Gas in vehicles

I read with interest your editorial entitled "Gas as vehicle fuel" (OGJ, June 4, p. 26). Good points. Here is one more.

One big problem with using natural gas or hydrogen is the fact that pressurized tanks develop leaks. It is going to happen sooner or later. Therefore, parking gas-fueled vehicles in a closed garage will generate a certain percentage of explosions.

It won't be long before insurance companies mandate that gas-powered vehicles be parked outdoors. (People who heat their homes with propane will be familiar with the outdoor tank.) This would be a major disruption for personal vehicles normally parked in garages. I wonder if the feds are aware of this.

Tom Creswell, Project Manager
Processes Unlimited International

Where the jobs are

The US economy added just 80,000 jobs in June, a third straight month of weak hiring. The unemployment rate was unchanged at 8.2%, but it would have been much worse without a boom in domestic oil and gas production.

There are actual labor shortages in expanding oil and gas areas of the US—places like North Dakota's Bakken shale region. There, business activity from thousands of new wells completed with hydraulic fracturing has unemployment at near 3%.

In northeastern Ohio, moribund since steel mills closed in the 1970s, a $650 million steel mill is being erected near Youngstown with 10 construction cranes for V&M Corp. The mill will produce steel pipe and other equipment and create 350 long-term jobs by the end of 2012, more than doubling V&M's local workforce. A V&M melt shop, where raw steel is produced by melting scrap in furnaces, will be the next big job-creating project at that site.

Nearby, in Carroll County, a new, 350-acre industrial park is ready for oil and gas-related projects. The state of Ohio is expecting 200,000 new jobs by 2018 from the Utica shale, which underlies most of eastern Ohio.

The growing replacement of coal by cleaner natural gas for US electric power is good news for the environment and jobs. Environmental Protection Agency rules that restrict coal's mercury and sulfur emissions are forcing that shift to natural gas, now plentiful from wells drilled horizontally into unconventional reservoirs and completed with hydraulic fracturing.

The decline in coal's domestic market is being replaced by increased coal exports. From a 50% share of the US electric power market 5 years ago, coal supplied just 42% in 2011 and is now below 40%. A rise in the use of natural gas at US electric utilities, from 20% to nearly 30%, is making up most of the difference. At the same time, wind and solar power have risen from 1% to 3% or 4% of US electric energy supply.

Overall, expansion in the oil and natural gas industries has created 500,000 good-paying jobs in the past decade. The expansion is not slowing down, as several large shale reservoirs are now productive in various parts of the US. Overall, US oil production has grown by 10% since 2008, and the import share of US oil consumption has dropped to about 45% from 60% in 2005. This trend is expected to continue. A new study by Wood MacKenzie reports oil and gas production could create an additional 1 million US jobs by 2018.

The touted jobs future in the "green" sector is limited by its cost per kilowatt-hour. Wind and solar are at least twice as expensive as electricity produced with natural gas. A study for Spain by King Carlos University showed that for every subsidized wind or solar job, more than two jobs were lost in energy-consuming industries because of increased electrical costs. Some Spanish production was moved to France because of its lower-cost nuclear energy.

There is an entirely new reality with US energy production, consumption, and imports. New oil and gas supply is emerging, and fossil-fuel demand is being limited by conservation and efficiency. It is too soon to talk of energy independence, but oil imports are declining to the point that most the US oil need could soon be met by friendly Western Hemisphere sources. Canada continues to develop its vast oil-sands deposits, and Brazil will be producing from the world's largest new oil discoveries in the offshore Santos basin.

As author and IHS Vice-Chairman Daniel Yergin noted recently in the New York Times, "What is striking is this great revival in oil and gas production in the United States, with wide impacts on jobs, economic development, and the competitiveness of American industry. This new reality requires a new way of thinking about America's improving energy position and how to facilitate this growth in an environmentally sound way—recognizing the benefits this will bring in an era of economic uncertainty."

Let's hope our government gets the message and supports energy programs that replace imports with American jobs.

Rolf Westgard
St. Paul