Leonhardt writes that it’s possible, in part, to retain the benefits of increased oil output without the drawbacks. Hydraulic fracturing is less carbon intensive than conventional oil drilling, although fracking comes with other issues. “Clean energy” offers a good solution, he says, “if it could become even cheaper.”

Democrats block Keystone XL bill in Senate

As expected, Senate Democrats prevented a bill authorizing construction of TransCanada’s Keystone XL pipeline from advancing in the Senate.

The fate of the pipeline still remains with the State Department, because the pipeline would cross from Canada through the United States.

President Obama already has made his feelings known, saying through a spokesman that he would veto any bill that emerged from Congress.

According to media reports, Senate Majority Leader Mitch McConnell moved to end debate on the bill, a version of which had already cleared the Republican-controlled House. But Republicans could only muster 53 votes for cloture, or an end to the debate, on two separate roll calls. Under parliamentary rules, 60 votes are needed for cloture.

The New York Times reported: “The move ensures that senators will continue to debate the bill — most likely for another week — before Republicans again try to bring the measure up for a final vote.”

The GOP had no doubt hoped for more Democrats. As Politico reported:

The legislation … on Monday lost a vote from one of its longtime backers, Sen. Jon Tester (D-Mont.) — now a member of party leadership as chief of the Democratic Senatorial Campaign Committee — but picked up a vote from Sen. Michael Bennet (D-Colo.), the former DSCC chairman who has not formally signed onto the pipeline bill.

Two other Democrats who have backed stripping Obama’s power to decide on a Keystone permit, Sens. Claire McCaskill and Mark Warner, missed the Monday vote.

“I’d like to see us decide Keystone and move on,” Sen. Heidi Heitkamp, one of the pro-Keystone Democrats who voted with the GOP to cut off debate, told reporters.

Keystone’s backers initially expected the pipeline votes would end this week. But Democratic anger over the majority leader’s move to close off the debate on their amendments last week has made the pipeline bill a power struggle, with Democrats pushing McConnell to continue the freewheeling energy debate on the floor that has delved into topics ranging from climate change to eminent domain.

 

Oil prices dip as blizzard strikes the Northeast

OPEC’s secretary-general, Abdullah al-Badri, said Monday that the great oil price-drop could be over, and that it could start to climb again soon.

“Now the prices are around $45-$50, and I think maybe they reached the bottom and will see some rebound very soon,” he told Reuters in London.

Al-Badri also warned that oil might spike to $200.

That may well occur in the future. But for now, the floor hasn’t been reached. Prices rallied briefly after al-Badri’s comments, but they settled down in Monday’s trading session. Brent, the international benchmark, fell 1.3 percent to $48.16. U.S., or West Texas Intermediate, fell 1 percent to $45.15, but narrowed after the restart of a refinery in Whiting, Indiana.

Some experts had anticipated movement in the markets following the death of Saudi King Abdullah last week. But his successor, half-brother Salman, pledged “continuity in energy and foreign policies on Friday and was quick to retain veteran oil minister Ali al-Naimi, sending a message aimed at calming a jittery oil market,” Reuters reported.

The massive blizzard in the Northeast affected crude prices: The anticipated storm caused prices of heating oil to rise, but jet fuel dropped, in anticipation of canceled flights.

As Reuters reported:

The blizzard will result in canceled flights, less driving and increased use of heating oil, creating mixed indicators for crude oil, Matt Smith, an analyst at Schneider Electric, said.

“We saw this with Hurricane Sandy,” Smith said.

GOP condemns White House proposal to add Alaska protections

Reaction is pouring in after President Obama over the weekend announced his administration was seeking to permanently protect the majority of the Alaskan National Wildlife Refuge — about 12 million of 19.8 million acres — from oil and gas exploration.

The coastal plain in the refuge, home to about 200 species, as well as an estimated 10.3 billion barrels of oil (enough to satisfy U.S. consumption for about 18 months), has been “off-limits to development for years,” The Los Angeles Times writes. But:

… the White House move marks a new front in the long-running political and environmental battle over whether to authorize oil production in the refuge.

Only Congress can designate the area as protected wilderness. But even if lawmakers don’t support the measure, officials said, the Interior Department intends to continue barring oil and gas development — along with road-building and almost every other form of development.

