“According to a recent ICF study, the Northeast will host more than one-fourth of all U.S. capacity expansions for natural gas pipeline investment through 2020 and about a third of NGL pipeline capacity. According to the study, the Marcellus, all told, is projected to stimulate nearly $70 billion in investments in natural-gas and NGL-related infrastructure through 2035.”
Pennsylvania was the birthplace of the oil and natural gas industry in the 1800s. A century and a half later, the Marcellus shale play has once again put Pennsylvania and West Virginia in the energy headlines.
This time the focus is on natural gas more than oil–and with wells that are at least one hundred times deeper than the first oil well drilled in 1859. The rapid growth in supplies in an area exceptionally close to major demand markets has been a benefit to regional economic growth and has helped reduce U.S.…
Continue Reading“When I attend NARUC meetings and other topical meetings, I am absolutely astounded by the number of rent-seeking non-profit organizations that are advocating for changes to shape the electric industry in ways that accommodate their interests (where do they get all that funding?).
Not all of them are wrong! But most assuredly, many of them are!”
The electricity regulatory framework is broken.
The long list of market distorting policy includes subsidies, mandates, mispricing, costly but ineffective regulations, entry restrictions, political vs. evidence based decision-making, social vs. market emphasis, and just plain anti-market bias. Add to this a gaggle of well-financed crony capitalists that can attend endless meetings to advocate for more of these misguided efforts.
The myriad reforms, just another layer of politicization, will take us even further from an economically coherent electric services industry to one that is full of command and control.…
Continue Reading“The distinction between renewable and non-renewable resources is tenuous and perhaps in the last analysis untenable.”
– M. A. Adelman, The Economics of Petroleum Supply (Cambridge: The MIT Press, 1993), p. 66.
M. A. Adelman, profiled yesterday, was an empirically driven energy economist. He was not a Malthusian because the data suggested otherwise. He found with petroleum what Julian Simon found in the the family of mineral resources.
Adelman’s writings richly describe the way to understand the paradox of expanding depletable resources. He emphasized that oil was a fungible, global commodity, and improving knowledge can overcome diminishing returns in different regions and certainly globally.
And Adelman captured a point that Alex Epstein today stresses: that oil is not a ‘natural resource’ but a man-made one, from finding the treasure in the ground to refining the raw material into useful human products to transporting the inputs to delivering the outputs to points of human consumption.…
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