Modeshift

Converging trends  are roiling the clean energy manufacturing and production sectors here in Michigan and  nationally. President Obama knows it and is worried. The collapse of the Solyndra solar plant in California is  a prickly presidential campaign issue. Jobs and the country’s capacity to reduce its climate changing emissions, (as shown in the emissions counter above in NYC), also are big outcomes.

On Tuesday evening, the president told the story of an unemployed west Michigan furniture worker who landed one of 50 new jobs at Energetx Composites, a wind turbine blade manufacturer in Holland, Mich. that is the beneficiary of big state and federal clean energy grant support. Holland, by the way, also is the site of two big government-supported battery plants involved in supplying the state’s electric and hybrid car sector.

The president’s spotlight on the Holland worker and his vow in the State of the Union to “not walk away from the promise of clean energy” reflects, to some extent, his administration’s deep concerns about the swift evolution in overseas competition. He’s also worried about the fast-changing markets for energy, investment capital, and political and public support that are buffeting the American alternative energy sector.

Indeed, while a new wind energy production line opened in Holland last year, 140 miles away Evergreen Solar, a Massachusetts-based solar panel maker, declared bankruptcy in August and closed its new Midland, Michigan plant that employed about 40 people.

On the production side, solar and wind-generated power are holding their own. Solar energy developers added roughly 2,000 megawatts of new generating capacity last year, about double what was added in 2010. Wind energy propducers added nearly 7,000 megawatts of new generating capacity, 31 percent more than in 2010, according to the American Wind Energy Association.

But siting new plants is often a dogfight. Here in Benzie and Manistee counties where I live Duke Energy threw in the towel this month for a proposed 112-turbine wind farm. Opponents were essentially motivated by their revulsion to big towers interrupting a gentle wooded landscape. The issue was scale. Similar opposition is developing to the Obama administation’s proposal to open federal lands to big solar developments, as my Circle of Blue colleague, Brett Walton, discovered in Colorado’s San Luis Valley.

The popular pushback to big new clean energy projects is just one of the sources of turbulence in the U.S. clean energy manufacturing sector. On the one hand, big companies like GE announced plans in October to build a $300 million solar panel plant in Aurora, CO., that will employ 355 people when it opens this year. On the other hand Amonix, which in May completed a $18 million, 244,000-square foot plant in North Las Vegas to put over 300 people to work manufacturing equipment for big solar thermal plants in the desert Southwest, announced on January 25 that it was laying off 200 workers because of slow market conditions.

The picture in the wind energy manufacturing sector is a little clearer, though not by much. Gamesa, the big Spanish wind turbine maker, has two plants in Pennsylvania and employs 800 people. The company has opened over a dozen big wind farms nationally, including three in its adopted state. In 2009 it laid off several hundred workers but has rehired them. Meanwhile Vestas, the Danish wind energy manufacturers has built four wind manufacturing plants in Colorado that employ 1,500 workers.

Several market trends are smacking the wind energy. First is foreign competition, especially from South America, where new wind blade plants have been built specifically for the U.S. wind market, the world”s second largest behind China. The second is the federal wind energy production tax credit, which expires at the end of this year. Vestas, for instance, has threatened to close its Colorado plants if the tax credit is not renewed. While support for renewal is weak among Republican U.S. House and Senate members, it is strong among Republican governors in windy states — Ohio, Michigan, Nebraska, Kansas, the Dakotas — because of the role it is playing in encouraging job growth.

The third big trend affecting the wind industry is the boom in natural gas production, which is lowering prices and prompting more utilities to consider gas-powered generating units. Last week, the United States reduced its estimate for how much gas lies in the nation’s deep shale deposits by 40 percent. But those numbers are almost certain to be revised again, probably repeatedly, as production companies gain a better understanding of what is there. Even with the lower estimate there are still huge reserves of gas, and of oil, in those shales.