As The Washington Post put it:

The move marks the latest instance of Obama’s aggressive use of executive authority to advance his top policy priorities. While only Congress can create a wilderness area, once the federal government identifies a place for that designation, it receives the highest level of protection until Congress acts or a future administration adopts a different approach.

Obama, in a video released Sunday, said: “Alaska’s National Wildlife Refuge is an incredible place — pristine, undisturbed. It supports caribou and polar bears, all manner of marine life, countless species of birds and fish, and for centuries it supported many Alaska Native communities. But it’s very fragile.”

Environmentalists praised the announcement, but Republican lawmakers weren’t happy, particularly Alaska Sen. Lisa Murkowski, who leads the Senate Energy and Natural Resources Committee. A statement on the senator’s website was titled “Obama, Jewell Declaring War on Alaska’s Future,” referring to Interior Secretary Sally Jewell.

Murkowski said:

“What’s coming is a stunning attack on our sovereignty and our ability to develop a strong economy that allows us, our children and our grandchildren to thrive. It’s clear this administration does not care about us, and sees us as nothing but a territory. The promises made to us at statehood, and since then, mean absolutely nothing to them. I cannot understand why this administration is willing to negotiate with Iran, but not Alaska. But we will not be run over like this. We will fight back with every resource at our disposal.”

The White House called her reaction overblown.

 

The Atlantic: Why the U.S. still needs Saudi Arabia

The Atlantic’s Matt Schiavenza has some pointed commentary on the longtime U.S.-Saudi alliance, arguing that the United States needs the Middle East kingdom “more than ever.”

Following the death of King Abdullah last week at age 90, following a lung infection, President Obama cited his “enduring contribution to the search for peace” in the region. Secretary of State John Kerry said he was a “man of wisdom and vision.”

Schiavenza then lists the ways in which Saudi policy undermines the American praise, including the lack of rights of women, and the case of blogger Raif Badawi, who was sentenced to 1,000 lashes and 10 years in prison for defending atheism.

Schiavenza writes:

Contrary to President Obama’s statement, Saudi Arabia’s role in brokering Middle Eastern peace has, at best, been unhelpful. King Abdullah bitterly opposed Washington’s support of pro-democracy protesters in Egypt and urged President Obama to use force to preserve Hosni Mubarak’s dictatorship. Since Abdel Fattah al-Sisi assumed the country’s leadership in 2013, Riyadh has helped finance his brutal suppression of the country’s Muslim Brotherhood. Saudi Arabia has also resisted the rise of Shia movements in the region out of fear that Iran, their main rival, will gain influence. When Shia protesters threatened the Sunni dictatorship in neighboring Bahrain, Saudi Arabia dispatched its military to suppress the uprising. Riyadh’s support of Syrian rebels, too, has backfired: Islamic State fighters have benefited from Saudi money and weapons.

The reason the United States continues to “put up with” Saudi Arabia, the writer contends, is oil. And despite ramped-up production in the U.S. shale-oil fields, the U.S. will continue to need Saudi oil. Currently there’s a glut that might worsen, since Abdullah’s successor, his half-brother Salman bin Abdul Aziz, appears unlikely to reduce oil production to stem the drop in price. Right now the U.S. produces about 9 million barrels of oil a day, comparable with Saudi output.

But the kingdom, which is the leading oil-producer in OPEC (which controls 40 percent of the world’s oil supply), is “well-positioned to survive a sustained drop in the price of oil,” Schiavenza writes, adding:

Riyadh generally needs oil to trade at $80 a barrel in order to balance its budget. But with $750 billion stashed away in reserve, the kingdom faces little pressure to reduce supply and raise the price. In addition, Saudi Arabia and fellow OPEC members Kuwait and the United Arab Emirates have proved reserves of 460 billion barrels. The United States, by contrast, has proved reserves of just 10 billion—and the U.S. Energy Information Agency forecasts that American shale oil production will plateau in 2020.

Puncturing the myth of 14X improvement in biofuels

Jim Lane was demonstrating some of his usual skepticism when he took on the story of a 14X improvement in the production of biofuels last week.

