Upstream and Midstream U.S. Oil and Gas Execs Remain Bullish on Natural Gas: Pipeline Capacity Remains Biggest Concern. Uncertainty About Government Support for Domestic Energy is Another Significant Concern.

 

     In a recent Bloomberg interview with upstream gas producer EQT CEO Toby Rice, he noted that the Appalachian region alone rivals Russia as a natural gas supplier. He also noted that the current pipeline takeaway capacity out of the region of about 35 BCF per day needs to expand, that production can easily meet new demand if pipelines capacity were available. The Mountain Valley Pipeline, over 92% complete with building cleared to resume, is set to add 2 BCF/day of new capacity, perhaps later this year, although it is already more than five years behind schedule. He also noted that well productivity is so good that EQT can run just 2 rigs to keep its production flat. He said that about a quarter of their production, or 1.25BCF/day is currently being delivered to the Gulf Coast LNG market and that new LNG export terminals and trains in progress should add to that. Rice has advocated for LNG to be a replacement for coal around the world for carbon emissions reduction. He noted that the current low gas prices are a result of the weather, the warmer winter, and that resulted in 500 BCF more gas supply than expected. Expectations are for prices to rise somewhat by the middle of the year. He did acknowledge that some drillers have pulled back the number of wells they will drill this year, especially in more marginal areas. Another factor, that will increase demand is the return of the Freeport LNG export facility that has been offline for several months.  

     Rice is taking a wait-and-see approach on a blue hydrogen project in which EQT is involved. He seems quite bullish on carbon capture, especially in the pure form provided by oxyfuel combustion via the Allam Cycle Gas plants being developed by NET Power, a company which his brother Daniel Rice just became CEO after taking the company public with a SPAC. The company is well-funded and set to create a revolution in carbon capture and sequestration in combination with a new supercritical CO2 based natural gas power plant design that is expected to rival combined cycle gas plants. The high purity of the CO2 captured through the oxyfuel combustion process renders it ideal for enhanced oil recovery use. Pilot projects have proven the technology. Currently, the first 300MW plant being built in Odessa, Texas is in the Front -End Engineering and Design (FEED) phase and is expected to begin actual construction in mid-2024. Utility-scale operation could begin in 2026.  

     In another recent Bloomberg interview with midstream pipeline company Williams CEO Alan Armstrong, he reiterated the sheer size of the Appalachian shale gas resources and the fact that it is consistently the lowest cost gas in the U.S. He also reiterated that inadequate pipeline takeaway capacity is the biggest block in developing those resources. He noted that three major pipelines have been stopped and scrapped after spending $11 billion in attempts to get that gas out of the region to markets. That certainly hurts the American economy. He noted that the 230 coal plants operating in the U.S. are equivalent to about 11-12 BCF/day of gas, that currently 6BCF/day of LNG demand has reached FID or is under construction, and that another 20 BCF/day of potential LNG export demand is being considered. Current LNG export output is around 13 BCF/day. He thinks there is plenty of supply in U.S. basins to meet that demand, mainly from the Marcellus, Utica, Haynesville, and Permian rocks. A big problem for his company and others that build large pipelines has been the states politicizing the Clean Water Act by blocking pipelines at the state level. He thinks states should be subject to FERC and not have their own veto right. Of course, he recognizes that permitting reform is strongly needed and is hopeful that there is more recognition of this. He says there are ongoing projects like adding compression or replacing some pipeline with higher pressure pipeline to add volumes but there is still need for more large pipelines. Asked about blending hydrogen in natural gas pipelines, he noted that age and carbon content of the pipelines are issues. He noted that Europe is doing it successfully so it can be done. Upgrades are manageable such as replacing elastomers in valves that can be dried out by hydrogen. He emphasized that small-scale blending makes the most sense, since blending just 2% hydrogen in U.S. pipelines would involve more hydrogen than is produced in the world currently. Thus, small level blending is the way to go, the most doable, and easiest to manage. This can also integrate hydrogen faster and cheaper, reducing emissions faster. He also noted that cybersecurity is being prioritized, that skilled labor is available, input costs like steel and lube oil have been higher but manageable, and that cost of capital is higher with higher interest rates but still manageable. He agrees that gas storage is going to be critical in the future, especially as renewable power is added to more local markets. He noted that while that may lower overall demand for gas, it actually increases peak load demand for gas. Storage can help that, and they are investing heavily in storage, including by buying storage. More electrification and LNG exports will also increase the need for storage.