– Keith Schneider

Four years ago, when he campaigned for the office he now holds, Barack Obama described the urgent need to pursue clean energy development because of a grave and persistent problem. Demand and prices for oil were rising, along with national and economic security risks tied to ever higher imports. Supplies of domestically-produced fuel, meanwhile, were falling.

Last night, as the president defined the basic outlines of an “all-out, all-of-the-above strategy that develops every available source of American energy,” the country greeted much different conditions. Domestic production of oil and natural gas is climbing rapidly. Demand is going down. Imports are steadily declining. Prices have steadied.

The result is that while President Obama is still pressing for more sources of cleaner energy — “I’m directing my administration to allow the development of clean energy on enough public land to power 3 million homes,” he said — the allure of pursuing them is not nearly so keen. Summed up, the surge in fossil fuel production has indeed produced an economic reprieve, but one that is exceedingly risky for land and water, and could well turn out to be a surrender to the future.

Here’s why.

Rush to Drill
Horizontal drilling technology coupled with high-pressure water blasting — much of it developed with the help of federal research grants — has opened deep beds of hydrocarbon-rich shales all over the country to gas and oil production. An energy boom has erupted in eight Great Plains states, three mid-Atlantic states, plus Louisiana and California. In 2011,  according to the Energy Information Administration, production of natural gas from deep shales reached 630 billion cubic feet a month, a third of the total U.S. natural gas production and 17 times more than in 2000. U.S. oil production last year reached almost 6 million barrels a day, and has been rising for three straight years, the first time that has happened since the 1970s.

“Right now — right now — American oil production is the highest that it’s been in eight years. That’s right — eight years,” said the president. “Not only that — last year, we relied less on foreign oil than in any of the past 16 years.”

The boom is generating tens of thousands of new jobs in politically strategic places like Ohio, Pennsylvania, and Colorado that are essential to the president’s re-election chances. Since 2005, according to EMSI, an Idaho-based labor market research firm, oil and gas production activities alone generated almost 200,000 new jobs nationally. Nearly 400,000 other jobs in transportation, manufacturing, service, and related support sectors also were created, said EMSI.

The other side of the president’s plan — building a bridge to a new era of cleaner energy sources — is unfolding at a much slower pace. Last year, according to the American Wind Energy Association, almost 7,000 megawatts of wind energy capacity was constructed in the U.S., 31 percent more than in 2010. But China built more than 14,000 megawatts of wind energy, or twice as much.

Fitful Clean Energy Development
It takes big and consistent federal and state investment in wind, solar, cellulosic biofuels, geothermal energy, nuclear energy, clean cars and trucks, trains, and energy-efficient buildings to give innovators and entrepreneurs a solid grip in the cleaner economy. In the era of deficit and disinvestment that describes the political conditions at work in Washington and most state capitals, lawmakers supported by the fossil fuel sector have expressed no enthusiasm for making those investments.

The arguments for pursuing wind, solar, and other cleaner sources of energy make a lot of sense, as do reasons for being more cautious about the consequences of oil and gas production. The use of water is a good starting point.

Much of the shale gas and shale oil development is occurring on the arid Great Plains, where drillers require 2 million to 5 million gallons of water to hydrofracture each well. In a region where competition for water is fierce, water managers are not sure where the supply for thousands of new wells a year will come from. In addition, much of the water that goes down each well has to be brought back to the surface and disposed safely because it contains chemical contaminants. States are only now considering requirements for wastewater disposal from shale oil and shale gas fields.

Contrast that with generating power from solar photovoltaic and wind energy installations, which require, essentially, no water to operate. Or generating fuel from switch grass and other sources of plant-based fuel that can be grown on marginal lands and don’t need to be irrigated.

Reprieve or Suurender
Big clean energy projects, though, are proceeding fitfully. Because of the surge in domestic oil and gas production, they face mounting price competition in energy markets. And they are confronting serious opposition at the grassroots across the country. My colleague at Circle of Blue, Brett Walton, is reporting later this week on one fight over constructing solar plants in Colorado’s San Luis Valley, which is identified by the Obama administration as one of the 17 most favorable places in the U.S. to develop solar energy.

