In this week’s episode of R-Squared Energy TV, I answer questions on palm oil and hydraulic fracturing (fracking).

Some of the topics discussed are:

• The EPA decision to exclude palm oil from qualifying as renewable biomass under RFS2
• The Chinese influence over the palm oil trade
• The issue of trade-offs in our energy choices
• Agendas in the fracking debate

After I recorded the clip, I did some research on exactly how the EPA treats palm oil (I should have done it before recording the clip), and they say that “oil palm plantations would have to meet the criteria for existing agricultural land in order for their fruit and crop residue to qualify as renewable biomass under RFS2.” I am not sure about the requirements for qualifying as existing agricultural land, but that was my point in the video: There needs to be a mechanism to allow palm oil from previously existing plantations to qualify. And it sounds like there is such a mechanism.

Readers who have specific questions can send them to ask [at] consumerenergyreport [dot] com or leave the question after this post (at the original source). Consider subscribing to our YouTube channel where you’ll be able to view past and future videos.

Link to Original Article: R-Squared Energy TV: Episode 9 – Energy Tradeoffs with Palm Oil & Fracking

By Robert Rapier

Question: What do President Barack Obama and ex-President Jimmy Carter have in common?

Answer: Both presided over strong increases in domestic oil production that were a result of decisions made before they took office, as I explain in this post.

In my recent post The Oilman in the White House, I posted the following graphic:

Is There More to this Graphic than Meets the Eye?

The purpose of the graphic was to get people to think about why oil production had behaved in this manner over the past decade. A lot of people took the bait, and asked how I could possibly believe that President Obama was responsible for this rise in production given his apparent hostility toward the oil industry. Some people on the other hand offered up the real reason for the production increases. One pointed out that the above graph could really be broken into three parts: Falling production until 2005, flat production from 2005 until 2009 as some new projects began to come online, and an increase from 2009.

This was one of the themes I was working on for my upcoming book, and I felt like it was worth discussing. I was looking back over the past eight presidential administrations, and it was pretty clear that what happens today in the energy markets is a result of decisions that were made 4-8 years in the past. For instance, the ethanol production gains in 2010 were not a function of Barack Obama’s energy policies; they were a result of energy legislation passed in 2005 and expanded in 2007.

When Jimmy Carter was in office, U.S. oil production rose for the first time in 7 years. The graphic below tells the tale, and is a pretty good analog for the behavior of U.S. oil production since President Obama has been in office.

The reason oil production rose under Jimmy Carter was because in 1973 President Nixon pushed through the Trans-Alaska Pipeline Authorization Act which cleared away legal challenges from environmentalists seeking to stop construction of the Trans-Alaska Pipeline. That pipeline started production in 1977, during President Carter’s first year in office, and as a result oil production rose for the first 2 years of his term.

Likewise, the reason that oil production has risen under President Obama is due to events that happened years earlier. In this case, it wasn’t some grand initiative that President Bush passed, rather it was years of steadily increasing oil prices that caused oil companies to approve a number of new projects that had marginal economics at lower oil prices. But these projects take some years to build, and as in the case of the Alaska Pipeline, decisions that were made 4-6 years earlier benefited President Obama with increased domestic oil production.

The reason I wanted to call attention to this is that I knew it would be an campaign issue in this election year, and indeed stories are beginning to surface in which President Obama touts his record on oil production:

Obama touts record U.S. oil and gas production in wake of pipeline rejection

Rejecting both the Republican push for an accelerated Keystone XL oil pipeline and the GOP argument that he doesn’t care about jobs, President Barack Obama Wednesday touted his record of increased domestic oil and gas production.

“Under my administration, domestic oil and natural gas production is up, while imports of foreign oil are down,” Obama said, adding that trend will continue “in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment.”

Of course this situation isn’t unique to energy policy; one president’s policies often benefit or handicap the following administration. My intention is to raise awareness on this issue, so people understand the big picture as the energy policy debates play out this year. The current increases in oil production have little to do with Obama or Bush policies, but are simply a response to years of climbing oil prices.

