Several news stories caught my eye this week as I was preparing to write this article.
The first was a Shell executive stating that converting their trucks to run on natural gas would cut their fuel costs in half.
The next story concerned Iran's threat to block the Straits of Hormuz. Much of the oil we import must travel on tankers through the Straits to markets in the U.S. Iran's threat increased the price of oil to over $100 a barrel. This in turn pushed the price of gasoline up over 15 cents a gallon in my area. I don't know about you, but I'm tired of Middle Eastern dictatorships holding the United States hostage over oil. It is time for us to call their bluff and stop buying from countries that cannot offer a stable cost-effective source of supply.
I also noticed that a subsidiary of AES Corporation filed for bankruptcy this week. This company owns and operates four coal-fired electricity generation facilities in New York State. The bankruptcy filing comes within days of the Obama administration's tightening of pollution standards. The new standards will require major and very expensive modifications to existing coal-fired plants.
The President's war on cheap electricity is continuing and I expect more electric plants will be shut down in the coming months. For those of us who live in Pennsylvania, this is a double whammy. We rely on coal-fired plants for much of our electricity. We also have large reserves of cheap coal in our state.
The coal industry provides many jobs in Pennsylvania, particularly in some of the smaller cities and towns. Shutting down coal-fired plants will rob the miners of their jobs and could force them onto unemployment insurance and welfare.
It is time for us to fight back! We must eliminate our dependence on Middle Eastern oil and at the same time resist the federal government's efforts to destroy the coal mining industry here in Pennsylvania.
I suggest that we look to the past to find ways to achieve both goals.
My first suggestion is to produce gasoline and diesel fuel from coal gasification. During World War II the allies cut off the oil the Nazis needed. Instead if trying to run the blockades, the Nazis created synthetic oil from coal and used it to run their vehicles. We can do the same thing today as we have the coal and the resources to make gasification cost effective.
In addition, we have the largest coal reserves in the world. Our reserves can supply our current needs for 240 years! Most of the best coal, anthracite, is found right here in Pennsylvania. Currently there are seven billion tons of mineable anthracite in our state. It is just sitting there, waiting for us to extract and convert it into liquid and gaseous fuels.
Coal gasification plants can be built next to the coalfields to reduce transportation costs. The oil and gasoline produced can be shipped to markets throughout the Northeastern United States and could supply much of the fuel we require. Building and operating the plants will create jobs here in Pennsylvania. No changes will be required to our cars or trucks. The gasoline and diesel fuel can be sold in existing gas stations. Best of all, we get to use our own Pennsylvania coal.
Coal gasification can also produce hydrogen. Vehicles can be converted to run on hydrogen, which is a zero emission fuel. The exhaust from a hydrogen vehicle is pure water. Using hydrogen to fuel our vehicles can reduce greenhouse gases and lower our costs. Hydrogen can also help automakers achieve the federal government's fuel conservation requirements. Starting in 2017, cars will need to achieve 54.5 miles per gallon of gasoline. By switching to clean burning hydrogen cars, we can eliminate some of the pollution caused by oil-based fuels.
We can also achieve energy independence and lower fuel costs by developing the natural gas in the Marcellus shale. In August, the U.S Geological Survey estimated that there are up to 84 trillion feet of natural gas in the Marcellus Shale. Like coal, natural gas can be converted into diesel fuel. We have the technology and we have the distribution system in place. All we need is to build the plants and start converting our natural gas into fuel that can be used in our trucks and diesel cars. Compressed natural gas (CNG) is clean burning and costs about half as much as gasoline. General Motors produces a cargo van and delivery truck that runs on CNG. Most other vehicles can be easily converted to run on CNG. The downside to CNG is the lack of filling stations. In time, I expect that compressed natural gas will be available at most if not all gas stations.
As for oil, we have plenty of it. The Department of the Interior (DOI) reports that there are 21 billion barrels of proven reserves. In addition, the DOI claims that there are 134 billion barrels of unproven reserves in the United States. This number excludes any oil in the Marcellus Shale. Clearly we have plenty of energy, yet we continue to import oil from Middle Eastern and Latin American despots. Not only does this make us beholden to these dictatorships, but it creates an unfavorable balance of trade as our oil and other imports exceed our exports.
We should develop our own oil, natural gas and coal. I believe that developing our resources, building coal gasification plants and modifying vehicles to run on natural gas will create the jobs we need to end the recession. In addition, we can be energy independent. Don't forget that the Arab nations almost destroyed our economy in 1967 and 1973 through oil embargoes. We cannot be beholden to any nation ever again.
It is time for us to become energy self-sufficient. It will take many years, possibly several decades to produce the fuels we need here at home. For this to become a reality, we need to get the politicians on board so that the permits can be fast tracked. We need to ensure that the environmentalists cannot prevent or excessively delay the permitting and mining processes. But most of all, we need all Americans to recognize that to be free we must ensure that no nation can ever again turn off the spigot that powers America.