In effect, the fossil fuel reprieve could easily turn out to be a devastating surrender to the future. Researchers at the Massachusetts Institute of Technology, who evaluated the effects of rising shale gas production on clean energy innovation, reached much the same conclusion in a report earlier this month. “People speak of [natural] gas as a bridge to the future, but there had better be something at the other end of the bridge,” said Henry Jacoby, co-director emeritus of MIT’s Joint Program on the Science and Policy of Global Change, and co-author the MIT Energy Initiative’s  The Future of Natural Gas.

– Keith Schneider

Every month the Energy Information Administration, a unit of the Energy Department, updates its Total Energy report, one of the most useful compendiums of data describing the interest and capacity of the American energy sector. The latest edition, published last month, illustrates a national oil and gas sector on a roll.

Among the rich field of data charts contained in Total Energy, two are arguably the most revealing. Table 5.1 (page 77) reports that the number of oil and gas drilling rigs in operation across the U.S. last year reached an 11-month average of 1,865. That is the highest rig count since the mid-1980s, according to the EIA.

Table 5.2 (page 78) reports on the number of wells drilled each year. It shows that the surge in oil and gas production began around 2003, when just under 33,000 wells were drilled in the U.S. Last year about 45,000 wells (including one in North Dakota pictured above) were drilled.

Still, the two most important statistics within the table are these:

1. More than 20,000 oil wells were drilled in the U.S. in 2011, higher than any year since 1985.

2. Of the more than 40,000 oil and gas wells drilled in 2011, just over 10 percent were dry.

Said another way, 90 percent of the wells sunk into America’s shale oil and shale gas fields are producing commercial quantitites of fuel. In contrast, in 1985 drillers sunk almost 71,000 new wells. Over 21,000, or 30 percent, came up dry.

As I’ve noted on ModeShift since returning from a reporting trip to North Dakota last month, a national oil and gas drilling boom is engulfing eight Great Plains states, four others in the mid-Atlantic and South, plus California. A convergence of new exploration and drilling techniques, rising global demand and prices, and suspect governing oversight is producing what looks to be the most powerful surge in fossil fuel production in U.S. history. From every vantage – economic, environmental, cultural, and security — the consequences are momentous.

The abundance of fuel in the carbon-rich shales, coupled with the “nearly can’t miss” risk, is attracting huge investments in the shale reserves, many of them now coming from overseas. Bloomberg reported this week that “Chinese, French and Japanese energy explorers committed more than $8 billion in the past two weeks to shale-rock formations from Pennsylvania to Texas after 2011 set records for international average crude prices and U.S. gas demand. As competition among buyers intensifies, overseas investors are paying top dollar for fields where too few wells have been drilled to assess potential production, said Sven Del Pozzo, a senior equity analyst at IHS Inc. (IHS)”

Last week Bloomberg reported that “China Petrochemical Corp., the second-largest Chinese oil company, agreed to buy a one-third stake in five Devon Energy Corp. exploratory oil projects in the U.S. for $900 million to expand holdings of reserves trapped in shale. The company, known as Sinopec Group, will pay $900 million in cash and as much as $1.6 billion in Devon’s future drilling costs, funding 125 wells in the coming year.” Devon is a major player in the Eagle Ford shale development in Texas.

Another example is Total SA, France’s largest oil company, which announced just after the start of the year that it paid $2.32 billion to Chesapeake Energy Corp. and EnerVest for 619,000 acres of mineral rights in Ohio’s Utica shale region.

There’s more to come in 2012. In central Louisiana, Devon Energy is developing new wells in the Tuscaloosa Marine Shale that researchers said may contain as much as 7 billion barrels of oil.

– Keith Schneider
(Thanks for the lead to Total Energy from Bob Deans,  former White House correspondent for the Atlanta Journal-Constitution, and now the Natural Resources Defense Council’s associate director of communications.)

