August 2013 • 25
Collectively, these new uses for natural
gas are sure to cause gas prices to go up.
But the export of LNG probably will have
the most significant impact. Once suf-
ficient export facilities come on line, gas
is likely to be traded at a world price, just
like oil is today, instead of the current
land-locked North American prices we are
seeing today. Remember, it was only five
years ago or so that we were planning to
import LNG to supplement a predicted
shortage of natural gas.
What sort of additions and improvements
has AEC made in 2013?
We have a new “Get The Facts Before
You Convert” data sheet that we created in
collaboration with the National Association
of Oil and Energy Service Professionals
(OESP) and the Oilheat Manufacturers
Association (OMA) earlier this year. It is
specifically designed for dealers to use when
quoting natural gas conversions with an
option to upgrade the existing oil system.
It provides some data on conversions and
attempts to convince the homeowner to
stay with oil and choose the oil upgrade.
We also added an online store to the
AEC website. To visit the store, click on the
‘Get the Facts’ tab on the AEC home page
and select ‘AEC Member Services’ from
the dropdown menu that will take you to
the store. The first thing you will see is
the Get The Facts data sheet. As you scroll
down, you will find a portal to access the
AEC Energy Answers Today Webinar that
we have recorded for on-demand viewing.
This webinar was originally presented in
December 2011 and is designed to help
front-line personnel learn how to respond
to homeowners with questions about con-
versions.
As you scroll down further, you will
find AEC Banner Ads that can be easily
downloaded and added to any AEC
Supporter’s website. Following the Banner
Ads are five bill inserts or leave-behinds
that can be purchased in lots of 500, fol-
lowed by four radio spots that AEC cre-
ated in 2011 and 2012, which you can play
from the website. And following the radio
spots is one of the radio spots that has had
animation added, our 60-second Cable
TV commercial, our 30-second YouTube
video, and three 15-second versions of
that You Tube Video.
There has been a lot of talk about methane
leakage from natural gas production,
transmission and distribution. How does
methane leakage affect the natural gas
environmental profile?
AEC has been trying to raise public
awareness about this issue since its incep-
tion in 2008. Methane is a potent green-
house gas with 20 to 105 times the global
warming potential of CO2, depending on
the time horizon measure. The shorter the
time period, the greater the danger. Natural
gas is mainly methane, and pipeline gas
is leaking from wells, from interstate
transmission lines, from utility distribution
pipelines – in essence from every part of
the delivery and distribution system from
the ground beneath the gas wells to the
customer’s meter.
Many studies have been released
recently on this subject:
• A Cornell University study that
concluded that generating electricity
using pipeline gas from fracked wells
is worse for the environment than
burning coal;
• A Boston University study that
documented hundreds of leaks from
the gas lines beneath the streets of
Boston;
• A University of Colorado study that
measured leaks from fracked wells in
Colorado;
• A joint study by The University
of Colorado and the National
Oceanographic and Atmospheric
Administration that measured leakage
rates from fracked wells in Utah
documenting leakage rates as high as
9 percent.
Ironically, cleanliness is touted as one of
natural gas’s greatest benefits, and the reality
of that claim is likely to be just the opposite;
and as it related to gas from fracked wells
the evidence indicates that pipeline gas is
probably one of the dirtiest types of fuel,
ranking it below burning coal. The EPA has
pegged a leakage rate of 3.1 percent as the
point of parity between the emissions of
natural gas and oil from a global warming
potential. So any leakage rate in excess of
3.1 percent means burning oil is better for
the environment. Incidentally, if you add
a 2 percent bio component to the fuel oil
(B-2) the point of parity drops to a leakage
rate of 2.9 percent.
This issue has been the subject of
dozens of AEC E-Alerts. All E-Alerts are
archived on our website, so anyone looking
for information on this subject or any of the
studies noted above can find them there,
including links to the source data. AEC
plans to keep this issue in the spotlight
as much as possible and is encouraged by
the recent mainstream press coverage the
subject has been garnering.
How is the outlook for U.S. oil production?
Oil production is the highest it has been
in years in the U.S. Last year, we became
a net exporter of oil in terms of dollars,
and when you look at North America, the
future looks even better. Canada has huge
oil reserves contained in the oil sands. And
a broader look at the Western Hemisphere
portends a seismic shift on U.S. imports and
exports of oil in years to come.
For decades, oil has generally moved
from east to west globally, generally from
the Middle East to the West. But if you look
at newly discovered reserves or old reserves
now accessible through new extraction
techniques, the Western Hemisphere is rich
with old reserves that we can now get at as
well as new reserves.
If you look at the globe starting in central
Canada where the oil sands are centered and
travel south through North Dakota and the
Bakken, south through Kansas, Oklahoma
and Texas, you will find old reserves still
producing and new reserves like Eagle Ford;
south out over the Gulf of Mexico, also rich in
oil and gas production; south to Mexico with
oil and gas; south to Venezuela with very large
tapped and untapped reserves; and out into
the South Atlantic off the east coast of Brazil
where very large reserves have been recently
discovered under a mile of salt formations.
As new production comes on line over
the next decade or so, these new reserves
will have major business, cultural, economic
and political implications. The flow of oil is
beginning to move north and south in the
Western Hemisphere in lieu of the more
historical east to west movement, and many
changes are likely to take place, not the least
of which will be new geopolitical consider-
ations with a move away from the volatile
Middle East to a more North/Central/South
American focus. And for the U.S. the likeli-
hood of becoming energy independent is a
real possibility in the near future.
If this shift takes place as envisioned,
and if the lost oil volume to the Middle East
is not offset by other markets such as China,
then expect to see OPEC countries face
serious internal challenges as they struggle
to satisfy their local economies’ need for oil
revenues to satisfy their citizen’s expecta-
tions from government.
American
Energy Coalition