     Charif Souki, CEO of Tellurian, and CEOs of Woodside, Shell, and others see LNG demand growing in the coming years including 2023. Europe will continue to need increased amounts of LNG. Asian demand is expected to grow. Chinese demand is expected to keep growing at high rates even with Chinese economic growth rates adjusted downward. Billionaire, or once billionaire, Souki claims he had a bad experience with China, does not trust them to keep to deal terms, and simply won’t deal with them, preferring to deal with other Asian countries instead.

     Government support for the oil and gas industry, however, is in question. The U.S. Dept. of Interior has delayed its five-year oil and gas leasing plan till the end of the year, 18 months after it was expected and 3 months later than requested in a lawsuit filed by industry groups led by the American Petroleum Institute (API) after a previous delay, even though the lease sale is required by law. The leases will only be in the Gulf of Mexico and will apparently consider one option of allowing no leases at all. It seems the Dept. is flirting with punitive measures through considering no leases. These delays and considerations increase uncertainty among those wishing to develop those resources. Such actions are not conducive to a timely and economically favorable development of needed American resources. Some of those investment dollars may well get diverted to non-American regions. I do not think this is good energy policy. Senator Joe Manchin blamed the administration’s “radical climate agenda” for the delay, also noting that all previous administrations, Republican and Democrat, have abided by the mandate required by the Outer Continental Shelf Lands Act in a timely fashion. I agree wholeheartedly with Manchin on this issue.

     Meanwhile, the UK and Europe imposed temporary windfall taxes on record profits of Big Oil companies and Biden wants to tax stock buybacks by Big Oil companies in the U.S. Does he have a point? I don't know but I do know that with the current lower oil and gas prices those levels of profits will drop considerably, and near-term future stock buybacks will likely be much smaller than last year. Even so, several CEOs have indicated that they will continue to focus on shareholder returns including stock buybacks. Oxy's Vicki Hollub and Chevron's Mike Worth both indicated that stock buybacks will continue. Chevron is implimenting a massive $75billion buyback. On one hand these may help out the ailing stock market. On the other hand, they will take away from needed investment in new supply. oil is likely to remain close to current pricing. Personally, I would like to see lower gasoline prices, but I understand that is not likely. I just hope they don's spike up high again. U.S. oil production is likely to rise modestly, by about 500,000 barrels per day, led by the Permian Basin. Hollub also expects the administration to wait until oil prices come down, which could be a few years from now, to buy more oil to refill the SPR, or just add small amounts through time. The situation is perhaps not what the government (or we consumers for that matter) would consider ideal, but the oil producers are in good financial shape to buy back stock and increase dividends, so shareholders are benefitting. while some of those shareholders are those with 401Ks, many are those that are already wealthy investors so one can argue that the oil companies' approach is most beneficial to those who are already wealthy and most detrimental to those consumers who are poor. However, gasoline prices are also dictated by things like refinery capacity that is influenced by other issues like ability to upgrade for sulfur regulations. Pioneer Natural Resources CEO Scott Sheffield went so far as to say that the U.S. won't 'ever again' reach a record in new oil production. He, like Hollub, believes that prices will remain close to what they are now, or slightly higher, and that one control is simply that we are maxed out on our refining capacity. he also thinks if we drill more, then service company prices will rise accordingly, and he also noted that the inventory is not there. That is perhaps a bit concerning and segways to the next paragraph which addresses some issues about possible other sources of new U.S. oil supply.  

     Another upcoming decision by the Biden administration that pits the environmental groups that hold significant sway with him against U.S. energy development is whether the Willow Project in Alaska will be approved. Senator Dan Sullivan of Alaska argued, I think decisively, that the project’s environmental impact statement has deemed it one of the most environmentally responsible and lowest carbon emissions projects of its kind in the world. He also noted that it has very strong support among the indigenous Alaskan population and among unions workers. He pointed out the obvious hypocrisy of restarting imports of Venezuelan oil which has a very poor environmental record and profits a corrupt regime with a poor human rights record and one that befriends our adversaries. He noted that the Willow Project and others like it aid U.S. energy security. He also said that those environmental groups are not considering the rights and opinions of Alaskans. Conoco’s CEO said he is hoping for approval but expecting denial. The administration may opt to limit the size of the project which could affect economic viability to the point where the project could be abandoned. This is another “no-brainer” decision that is being hijacked by radical groups where the outcome they desire will likely result in more overall world pollution and carbon emissions. There are numerous examples of outcomes such as this. Hopefully, common sense will prevail.