Early this morning Scott Terrell boarded Amtrak’s Empire Builder in Coeur d’Alene, Idaho for the overnight ride east to Williston, N.D. A month ago I met Scott while riding the same train to the heart of the northern Great Plains oil and gas boom. In the weeks since, I’ve learned more about the influence of energy development in the Dakotas and other states, and how it affects men like Terrell.

Let’s just put it this way. It’s about the money. Terrell is 58, and an under-employed painter and carpenter from Idaho. He’s been earning good money since August driving a haul truck on a construction crew that builds drilling pads and does reclamation work.

“My current wage scale is $20 per hour with $30 overtime kicking in after 40 hours for that week,” he told me. “I average 70- to 80-hour work weeks during long summer daylight hours. I believe 80 hours was my max for a week’s work.” It adds up to roughly $2,000 a week, sometimes more.

Late this week, the government said the economy added 200,000 jobs in December, double November’s pace and all of it coming from the private sector. The unemployment rate fell to 8.5%, down from November’s revised 8.7% rate.

As we reported here earlier, three of every five new jobs generated in the U.S. since 2005, according to EMSI, an Idaho labor market research firm, were the result of oil and gas production and related industries. How ironic that the energy sector, arguably President Barack Obama’s most implacable political foe, is largely responsible for building the employment numbers that are likely to get him re-elected.

Terrell (who took these shots and is pictured below), is one of the estimated 1.5 million Americans who’ve gained jobs since 2005 working in energy production and related industries. He’s found good work and a place to live in a bed and breakfast with four other oilfield workers in Sidney, Montana, just west of Williston. He’s trading his labor — remodeling the home’s basement — for room and board. His housemates come from Texas, Louisiana, New Mexico, and Billings, Montana. “The oldest is in his mid-40s; the youngest just 19 years old. And what a mix of personalities.”

“I could have worked more hours, but chose to take weekends off for trade-out labor,” he said. “I am finishing a basement with two rooms and a new bathroom. The project will finish up by February 1st.

“This to say, $7000 per month is probably an average monthly amount that I earn. Like I mentioned, I worked a 10-week stretch without a trip home, because I started late in August. I took a break of two weeks at Thanksgiving and two weeks this Christmas.

“I am trying to get a set schedule with my company, either four weeks on, one week off or, preferably, ten days off. The request seems to be under review at this time.”

Terrell is married and said he missed his wife. He said most of the men he knows, except the very young guys, are so tired after a day’s work that they just gather for dinner and go to sleep.

Days start in the dark before dawn. The pictures at the top and bottom of this post were taken by Terrell at 5:15 a.m. at the Loaf-N-Jug in Fairview, Montana. “It’s a daily sight on our way into Williston,” he said.

“Our three-man reclamation crew basically works six days at 12 hours. Once in awhile there are 90 to 100-hour weeks when it’s crunch time.

“Now that the winter season is kicking in with less daylight, we’re probably looking at 12-hour days. Our crew has transitioned from reclaim work sites to helping build oil drilling pads. Most likely I will have to work six days a week to make it work financially for our winter work plan. So the motivation is to complete the bed and breakfast basement project, and work more hours in the oil patch.”

The pace and fury of the development carries dangers. Last September, an explosion and fire on a drilling rig killed two young workers and badly burned two others. “I could see the smoke on the horizon the day the workover rig exploded just outside of Williston,” he said.

Almost 30 years ago, Terrell worked 100-hour weeks on the Alaska North Slope. “We were a mobile exploration crew and worked minimum seven days at 14 hours per day, with a few extra hours usually thrown in. It was much more organized in Prudhoe Bay and the outlying oil fields and exploration areas compared to the oil patch in the Dakotas, Montana, and Wyoming. The fracking and all that’s required with this process makes it much more intense and heavy equipment-oriented. Hence, my term for Williston – The War Zone.”

“The age factor wears on ya, at least it does me,” he concluded. “It has had a compounding effect on me, both physical and mentally. Most of this challenge, in and of itself, is not a big deal. But when you throw it all together, the compounding effect kicks in.”