The story began with an item in Renewable Energy World, Green Car Congress and several other publications. The National Renewable Energy Laboratory published a report on its website stating that a bacterium had been discovered that processed biofuel from cellulose material at 14 times the rate of previously used bacteria.

Lane starts with an apology as to why Biofuels Digest didn’t get too excited about this announcement.

You may have wondered why the discovery was not also hailed in The Digest this week, and on the topic there’s good and bad news, friends.

The good news is that such an enzyme exists, though it doesn’t quite perform at the 14X level and isn’t out of the lab yet. The bad news is that the research that inspired the article actually was published in Science in 2013. Sorry, folks, not a new breakthrough.

First, Lane takes these publications to school for a little elementary arithmetic. The articles said that the new microbe “revealed twice the total sugar conversion in two days” that the present microbe “usually produced in seven.” But as Lane points out, that means it’s 7X as effective, not 14X. But “What does it matter,” he says. “Two of the stubborn problems in converting cellulose to fuels have been the cost of enzymes and the capex [capital expenditures] associated with the technology.” Neither problem is really addressed by the new enzyme.

Actually, the new enzyme – caldicellulosedisruptor bescii, which was discovered in a region of hot springs and land on Russia’s Kamchatka Peninsula — does hold some promise. Because they are so tolerant of heat (up to 193 degrees F), they promise to eliminate the pretreatment of cellulosic material, which would mean a huge saving in processing. Almost half the cost of reducing cellulosic material to sugars comes in pre-treatment. The trick will be getting the process that has been demonstrated in the lab to be repeated on a commercial scale. “Let’s locate all of this where it is, which is in the lab. Which is about 10 years from appearing in an at-scale process somewhere, you average out the timelines for bringing processes based on other microbes to full commercial scale.”

Which is to say, no one has shown that these results can be achieved in a 500 liter fermenter, much less a million liter monster as we see in commercial scale operations. There’s going to be, lime, zero knowledge at this stage about the behavior of these microbes in a fermenter under the incomplete mixing conditions that almost invariably are found at scale.

So, let’s keep the risks in mind, and the timelines, too – even as we hail a genuinely promising and fascinating scientific advance.

Lane has some quiet optimism about the process itself. He isn’t as entirely cynical as he would let on.

There has indeed been some research showing that the CelA bacteria can handle large quantities of cellulosic material in a commercial setting. As BioDigest reported last year, “a group of researchers led by the University of Georgia’s Mike Adams demonstrated that caldicellolusiruptor could “without pretreatment, break down biomass, including lignin, and release sugars for biofuels and chemicals production.” The group wrote in Energy & Environmental Science that “the majority (85%) of insoluble switchgrass biomass that had not been previously chemically treated was degraded at 78 °C by the anaerobic bacterium Caldicellulosiruptor bescii.)”

Digesting switchgrass and other cellulosic material into sugars — which can easily be converted to ethanol — would be a huge advance, even if it took ten years to bring into play. Even if it’s not the miracle that some have touted, it’s a huge advance. The question of which publication broke the story first will fade, and we’ll soon know if the new bacteria really can help us turn seemingly intractable vegetable material into a useful fuel.

Americans used to ride cheap trolleys. Then we burned them

One of the many fascinating storylines in the documentary PUMP (which is now available for download on iTunes) is the yarn about how several companies got together to take on a common enemy: popular, affordable electric trains and trolleys that criss-crossed the nation early in the 20th century. That’s a very different country than we live in today, when the automobile is as ingrained in our culture and economy as ever. As former Shell Oil president John Hofmeister puts it in the film:

“We live in a society in which we rely on personal mobility as the primary means of transportation. And there’s no public transportation system to rely upon in the United States of America as an alternative to high prices or shortages.”

Narrator Jason Bateman follows up:

“America wasn’t always without transportation choices. Once upon a time, we had the best and cheapest public transportation in the world.”

Bateman then gives way to an expert on this subject, Edwin Black, whose book Internal Combustion details the effort to target the trolleys. Black explains in PUMP:

“People loved the trolleys. They could hop off, they could hop on … all the trolleys ran on electricity. It was said that you could go from San Diego to New York City on a trolley just by transferring, transferring and transferring.”