But that cuts both ways. This is also the reason I have defended President Obama against criticisms that his decisions have caused gasoline prices to rise. The decisions he makes in this administration may ultimately impact gas prices, but due to the lag time they won’t impact gasoline prices for years. If President Obama is elected to a second term — as I expect that he will be — then he may begin to reap the outcome of his decisions by the middle of his second term. So his decisions today are certainly relevant for the future, and in 4 years he will deserve his share of the credit or blame for the status of the energy markets in the U.S.

Link to Original Article: Is Rising Oil Production a Result of President Obama’s Policies?

By Robert Rapier

In this week’s episode of R-Squared Energy TV, I give a short presentation on the pros and cons of using biomass for energy. People tend to have strong feelings on this topic in one way or another, and I will explore a bit of the reason for the controversy.

Some of the topics discussed are:

• Can energy from biomass replace oil?
• Can energy from biomass be sustainable?
• What are the risks of using biomass for energy?

Readers who have specific questions can send them to ask [at] consumerenergyreport [dot] com or leave the question after this post (at the original source). Consider subscribing to our YouTube channel where you’ll be able to view past and future videos.

Link to Original Article: R-Squared Energy TV: Episode 8 – Biomass Pros and Cons

By Robert Rapier

With the recently announced foreclosure of Vinod Khosla venture Range Fuels, followed by the fire sale of Range Fuels’ assets to Vinod Khosla venture LanzaTech, I have been getting a lot of calls from reporters wanting to discuss exactly what happened here. After all, well over $300 million was invested into Range Fuels — including tens of millions of taxpayer dollars — and what resulted were assets that were ultimately bought by LanzaTech for about $5 million.

Two articles were published over the weekend by journalists I spoke with last week:

Georgia failure not the only ethanol misadventure

Range Fuels fiasco: Finding renewal energy in Georgia forests didn’t work out

This quote caught my eye from one of the articles:

“These, quote, venture capitalists are basically venture socialists,” said Kenneth Green, a resident scholar at the American Enterprise Institute, a conservative think tank in Washington. “They’re getting large amounts of research money and loan guarantees to build pilot plants and other projects. They’re looking to socialize the costs of their efforts, but keep private the profits.”

I suppose that is an apt way to put it. These venture capitalists have found that they can defray their risks with tax dollars — and thus subject taxpayers to the risks from their projects — while they reap any potential rewards. As Vinod Khosla recently boasted, he has made a billion dollars by taking some of his ventures public, and the valuations of these companies are at least in part based on the government grants and loans they have received. But as I noted in one of the articles, none of the companies are actually producing fuel commercially. That is the true test of success from my perspective. Ten years from now it won’t matter to very many people if Khosla made a billion dollars for his investors if none of the companies were successful at producing fuel that is competitive with oil.

Khosla believes he should be applauded for what he is doing:

“Range’s original formulation may not have been successful, but such risk-taking deserves applause, not derision,” Khosla, who helped start Sun Microsystems, wrote. “In the end, success is never assured.”

I would say that sort of depends on the nature of the risks, don’t you think? In this case, the risks were substantial from my point of view, and poorly understood (and not at all articulated) by many who pushed this project. Add the fact that you risked my money and damaged the credibility of the renewable fuels industry, and I believe I will withhold my applause. Personally, I think taxpayers deserve to be paid back before any project associated with any of the Range Fuels backers is eligible for any more federal funds.

Of course as I have argued before, I would change this system up anyway so the risks from these projects are pushed back to the private sector — where they belong. If we started providing rewards for those who deliver on their promises instead of those who generate the most publicity in making them, these sorts of fiascoes wouldn’t be a big deal. Businesses fail all the time. But if they are being funded by private investors, then that’s just business.

Link to Original Article: Venture Socialism?

By Robert Rapier

In the first episode of R-Squared Energy TV for 2012, I give a short presentation on global warming. I believe there are a number of misconceptions around the U.S. contribution to greenhouse gas emissions, and I provide some graphics that may surprise some viewers.