– Keith Schneider

Joel Bleth, a lawyer and engineer who co-founded Solar Bee, a very successful Dickinson, N.D.-based manufacturer of solar-powered equipment to circulate wastewater at treatment plants, sent a message here today asking how long the oil and gas boom in his state would persist.

Dickinson, a prairie city of 18,000, has grown more than 10 percent since the turn of the century and for several years has experienced swelling markets for retail and office buildings, hotels and motels, and housing. Much of that is related to the Bakken shale oil and gas boom, centered in Williston 132 miles north, but which is steadily surrounding Dickinson and other communities closer to the border with South Dakota.

I interviewed Joel (see pix above) at the Solar Bee plant last month. He’s one of the rare executives in the alternative energy sector in what is now the fourth largest oil producing state.

My reporting in the United States, and from three other continents in the last few years, clearly indicates that the Bakken development, as well as drilling in the Tyler and Three Forks shale formations, which lie above and below the Bakken, is very likely to persist for at least a generation.

Production in North Dakota (see pix below by Scott Terrell) has already reached 500,000 barrels per day and, according to industry executives and state oil and gas regulators, will reach 1 million barrels daily within a year. The Bakken contains some 22 billion recoverable barrels, say state officials. The two other shale reserves also contain billions of recoverable barrels, they say. 

Moreover, the market for the crude oil and natural gas pouring out of the energy fields of the northern Great Plains, which includes Montana and two Canadian provinces, is huge and growing. While it is true that U.S. demand for crude oil has temporarily declined in recent years, largely because of the Great Recession, demand for oil in China is rising fast.

In 2000, China imported 1.4 million barrels per day, or 29 percent of the 4.8 million barrels it consumed each day that year. In 2011, China imported 5.4 million barrels a day, or 58 percent of the 9.2 million barrels it consumed daily. In the last decade, in other words, China’s oil imports more than tripled and its overall oil consumption nearly doubled.

The Energy Information Administration said that the growth in China’s consumption in 2010 and 2011 represented almost 40 percent of the increase in world oil demand during the two-year period.

Having spent weeks in China during four trips from November 2010 to September 2011, and having reported on energy, water, and China’s soaring economy, I saw no evidence that China has any plan other than accelerating its development. China, which last year overtook the U.S. as the largest energy consumer on the planet, is also now the largest market in the world for grain, cars, coal, steel, cement, glass, chemicals, trucks, trains, construction equipment, power plants, dams, etc. The risk to the United States and the global economy from China is that it’s growing so fast, any number of factors — commodity shortages, price increases, inflation, domestic unrest, droughts, floods — will cause Chinese markets to implode.

Barring that, China will continue to drive the market for oil, a global commodity. And as North Dakota and the other big shale oil production fields in the United States expand, helping to lead the U.S. out of recession, the improved domestic American economy will also prompt higher consumption of oil and gas. So for those reasons, and others, it’s my conclusion that the Great Plains energy surge will persist for decades because the resource is there.

Joel, though, sent the chart below comparing gold and oil prices over time:

“How long will the high oil price and corresponding drilling last?” he asks. “The answer depends on whether the price of oil is being held up by (a) demand for fuel, now and in the future  vs. (b) oil is a commodity being purchased mostly to hedge against inflation.

“The chart comparing gold to oil prices over the past 5 years seems to confirm, with other info on oil use, that demand (neither present or future) is not the driving factor in the price of oil, and that oil is just another commodity that money has flocked to for protection against inflation as the governments around the print money to solve the debt crisis.

“If demand for fuel is keeping oil high, than a general economic recovery will make it go even higher since fuel usage will go up.  If, as I suspect and the attached chart would indicate, oil is just another commodity being purchased to hedge against inflation, then when a recovery occurs that same money holding up oil now will probably be moved into the stock market (more reactive to the 70% of economy driven by consumers), and then oil will fall.  In that case this drilling would end in perhaps 2-3 years instead of 40 years.”

