Posted August 26, 2011
The State Department's third favorable environmental review of the proposed Keystone XL pipeline is a major step forward for the $7 billion project. Also making news heading into the weekend is a new assessment of the natural gas potential of the Marcellus Shale and more evidence of prosperity in energy producing North Dakota. Happy Friday:
State Department boosts Keystone XL - State's latest review repeats what its two previous reviews said: The 1,700-mile Keystone XL poses no serious environmental risk, either during construction or in operation. You can read the report's executive summary and check out scheduled public hearings here. State notes:
"In consultation with (federal pipeline regulators), DOS determined that incorporation of the Special Conditions would result in a Project that would have a degree of safety greater than any typically constructed domestic oil pipeline system under current regulations and a degree of safety along the entire length of the pipeline system that would be similar to that required in high consequence areas as defined in the regulations."
This is good news for America's energy future and its economy. The Keystone XL will deliver oil from Canadian oil sands regions in Alberta to U.S. refiners - projected at more than 800,000 barrels per day within a few years. It will create jobs - 10,000 U.S. jobs immediately, rising to 85,000 by 2020. API Refining Manager Cindy Schild:
"The nation's quintessential shovel-ready project is a step closer to reality. That's good news for tens of thousands of Americans who stand to find new jobs when this pipeline project is finally approved. If the State Department gives the final okay, hiring could begin immediately in hundreds of American companies in the Midwest and across the country."
Marcellus Shale's potential grows - The U.S. Geological Survey upped its assessment of the recoverable natural gas in this shale formation that runs beneath eight states from the 2 trillion cubic feet (tcf) reported in 2002 to 84 tcf, which is more than three years' worth of total U.S. gas demand at current levels. What's that, a 4,100-percent increase?
Then things got interesting. Some news outlets compared USGS' numbers with those previously reported by the U.S. Energy Information Administration (EIA). EIA's Marcellus projections were higher, so some reported that with the USGS report, the government was actually slashing its estimates. The obvious question: Why were two federal agencies' Marcellus numbers so out of whack with each other?
Basically, it was an apples-and-oranges comparison, which any fair analysis might have noted. USGS and EIA weren't exactly measuring the same things. The Washington Post's Brad Plumer had this:
"The USGS offered an estimate of undiscovered resources that can be recovered with current technology, whereas the EIA report looked at both 'active' and 'undeveloped' reserves together. 'Ours is additive to what's already in production,' explains (USGS' Brenda) Pierce."
Reason magazine science writer Ron Bailey sums up:
"The EIA has estimated that total U.S. natural gas reserves at 2,600 trillion cubic feet which, if true, implies that there is about 110-year supply of gas at the current rate of 23 trillion cubic feet annually. The new USGS figures cut the estimated reserves to just under 2,300 trillion cubic feet, which roughly suggests a 98-year supply of gas. The EIA is adjusting its Marcellus shale figures in line with the new USGS estimates. This is still far away from 'peak natural gas.'"
The other thing is the USGS number is just one of many that together form the whole cloth. Another credible source for natural gas reserve estimates is the Potential Gas Committee, a nonprofit organization of experienced experts in exploration, production and transportation, which increased its estimate of total U.S. natural gas reserves from 2,074 tcf in 2008 to 2,170 tcf in 2010. There's also Dr. Terry Engelder, a geologist at Penn State University and an expert in the Marcellus, who has the total reserves there at 489 tcf.
Bottom line: The Marcellus holds a lot of clean-burning natural gas, which is good news for consumers, people seeking work in Pennsylvania, Ohio and West Virginia (and someday, perhaps, New York).
North Dakota Grows High-End Taxpayers - Research by the Tax Foundation (h/t to Mark Perry's Carpe Diem blog) shows North Dakota leading the country in the percentage growth of taxpayers earning more than $200,000, minus the percentage growth of all taxpayers from 1999 to 2009.
It's a technical analysis, but it reflects growth in the number of wealthy taxpayers, which reflects ... what? Note other states in the top 10: 2. Alaska; 5. Oklahoma; 6. South Dakota; 7. Louisiana; 8. Wyoming; 9. West Virginia; 10. Montana. There are other reasons for growth in the number of wealthier taxpayers, but it's inescapable that eight of the top 10 states are energy producers. Good for the tax base, good for America's energy needs.
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.