Some of the topics discussed are:

• What do I think about global warming?
• Why do I feel that it is mostly out of the hands of the U.S.?
• Why do I feel that it will be very hard to rein in emissions in developing countries?

I realize that the sound quality on the video needs to be improved, and I am working on that. It isn’t simply a microphone issue, or I would have already resolved it. But I am working on a fix, and will probably eventually replace some of these videos with versions that have better quality sound.

Readers who have specific questions can send them to ask [at] consumerenergyreport [dot] com or leave the question after this post (at the original source). Consider subscribing to our YouTube channel where you’ll be able to view past and future videos.

Link to Original Article: R-Squared Energy TV: Episode 7 – The Carbon Emissions Quandary

By Robert Rapier

One of my Top 10 Energy Stories of 2011 was the fact that the U.S. had become a net exporter of finished petroleum products such as diesel and gasoline. In fact, because gasoline and diesel prices were so high, U.S. fuel exports were valued at $88 billion, which made them the top value export in 2011 for the first time ever:

Measured in dollars, the nation is on pace this year to ship more gasoline, diesel, and jet fuel than any other single export, according to U.S. Census data going back to 1990. It will also be the first year in more than 60 that America has been a net exporter of these fuels.

Just how big of a shift is this? A decade ago, fuel wasn’t even among the top 25 exports. And for the last five years, America’s top export was aircraft.

This news did not sit well with some people, who argued that those exports could have been better used in the U.S. I read numerous comments from people angry that we are exporting fuel. In fact, one of the arguments against the Keystone Pipeline is that the fuel could end up being exported after it is refined.

I don’t think the people who are making these arguments have thought this through very well.

Consider the situation. Gasoline demand in the U.S. has fallen for several years via a combination of high prices killing off demand and the escalating ethanol mandate. Refiners can respond by shutting down more refineries and laying off workers, or they can seek other markets for their product.

Look at what is happening with gasoline exports. 60% of the gasoline that is being exported is going to Mexico (a lower portion of distillates goes to Mexico as shown in the graph, but the bulk still goes to Central and South America), and most of the rest is going to Canada, Ecuador, and Brazil — countries that we import oil from. So we are importing oil from Mexico — the source of over 10% of our oil imports — and turning around and exporting back to them the higher value finished products. It creates jobs and tax revenue here in the U.S. That sounds like a bad deal for Mexico and a good deal for the U.S. So I don’t understand why people are upset. We could choose to stop selling gasoline to Mexico, in which case we could import less oil from them. But since gasoline is worth more than oil, that doesn’t seem like a very good business proposition.

However, I do want to make clear that I don’t believe that any domestically produced fuel that is benefiting from any sort of production incentives (i.e., tax benefits) should be allowed to be exported. This was my objection to reports of ethanol exports last year, because some were reportedly receiving the U.S. tax credit and exporting that ethanol. Since the ethanol tax credit has expired, I have no problem with the ethanol industry exporting ethanol that they can’t sell in the U.S. But tax credits that are designed for domestic production — petroleum or ethanol — should remain in the country for the benefit of those who paid those taxes.

Link to Original Article: What’s So Bad About Exporting Gasoline?

By Robert Rapier

No, I am not talking about George W. Bush. I just finished the chapter on politics for my book, and I created a number of graphics to show the behavior of oil prices, production, imports, and consumption through the last eight presidential administrations. Here is one of the more counter-intuitive graphics that you will ever come across:

Is There More to this Graphic than Meets the Eye?

During the eight years of the Bush Administration, annual domestic oil production fell every year (I have a graphic in the book that makes this even clearer than the one above). During the first three years of the Obama Administration, domestic oil production has gone up every year. In the book I put forward the reasons behind this, but I am curious as to what readers think. Why did domestic oil production increase under Obama when it fell under Bush, and should Obama get credit for this? I think there are two primary reasons behind this, but I will leave it to readers to discuss.