In the 1930s and ’40s, five companies — Standard Oil, Mack Truck, Firestone, Phillips and General Motors — colluded to create a secret company that bought up all the trolley lines and passenger cars.

“… the rails were pulled up, the trolley cars themselves were burned in public bonfires [as seen in the photo above], and they replaced them with smelly, oil-consuming motor buses. Eventually, the federal government discovered that this was a conspiracy to subvert mass transit. All five corporations were indicted, they were tried, they were found guilty. A corporate conspiracy was responsible for destroying the trolleys in America.”

The reckoning was a little late, however. Back to Bateman:

“With cheap public electric transportation eliminated by oil and car companies, the vision of America’s future switched from rails to roads.”

That led to the interstate highway system, which only intensified our love affair with the automobile. A relationship that relies, essentially, on just one fuel type: gasoline. Of course, many of today’s municipal bus fleets run on compressed natural gas (CNG) or liquefied natural gas (LNG). And rail projects are often on the minds of planners. But getting away from gas-burning transport has been a difficult road, as anyone following the fight over California’s $68 billion high-speed rail project knows. To get a sense of how the story of oil’s dominance came to, and to see what you can do to end our addiction to it, watch PUMP. (Photo credit: Submarine Deluxe)

What good are economists, including oil and fuel economists?

RobertShillerNobel-Prize winning economist, Dr. Robert Shiller, is one of the top economists in the nation, actually, let’s make him an imperialist, in the world. He is best known, perhaps, as the co-creator of the S&P/Case Shiller Home Price Indices. His books on economic theory and issues populate many college classrooms and personal libraries, including mine. He is an impressive, smart and accomplished intellectual giant.

It’s tough, given Dr. Shiller’s pedigree, to even suggest a bit of criticism. But because I think it’s important to current policy debates concerning economic, energy and transportation fuel policies, I do want to take issue with his recent short piece in Project Syndicate (What Good Are Economists?). In it, he defends economists and their mistakes concerning economic forecasts.

Shiller seems oversensitive to the pervasive criticism of economists in the media and literature. Because of the esteem with which he deservedly is held, his somewhat-thin response may mute a needed dialogue concerning the weaknesses attributed by respected critics of the work of economists. Shiller admits they failed to warn the nation in advance of economic downturns as far back as 1920-1921. By implication, he also suggests that because of this fact economists did not have a major impact or may have even had a negative impact at the policy table and often gave up their places to business and political leaders. Certainly Dr. Lawrence Summers and Alan Greenspan have not escaped criticism for failing to predict both the recent recession and for instituting policies that may have exacerbated the recession itself.

Over the past several years, many Americans have been frustrated by the errors of omission and commission made by respected economists from America’s think tanks and its government institutions, like the EIA, concerning analyses, forecasts and predications of the price of oil and gas as well as, demand for and supply of fuel and the role alternative fuels have and will play in America’s future economy. Their numbers and analyses often seem like the “once a day” or maybe “once a month” variety. Many of you don’t remember the famous (now clearly seen as a sexist) joke by I believe Ilka Chase in the old Reader’s Digest that a “woman’s mind is cleaner than a man’s because she changes it so often.” The comment now fits many energy-related economists. Their minds may be cleaner than those of normal folks because, as seen in many of their energy and fuel forecasts, they change it so often. But by doing so, they present obstacles to government, congressional leaders, industry, academic and environmental officials anxious to develop sound energy and fuel policies and program initiatives.

Can you name — on more than one hand — the economists who predicted the recent significant decline of oil and gasoline prices? Can you find consensus among economists concerning oil and fuel prices in the future? Can you identify economists willing to go out on a limb and describe, other than in generalities, the causes of the current decline in prices? Put two economists in a room and you will get three or more different reasons, most resting on opinion and not on hard data. Paraphrasing, oh, yes, the reason(s) are (or is): the Saudi Kingdom and its unwillingness to limit production and desires to gain market share; another favorite: the American producer’s recent oil shale largess is too good to pass up by slowing down drilling significantly; and don’t forget: the rise of the value of the dollar and the fall off in travel mileages resulting from the global recession. For the politically susceptible and sometimes cynical economists, throw in the genius of American and Saudi foreign policy as a factor. They fail to sleep at night, believing the decline is the purposeful result of the State Department and/or their counterparts in the Kingdom. If you keep prices low, who does it hurt most…Russia, Iran and Venezuela, of course!

