From the President- March 2019

Alternative Universes

  I attended the DUG Haynesville Conference in Shreveport last week on February 20.  It was an upbeat conference highlighting the second act of the Haynesville plays starting after the recent downturn. The play has come back with better production than before due to producers iteratively trying new innovations and changing one variable at a time to increase production. They have tried different lateral lengths, frac pounds, number of stages, proppant type, and choke management to get the best combination. I’m sure innovations in geological analysis are being done too, but the conference didn’t really address those. Sometimes downturns have beneficial aspects because they allow the time and motivation to do better evaluations and to just think. After all, ‘necessity is the mother of invention’. The one very clear message for the future was that the major producers are looking to the gas-rich Haynesville as a major supplier of product for the LNG export facilities being built on the Gulf Coast. The capacity of the existing robust pipeline infrastructure is already being increased by adding larger diameter pipes, as well as new pipelines.  The Haynesville will be one of the major U. S. areas supplying the world with energy.

The Oil and Gas Industry is doing its job by stepping up in a capitalist free-market system to provide the energy modern civilization needs to function and grow. “Total energy usage is predicted to rise between 25% and 35% by 2040 due to increasing population and higher global GDP.” At the moment “80% of the energy we use globally is sourced from hydrocarbons (oil, natural gas, and coal), and 20% comes from renewables and nuclear.” Natural gas is the low carbon, environmentally sustainable energy bridge until economically competitive renewable technology can be developed for carbon-free energy. But renewable energy is still not competitive with hydrocarbon. “A study by the University of Texas projected that U.S. energy subsidies per megawatt hour in 2019 would be $0.5 for coal, $1- $2 for oil and natural gas, $15- $57 for wind and $43- $320 for solar. Many of the renewable energy subsidies come in the form of a Production Tax Credit (PTC) of 2.3 cents per kilowatt-hour. Wholesale prices for electricity in 2017 were between approximately 2.9 cents to 5.6 cents per kilowatt-hour. Therefore, the wind production tax credit covers 30% to 60% of wholesale electricity prices.” (quotes in this paragraph from Bill Maloney, March 23, 2018, Renewable Energy Subsidies –Yes Or No?: Forbes)

However, as I drove back to Houston after hearing the Haynesville message during the day, I began to wonder if I had gone through a wormhole to an alternative universe. The program on the radio was an in-depth discussion of the Rep. Alexandria Ocasio-Cortez’s Green New Deal. It was surreal. 

The Green New Deal is a manifesto calling for sweeping changes to American society as it implements eco-socialism. Key goals include cutting greenhouse-gas emissions to net zero over 10 years and guaranteeing jobs for all. The Petroleum Industry would be destroyed, much as President Obama destroyed the Coal Industry.

As Alex Hill said in The Hill (1/31/2019), “In short, the Green New Deal would be a deficit-financed expansion of federal bureaucratic power to dictate investment decisions in one of the most dynamic sectors of the economy. Responding to the threat of climate change by growing the government and further centralizing energy market decisions puts at risk the free market economy that our nation has relied on for economic growth for more than two centuries.”
The cost of the proposed plan would be tremendous. Bloomberg (2/25/2019) reports that American Action Forum, which is run by Douglas Holtz-Eakin, who directed the non-partisan CBO from 2003 to 2005 estimates “The so-called Green New Deal may tally between $51 trillion and $93 trillion over 10-years”. “That includes between $8.3 trillion and $12.3 trillion to meet the plan’s call to eliminate carbon emissions from the power and transportation sectors and between $42.8 trillion and $80.6 trillion for its economic agenda including providing jobs and health care for all.” The group said in its analysis. “It’s further expansion of the federal government’s role in some of the most basic decisions of daily life, however, would likely have a more lasting and damaging impact than its enormous price tag.”

So how did we get to the point where the use of hydrocarbons for energy is the driver for pushing us into socialism and autocratic control over all aspects of our lives?

Coincidentally, in the February 27 General Lunch meeting Dr. Rusty Riese answers this question in a succinct presentation, “Geologists, the Public, and Public Policy: What Are Our Ethical Responsibilities?”. I recommend everyone look at and share Rusty’s presentation, which is annotated with the text of his talk. The PowerPoint is available from the HGS Home page and the recording will also be on the HGS YouTube Channel. As Rusty pointed out, this dilemma we find ourselves in has been decades in the making, analogous to slowly boiling a frog. It started with the progressive destruction of our education system since 1965, accelerated by unethical scientists falsifying data and a growing ignorant population. It seems overwhelming and irreversible. However, as Rusty pointed out, the only hope of reversing the situation is to have many voices speaking out to point out the truth. What better people than geologists to be the evangelists of the climate change truth. We know it better than any other discipline.


Most reasonable people say The Green New Deal will never happen. But I say we should not underestimate the destructive power of a government populated by ignorant people with power. Look at Venezuela for a recent example.