Link to Original Article: The Oilman in the White House

By Robert Rapier

Happy New Year everyone! I should be back on a regular posting schedule in about two weeks, and should have a new episode of R-Squared Energy TV up next week. For now, I offer the following timely guest post from OilPrice.com.

—————————

War Imminent in Straits of Hormuz? $200 a Barrel Oil?

The pieces and policies for potential conflict in the Persian Gulf are seemingly drawing inexorably together.

Since 24 December the Iranian Navy has been holding its ten-day Velayat 90 naval exercises, covering an area in the Arabian Sea stretching from east of the Strait of Hormuz entrance to the Persian Gulf to the Gulf of Aden. The day the maneuvers opened Iranian Navy Commander Rear Admiral Habibollah Sayyari told a press conference that the exercises were intended to show “Iran’s military prowess and defense capabilities in international waters, convey a message of peace and friendship to regional countries, and test the newest military equipment.” The exercise is Iran’s first naval training drill since May 2010, when the country held its Velayat 89 naval maneuvers in the same area. Velayat 90 is the largest naval exercise the country has ever held.

The participating Iranian forces have been divided into two groups, blue and orange, with the blue group representing Iranian forces and orange the enemy. Velayat 90 is involving the full panoply of Iranian naval force, with destroyers, missile boats, logistical support ships, hovercraft, aircraft, drones and advanced coastal missiles and torpedoes all being deployed. Tactics include mine-laying exercises and preparations for chemical attack. Iranian naval commandos, marines and divers are also participating.

The exercises have put Iranian warships in close proximity to vessels of the United States Fifth Fleet, based in Bahrain, which patrols some of the same waters, including the Strait of Hormuz, a 21 mile-wide waterway at its narrowest point. Roughly 40 percent of the world’s oil tanker shipments transit the strait daily, carrying 15.5 million barrels of Saudi, Iraqi, Iranian, Kuwaiti, Bahraini, Qatari and United Arab Emirates crude oil, leading the United States Energy Information Administration to label the Strait of Hormuz “the world’s most important oil chokepoint.”

In light of Iran’s recent capture of an advanced CIA RQ-170 Sentinel drone earlier this month, Iranian Navy Rear Admiral Seyed Mahmoud Moussavi noted that the Iranian Velayat 90 forces also conducted electronic warfare tests, using modern Iranian-made electronic jamming equipment to disrupt enemy radar and contact systems. Further tweaking Uncle Sam’s nose, Moussavi added that Iranian Navy drones involved in Velayat 90 conducted successful patrolling and surveillance operations.

Thousands of miles to the west, adding oil to the fire, President Obama is preparing to sign legislation that, if fully enforced, could impose harsh penalties on all customers for Iranian oil, with the explicit aim of severely impeding Iran’s ability to sell it.

How serious are the Iranians about the proposed sanctions and possible attack over its civilian nuclear program and what can they deploy if push comes to shove? According to the International Institute for Strategic Studies’ The Military Balance 2011, Iran has 23 submarines, 100+ “coastal and combat” patrol craft, 5 mine warfare and anti-mine craft, 13 amphibious landing vessels and 26 “logistics and support” ships. Add to that the fact that Iran has emphasized that it has developed indigenous “asymmetrical warfare” naval doctrines, and it is anything but clear what form Iran’s naval response to sanctions or attack could take. The only certainty is that it is unlikely to resemble anything taught at the U.S. Naval Academy.

The proposed Obama administration energy sanctions heighten the risk of confrontation and carry the possibility of immense economic disruption from soaring oil prices, given the unpredictability of the Iranian response. Addressing the possibility of tightened oil sanctions Iran’s first vice president Mohammad-Reza Rahimi on 27 December said, “If they impose sanctions on Iran’s oil exports, then even one drop of oil cannot flow from the Strait of Hormuz.”

Iran has earlier warned that if either the U.S. or Israel attack, it will target 32 American bases in the Middle East and close the Strait of Hormuz. On 28 December Iranian Navy commander Rear Admiral Habibollah Sayyari observed, “Closing the Strait of Hormuz for the armed forces of the Islamic Republic of Iran is very easy. It is a capability that has been built from the outset into our naval forces’ abilities.”