There are many theories concerning recent price declines but no real hard answers based on empirical evidence and factor analysis.

Energy and transportation fuel economists, at times, seem to practice art rather than science. Diverse methodologies used to forecast oil and gasoline prices; demand and supply are unable to easily manage or accommodate the likely involved complex economic, technical, geopolitical and behavioral factors. As a result, specific cause and effect relationships among and between independent and dependent variables concerning oil and gas trends are difficult to discern by expert and lay folks alike.

Understandably, American leaders often appear to value what they feel are the good artists among economists, particularly if they lend credence in their speeches and reports to their own views or ideological predilections. Shiller’s question about economists in his piece is not a difficult one to answer. He asks, “If they were unable to foresee something (the 2007-2009 financial crisis and recession) so important to people’s wellbeing, what good are they?”

The best in the profession have provided insights into the economy and what makes it tick or not tick. They, at times, have increased public understanding of corrective public and private-sector actions to right a weak economy. They, again at times, have helped lead to at least temporary consensus concerning options related to fiscal and monetary policy changes and the need for regulations of private sector activities. But Dr. Shiller goes too far when he offers a mea culpa for the profession by comparing its failure to predict economic trends to doctors who fail to predict disease. Doctors probably do suffer more than economists for their mistakes, particularly when their analyses result in increased rates of morbidity and mortality. At least economists can bury their errors in next week’s or next month’s studies or reports; many times doctors can escape their errors only by burying their patients. The article could have been a provocative and an important one, given Dr. Shiller’s justifiable stature. It might have stimulated self examination among some of the best and brightest if it had linked weaknesses in economic forecasts to proposals to strengthen the rigor of methodological approaches. Presently, the brief article regrettably reads as an excuse for professional deficiencies. Res ipsa loquitur.

Yellowstone River oil spill contaminates drinking water in Montana town

Residents of the town of Glendive, in eastern Montana, are being told not to drink or cook with water from the city’s supply after a weekend oil spill that send 50,000 gallons of crude into the Yellowstone River.

The river flows downstream from Yellowstone National Park, and the site of the spill is some 400 miles from the park’s entrance, along the border between Montana and Wyoming.

But Saturday’s spill — the equivalent of 1,200 barrels of oil extracted from the Bakken shale-rock formation in Montana and North Dakota — caused elevated levels of the cancer-causing compound benzene to turn up in the local water supply. Officials in the city of 6,000 are trucking in bottled water, and residents were warned not to use water out of the tap.

The Los Angeles Times quoted Glendive Mayor Jerry Jimison:

“It is an inconvenience for everyone in the community, no doubt. But we have truckloads of water being supplied, and the company has taken full responsibility, stepping up to the plate and helping bring everything back to normal.”

The pipeline is owned by Bridger Pipeline, a subsidiary of a Wyoming company called True Cos. That company said in a statement that a 12-inch section of the Poplar Pipeline had breached Saturday at 10 a.m. The company said the pipeline was shut down within an hour of the leak, and that “all relevant local, state and federal authorities” had been notified. More than 50 people were working to clean up the spill, the Times reported.

“Our primary concern is to minimize the environmental impact of the release and keep our responders safe as we clean up from this unfortunate incident,” Tad True, vice president of Bridger Pipeline, said in the statement.

Montana’s Department of Environmental Quality said the city draws its drinking water supply from an intake structure about 14 feet beneath the surface of the river, about 7 river miles downstream from the breach.

“Product sheen has been observed on the river almost to Sidney,” about 50 miles downriver from Glendive, the agency said. “No other community water supplies draw from the Yellowstone River downstream of the release in Montana.”

As National Geographic noted, this is the “second sizable oil spill” on the Yellowstone River in the last four years:

Another spill into Yellowstone River occurred 235 miles southwest of Glendive in July 2011, when an ExxonMobil pipeline broke near Laurel, Montana, and released 63,000 gallons of oil that washed up along an 85-mile stretch of riverbank.