Interesting thesis but I don’t think it’s going to turn out that way.

– Keith Schneider

More reporting in this series:

In North Dakota’s Bakken Oil Field, The Smell of Diesel, the Sound of Trucks

Boom in Bakken Oil Play, and Elsewhere Starting to Drive U.S. Economy

Bakken Oil Wells Surround North Dakota National Park

Is American Energy Exploration and Production Breaking the Great Recession?

Bakken and Other Big Oil and Gas Plays Produced 600,000 New Jobs Since 2005

Great Plains Bakken Riches Describe New Wealth, New Risks

North Dakota Oil Boom Like Air Ambulance Flying In Storm

The day after Christmas, Scott Terrell, a painter and carpenter from Coeur d’Alene, Idaho turned 58. Never has he felt the weight and wear of his years so acutely. Last August Terrell joined the army of oilfield mercenaries that are rapidly converting great stretches of North Dakota, Montana, South Dakota and Wyoming into the most productive fossil fuel development zone in U.S. history. He quickly landed a job driving a Volvo haul truck on a heavy equipment construction crew that builds the flat-as-a-table, laser-graded oil drilling pads. There is plenty of work. Last year in North Dakota alone, drilling companies punched 2,000 new wells into ground. Terrell (pictured below and who took the shot above) spends 14 hours a day behind the wheel, breathing dust in North Dakota’s hot summers, and pulling up his collar against the fierce wind and cold of the Dakota winter.

The pace is relentless and dangerous. The drilling crews on nearby pads are probing portions  of the oil-bearing Bakken shale formation saturated with hydrogen sulfide, a lethal gas. North Dakota state health and environmental agencies have documented over 1,000 spills of oil, chemicals, and other compounds, nearly five times as many accidents as in 2004. Traffic fatalities doubled from 2010 to 2011 and injuries connected with the movement of heavy oilfield equipment climbed 40 percent in a year in western North Dakota. An explosion and fire on a drilling platform in September killed two young workers and badly burned two others.

There is nothing, in short, to hold Terrell to this work other than the wages — $7,000 a month for his three-week-on, one week-off schedule.

“It’s chaos,” Terrell told me in December. “When I leave, it’s as if I’ve never been here. When I return, it’s as if I’ve never left. It’s sort of unreal when you’re away from it all. And the return just sucks you back into the whirlwind. Just got to strap it on and ride it out as best you can.”

To some considerable extent, Terrell’s astute summation of his disruptive but necessary career in North Dakota reflects the essential economic contest of our time. In weighing the utility of immediate and generous oilfield income against the longer term risks to his health and emotional equilibrium, Terrell chose the money. Northern Idaho’s reluctant economy doesn’t generate as much demand as it once did for carpenters and painters.

While it is new to Terrell and to most of the other 45,000 men who’ve arrived from across the nation to work there now, the Dakota oil field represents something that was once familiar and secure in America. It is a place that provides men with ample opportunities to work for a living wage, the risks be damned.

That central notion, elevated to both national and global perspectives, is what we confront in this era of economic tumult and transition. During the past month, in two weeks of field reporting in the Dakotas and the Pacific Northwest, and in online research and interviews, the full dimensions of the immense riches and the equally dire hazards of the North Dakota oil boom became much clearer. To wit:

1. The energy surge in North Dakota is being duplicated in scale and intensity in almost a dozen other states – South Dakota, Montana, Wyoming, Utah, Colorado, Kansas, Texas, Ohio, Pennsylvania, California, and Alaska.  New  York, meanwhile, is about to lift its moratorium on fracking and relaunch development of the gas-rich Marcellus shale.

2. The national oil and gas surge has generated roughly 600,000 new jobs since 2005, new employment in high-paying work that came while the nation was losing 2.5 million jobs during the same period, according to EMSI, a labor market research group in Moscow, Idaho.