But adding an apparent olive branch Sayyari added, “But today we are not in the Hormuz Strait. We are in the Sea of Oman and we do not need to close the Hormuz Strait. Today we are just dealing with the Sea of Oman. Therefore, we can control it from right here and this is one of our prime abilities for such vital straits and our abilities are far, far more than they think.”

There are dim lights at the end of the seemingly darker and darker tunnel. The proposed sanctions legislation allows Obama to waive sanctions if they cause the price of oil to rise or threaten national security.

Furthermore, there is the wild card of Iran’s oil customers, the most prominent of which is China, which would hardly be inclined to go along with increased sanctions.

But one thing should be clear in Washington – however odious the U.S. government might find Iran’s mullahcracy, it is most unlikely to cave in to either economic or military intimidation that would threaten the nation’s existence, and if backed up against the wall with no way out, would just as likely go for broke and use every weapon at its disposal to defend itself. Given their evident cyber abilities in hacking the RQ-170 Sentinel drone and their announcement of an indigenous naval doctrine, a “cakewalk” victory with “mission accomplished” declared within a few short weeks seems anything but assured, particularly as it would extend the military arc of crisis from Iraq through Iran to Afghanistan, a potential shambolic military quagmire beyond Washington’s, NATO’s and Tel Aviv’s resources to quell.

It is worth remembering that chess was played in Sassanid Iran 1,400 years ago, where it was known as “chatrang.” What is occurring now off the Persian Gulf is a diplomatic and military game of chess, with global implications.

Washington’s concept of squeezing a country’s government by interfering with its energy policies has a dolorous history seven decades old.

When Japan invaded Vichy French-ruled southern Indo-China in July 1941 the U.S. demanded Japan withdraw. In addition, on 1 August the U.S., Japan’s biggest oil supplier at the time, imposed an oil embargo on the country.

Pearl Harbor occurred less than four months later.

Source: http://oilprice.com/Energy/Oil-Prices/War-Imminent-in-Straits-of-Hormuz-$200-a-Barrel-Oil.html

By John C.K. Daly of http://oilprice.com

Most regular readers are aware that I am writing a book. The title of the book is Power Plays: Energy Options in the Age of Peak Oil. While I have contributed several chapters to books in the past, this is my first full book, and I only recently learned that the publication process goes much faster than I had imagined. I signed the book contract in August 2011, and we were targeting completion of the book by year-end 2011. My assumption was that it would probably take months to get final edits, artwork, etc. completed and that it might go on sale during the second half of 2012. But, I wouldn’t have been surprised to learn that it wouldn’t be available until 2013.

However, I was recently surprise to learned that the book is already for sale at a number of outlets, including Amazon, and that release is scheduled for March 15th, 2012. So I am feeling the pressure at this point. I have to turn in the final chapters and edits by January 15th. That means I have 2 weeks left to make adjustments. I still have to write three chapters, but a lot of that work is done. The book is supposed to be 250 pages, and I have about 180 written. But nothing is set in stone until January 15th.

What I would like to do is share my thoughts with readers and request some feedback and suggestions. The main thing is that I don’t want to overlook something major. I would also like to hear what readers would like to see in a book on energy. Essentially, the goal of the book is to provide essential information for people from zero knowledge about energy to those who are fairly sophisticated in their views on energy, but presented in a (mostly) non-technical manner. I also want to press hard for changes in our energy policy so that we can be better prepared for the difficulties that I believe await us. Scattered throughout the book are facts that may not be commonly known, and sidebars that cover a number of controversial topics. My goal is that everyone will learn things that they did not know, and I can safely say that has been the case for me as I have written the book.

Below is the Table of Contents as things currently stand, followed by a short synopsis of each chapter. The final order of the chapters may be different than depicted below, and I may even decide to add or substitute a chapter depending on the feedback I get here.

Chapter 01 – Overview

This chapter is basically an explanation of why energy is important in our lives, and gives a brief summary of topics such as “Energy Misconceptions” and “Energy Politics.” I also lay out some questions that the book will answer.