NatGeo says that after the latest spill, “initial water tests showed no evidence of oil, but residents soon complained that their tap water had an unusual odor. The city’s water advisory was issued late Monday. The Times says benzene has a sweet odor and can be hazardous over time.

Fracking offers hope

I’ve just finished The Frackers, the excellent history of how the United States became the world’s leading developer of fossil fuels, by former Wall Street Journal reporter Gregory Zuckerman.

There are three lessons that can be taken away from this history, all of which relate to the development of alternative sources of energy:

  • The government had very little to do with the development of fracking. It was all done by wildcatters who operated far outside major institutions.
  • The founders of these methods didn’t necessarily get permanently rich. All have done well initially but have been undone by their very success, producing a superabundance of gas and oil that has driven down prices to the point where producers are overextended.
  • The maverick wildcatters who have opened up our gas and oil resources are not necessarily opposed to alternative sources of energy. In fact, they have often become the biggest promoters of wind, solar and alternative fuels for our transport sector.

Let’s examine those myths one by one:

The government should get credit for the breakthroughs. Proponents of big government often try to promote the idea that the fracking revolution never would have occurred without the help of the government. They even argue that government was responsible for the fracking initiative. Three years ago, Ted Norhaus and Michael Shellenberger of the Breakthrough Institute published a piece in The Washington Post in which they practically argued that fracking had been invented in the laboratories of the Department of Energy. George Mitchell, who spent 40 years developing fracking, had simply borrowed a few ideas that the DOE had designed.

Read the opening chapter on Mitchell in The Frackers, and you’ll hardly find one reference to the Department of Energy or government help. At one point the DOE contributed a few million dollars to an experiment that Mitchell had designed, but that was it. The rest of the story tells of Mitchell’s fascination with trying to suck oil out of shale rock, and how he nearly bankrupted his moderately successful oil company in the effort. He had no luck trying to convince the major oil companies that shale could be accessed. At one point, Chevron came very close to fracking the Barnett Shale, where Mitchell had his first breakthrough, but the company gave up on the effort. Harold Hamm experienced the same frustrations in the Bakken, where he alone believed there were vast reserves of oil but couldn’t get anyone to support him, until he finally made a breakthrough. The government had nothing to do with it.

Fracking wildcatters always get rich. The great irony for many of these pioneers is that they are often undone by their own success. Aubrey McClendon built Chesapeake Gas into the nation’s second-largest producer of natural gas but was forced to give up his company because the success of his fracking had driven the price of gas so low that he was overextended. The same thing happened to Tom Ward, an early associate of McClendon’s who had built his own company, SandRidge, based on fracking. Ward was forced out of his ownership by the board of directors. Harold Hamm has been having the same trouble in The Bakken since the superabundance of oil has forced the price down. Developing a new source of energy doesn’t necessarily mean you’re going to be permanently rich.

The developers of new ways to access fossil fuels are opposed to other alternatives. Because they have been so successful in reviving production of oil and gas, the assumption has been that the Frackers are wedded to fossil fuels and are undercutting alternatives. This is not true. The primary motive of all these innovators has been to make America more energy-independent and reduce our reliance on foreign oil. All of them see the development of fossil fuels as only a temporary step, and acknowledge that we must ultimately find some other sources of energy. T. Boone Pickens, the dean of oil magnates, put forth a plan that would try to get the electrical sector to rely on wind so that natural gas could be moved over to the transport sector to replace oil. His Clean Energy Fuels Corporation had some success in building a “natural gas highway” that substitutes compressed natural gas for diesel fuel in long-haul tractor trailers. Both Mitchell and Hamm have been exploring alternative energy, and they’re funding efforts to try to substitute renewables for fossil fuels, both domestic and imported.

As Zuckerman concludes at the end of The Frackers:

The great leap forward should have involved alternative energy, not oil and gas. The U.S. government allocated over $150 billion to green initiatives between 2009 and 2014. … There’s little to show for the investments, however. … Instead a group of frackers, relying on market cues rather than government direction, achieved dramatic advances by focusing on fossil fuels, of all things. It’s a stark reminder that breakthroughs in the business world usually are achieved through incremental advances, often in the face of deep skepticism, rather than government inspired eureka moments.

It’s a lesson worth keeping in mind as we pursue alternative fuels to substitute for foreign oil.