3. The number one American export in 2011 was refined petroleum products. The U.S. exported 1 billion barrels of gasoline, diesel, and aviation fuel worth $88 billion. The last time the country exported more fuel than it imported fuel was 1949, when the U.S. also was the only functioning industrial nation on Earth.

4. Low natural gas prices, generated by a convergence of new technology unlocking vast new supplies, and domestic politics that shielded the developers from government oversight, is prompting big shifts in industrial planning. New steel plants are opening in Ohio, along with new manufacturing plants for water hauling truck trailers, oil drilling equipment, and chemical factories. Utilities are installing new gas-fueled turbines to generate electricity. Pipeline construction is accelerating. Pricewaterhousecoopers produced a report last month that predicted low natural gas prices would generate 1 million new manufacturing jobs over the next decade or so.

5. The U.S. is in the third straight year of increasing oil production, the first time that has happened since the 1970s. Oil imports, which peaked at 455.6 million barrels in August, 2006, fell to 340.8 million barrels in October, 2011, a 25 percent reduction.

6. Shale oil reserves, like those in North Dakota, look to be immense. The estimates of recoverable reserves in the Bakken formation underlying North Dakota have grown to 22 billion barrels, more than 5 times higher than a federal estimate made in 2008. Similarly huge shale oil reserves are under development in Ohio, Texas, Oklahoma, the northern Great Plains, and Colorado. And the horizontal drilling and fracking technology that is unlocking oil from shales miles beneath the surface also is being deployed to tap the country’s existing conventional fields to produce more oil.

6. North Dakota, which had been losing population for decades, is now the fifth fastest growing state, according to a U.S. Census Bureau report in December.

So, very clearly, new U.S. oil and gas production is producing a surge of jobs, investment, and wealth in the American economy.  But Jeremy Rifkin, a Wharton-trained economist and author of the Third Industrial Revolution (Palgrave MacMillan 2011) says the oil and gas boom also is inordinately dangerous because it is  “the last gasp of the old industrial revolution.”

“The oil companies and related industries are trying to resurrect the energy sources of an era that is sunsetting,” he said. “The costs are immense for the economy, the environment, and for this society and others around the world. We’re at the endgame of the second industrial revolution. And while there are jobs connected to it, the price of energy is high and the real time impacts of industrial induced climate change on agriculture are being felt around the world. The question is what we do about it? And it doesn’t look good for the U.S. ”

European nations led by Germany, Rifkin said, are converting their energy production infrastructure to renewable technologies. China, Circle of Blue noted in its Choke Point: China report last year, is aggressively developing hydro, solar, wind, and nuclear options and taking command of the global alternative energy sector. The U.S., meanwhile, is abandoning the federal commitment to public investments in non-fossil fuel energy sources, and state incentives, led by renewable energy mandates on utilities in 33 states, could be in trouble.

Bottom line: the oil and gas boom has produced a reprieve that is likely to last at least a generation. It looks to have taken the urgency of planning for peak oil shortages off the table in the U.S., and globally. Large shale gas and oil reserves are under development in Africa and Asia. High prices have made it practical to develop the deep ocean reserves now being discovered and tapped in Angola, the U.S. Gulf, Alaska, Russia, and Venezuela.

But the issue we need to address is can the nation and the world endure another generation of fossil-fueled economic development? Energy industry executives say of course we can. Global climate change is not a threat, they argue, and they’ve successfully convinced their allies in Congress and state legislatures to govern without regard to the warming atmosphere.

Much of the rest of the world, though, understands the risks of a warming planet. Still, few nations are responding with genuinely effective domestic programs that promote low carbon alternatives. As we learned in Choke Point: U.S. and Choke Point: China, the aggressiveness with which industrial nations are pursuing carbon-based fuels – coal, oil, gas – and the reluctance to develop low-carbon alternatives is stressing food production, water supplies, and governments all over the world.

My sense is that the national and international fossil fuel development surge is like a global helicopter ambulance flying in a jarring storm. While capable of lifting the economy out of harm’s way, the aircraft also is in ever-present danger of crashing.

– Keith Schneider