Chapter 02 – Fossil Fuels and Nuclear Power

This chapter covers the history of oil, coal, natural gas, and nuclear power, and discusses countries that produce the most and that use the most.

Chapter 03 – Renewables

Similar to the previous chapter, except covering biomass, wind, solar power, hydropower, and geothermal power.

Chapter 04 – Energy Production

Discusses how the major forms of energy are produced.

Chapter 05 – Climate Change

I go over the science behind climate change, and look at the challenging prospects for reining in carbon emissions.

Chapter 06 – Peak Oil

I cover what peak oil is, the misconceptions behind peak oil, and the threat it poses to modern civilization.

Chapter 07 – Nuclear

This looks at the future of nuclear power, with an emphasis on the ramifications of the Fukushima Daiichi nuclear disaster.

Chapter 08 – Threats

Here I cover some of the major threats to energy security besides peak oil. I write about OPEC, emerging countries, and the implications of declining EROEI. I also cover the threat posed by oil choke-points, which is something that is presently in the news as Iran threatens to shut down the Straight of Hormuz.

Chapter 09 – Better Energy Policies

Here I focus on several ideas that will help move countries away from dependence on imported oil – and ultimately fossil fuels in general – while also making sure supplies are adequate during the transition. I talk about fossil fuel taxes, drilling proposals that fund alternative energy and mass transit, and the need for an Open Fuel Standard.

Chapter 10 – Due Diligence

This chapter explains how to sort out hype from reality, particularly when dealing with an alternative energy technology.

Chapter 11 – The Race to Replace Oil

This chapter is not yet written, but will cover many of the contenders to replace oil. I plan to look at methanol, ethanol, mixed alcohols, DME, and probably fuel from algae.

Chapter 12 – Corn Ethanol: Past, Present, and Future

I cover the history of corn ethanol policies in the U.S., detailing what worked and what needs to be improved. I talk about the implications of the blend wall and how it is impacting the industry.

Chapter 13 – The Role of Biomass

This chapter is not yet written, and I may decide that this material is adequately covered in other chapters. This one is a candidate for substitution.

Chapter 14 – Energy and Politics

This chapter covers the history of energy policy in the U.S. over the past four decades, and why that has resulted in such a high level of dependence on imported oil.

Chapter 15 – The Road Ahead

This chapter isn’t written, but will be my assessment of what lies ahead and which pathways offer the most promise for mitigating the energy crunch.

So there you have it. What does it look like I am missing, and what suggestions do you have? What messages do you think is important to convey to the general public?

Besides editing already submitted chapters, I need to write about 4 pages a day for the next three weeks. So there is still plenty of time to influence the final version. R-Squared readers will naturally be acknowledged in the book for reader’s contributions. Thanks in advance to those willing to offer suggestions.

Link to Original Article: Soliciting Reader Feedback for Power Plays

By Robert Rapier

Here are my choices for the Top 10 energy related stories of 2011. Don’t get too hung up on the relative rankings. They are mostly in no particular order, although I think the top story is pretty obvious.

1. The Fukushima Daiichi nuclear disaster

On March 11, 2011 the tsunami that flooded Japan’s Fukushima Daiichi nuclear plant resulted in the worst nuclear crisis since Chernobyl. The tragedy spurred heated debates over whether nuclear power could ever be totally risk-free. Several countries decided that the potential consequences were just too great, and reversed their plans for new nuclear plants and in some cases shuttered existing plants. The incident will likely slow the global development of nuclear power for years, just as the Chernobyl accident did in the late 80’s and early 90’s.

2. The Keystone Pipeline debate

Environmentalists scored a major victory when the Obama Administration announced a delay in approving the controversial Keystone Pipeline that would have delivered oil from Canada’s Athabasca oil sands deposits to refineries in the U.S. But the issue is still very much alive, and promises to be an important energy news story to follow in 2012.

3. Brent and WTI prices soar; price spread blows out

For the first time since 2008, Brent and West Texas Intermediate headed back above $100 a barrel. Brent in fact spent much of the year above $100 as a historic spread in price relative to WTI opened up. Eventually Brent traded at a $25 premium to WTI, primarily due to two factors: WTI prices moderated because of growing production in North Dakota and from Canada’s oil sands, and Brent prices were higher due to the conflict in Libya. But globally, Brent is the more important benchmark, and gasoline prices in 2011 were mostly dictated by the price of Brent.

4. US import dependence falls on surge in US product exports

U.S. refiners exported a lot of jet fuel, heating oil, and gasoline this year; so much so that they actually exported more finished products than the country imported for the first time since 1949. However, this development also highlighted the energy illiteracy among some in the media, who incorrectly reported that the U.S. had become a net exporter of oil. This was not remotely true; the U.S. is still highly dependent on oil imports. They have just been using more of that oil to make finished products for export.

5. Solar prices plummet

The price of solar panels fell dramatically in 2011; down an estimated 50% from 2010 levels. While this was good news for consumers, it put intense pressure on U.S. solar panel manufacturers, causing some — like Solyndra — to declare bankruptcy.

6. Ethanol tariffs and tax credit expire; EPA approves 15% ethanol blends

More than three decades of ethanol tax credits came to an end at the end of 2011. Also expiring was the tariff on imported ethanol, but unlike the tax credit, this one may come back to life in 2012. Ethanol producers needn’t fear the expiration, however, as they are still well-protected by the mandates in the Renewable Fuel Standard. The EPA also approved 15% ethanol blends in some car models, but this was mostly a non-story as there was very little demand for the product.

7. Electric Cars Slow Sales

Electric cars began hitting the roads for real, but sales were disappointing. Not only were sales of GM’s Volt lower than expected, but electric car sales were disappointing in the U.K. and in China. If this trend continues, then we won’t need conspiracy theories to determine who killed the electric car.

8. U.S. oil and gas output grow strongly

Aided by rapidly growing output from North Dakota’s Bakken field, oil production in the U.S. rose for the third year in a row. Natural gas production also continued the growth trend that started in 2005, and in 2011 was on the verge of breaking the U.S. Dry Natural Gas Production record set in 1973.

9. Fracking revolution expands

Natural gas from fracking continued to make up an increasing portion of U.S. natural gas supplies, even as battles raged about the possible environmental implications. China — believed to have the world’s largest reserves of shale gas — is preparing to begin shale gas development soon, and is being assisted with technology sharing from the U.S.

10. IEA orders release of oil from inventories to counter tight market brought on by Libya

In response to Libyan oil being removed from the world oil markets due to the conflict there, the U.S. released oil from the Strategic Petroleum Reserve in conjunction with a release from IEA member countries. At the time the release was announced, world oil prices were above $100/bbl. They initially fell a bit, but then within a week were higher than they were before the release was announced, and six months later are still above $100/bbl.

Honorable Mentions

There were a number of stories that arguably could have been in the Top 10. These include the failure of Solyndra and Range Fuels, the Obama Administration’s decision to delay implementation of new ozone standards (among other decisions to delay new rules and regulations), China’s continued insatiable appetite for energy, another year of cellulosic ethanol failing to deliver, or the Obama Administration’s continued evolution of their stance on the expansion of domestic and offshore drilling.

Predictions for 2012

I will offer up four energy predictions for 2012’s top stories:

• President Obama will easily win reelection, which means that energy policies will likely continue along the current trajectory.
• The Keystone Pipeline project will be approved (although that decision may still slide into 2013).
• Natural gas prices will remain low, averaging below $5/MMBTU for the year.
• Oil prices — both West Texas Intermediate and Brent — will average above $100/barrel in 2012.

And one political prediction: We will look back on the fact that Newt Gingrich was once the leading Republican contender for president and have a good laugh about it.

In closing, I hope 2011 was a good year for readers, and that you will have much success and happiness in 2012.

Link to Original Article: Top 10 Energy Stories of 2011

By Robert Rapier