     Energy Secretary Jennifer Granholm just made some remarks at CERAWeek: “we know that oil and gas is going to remain a part of our energy mix for years to come.” “Even the boldest projections for clean energy deployment suggest that in the middle of the century we are going to be using abated fossil fuels.” “It should not take over a decade to get permitting for a transmission project on federal lands.”

These statements are sensible and do not support the logic of denying emissions-conscious American energy projects in favor of emissions-indifferent projects from adversarial countries.

 

 

References

 

EQT CEO Sees US Natural Gas Market Balancing Later This Year. Bloomberg. March 7, 2023. Watch EQT CEO Sees US Natural Gas Market Balancing Later This Year - Bloomberg

 

Williams CEO Armstrong on Natural Gas Pipelines, Storage. Bloomberg. March 7, 2023. Watch Williams CEO Armstrong on Natural Gas Pipelines, Storage - Bloomberg

 

Developer Of Revolutionary Carbon-Capturing Power Plant To Go Public Via SPAC With Gas-Fracking Rice Bros. Christopher Helman. Forbes. December 14, 2022. Developer Of Revolutionary Carbon-Capturing Power Plant To Go Public Via SPAC With Gas-Fracking Rice Bros (forbes.com)

 

NET Power’s First Allam Cycle 300-MW Gas-Fired Project Will Be Built in Texas. Sonal Patel. Power Magazine. November 10, 2022. NET Power’s First Allam Cycle 300-MW Gas-Fired Project Will Be Built in Texas (powermag.com)

 

Biden admin quietly delays major oil, gas leasing decision. Thomas Catenacci. Fox News. March 8, 2023. Biden admin quietly delays major oil, gas leasing decision | Fox News   

 

Biden admin facing calls to approve major Alaska oil project. Fox News. March 8, 2023.Biden admin facing calls to approve major Alaska oil project | Fox News Video

Charif Souki on Outlook for Energy. Bloomberg. Charif Souki on Outlook for Energy | Watch (msn.com)

Oil CEOs are doubling down on buybacks as Biden budget seeks to quadruple tax. Eric Rosenbaum. CNBC. March 8, 2023. 

U.S. won’t reach a new record in oil production ‘ever again,’ says Pioneer Natural Resources CEO. Ian Thomas. CNBC. March 9, 2023. U.S. won't reach new record oil production 'ever again': Pioneer CEO (cnbc.com)

Home Heating in the U.S. – Electrification Has Limitations and Hydrocarbons Have Some Advantages

 

     This post is in commentary to a recent Washington Post article – America’s great home heating divide, visualized. The article shows home heating sources in detail on a map of the U.S. and how they vary by region. There are several reasons for these variations. The sources of home heating are natural gas, electricity, propane (or more accurately LP gas), home heating oil, and wood. I have used all these sources for home heating at one time or another with the exception of home heating oil, although when I moved into one house there was an oil furnace there. However, we decided not to use it and sold it, using a second wood burner instead. After a year of heating with wood and one chimney fire, we installed LP gas piping and unvented heaters and later only occasionally supplemented with wood in the fall and spring. The LP gas under this setup works great and is entirely immune to power outages, which are more common out here in the “boonies.” In the next place I heat with an air-source heat pump. The cost savings are significant and great but when the power is out there is no heat and when it gets very cold, below 10-15 deg F, it does not perform adequately and must be supplemented with another electric heater and/or a small propane heater. The air conditioning costs are very low and quite satisfactory.

     The graph below is perhaps a bit misleading since it suggests that electric heat may be more widespread. However, the second graph below shows that natural gas is the dominant heating source by far. If one adds all the hydrocarbons together: natural gas, propane, and heating oil, then hydrocarbons, or fossil fuels, make up 56% of U.S. home heating vs. 40% for electricity. If one then considers that natural gas, coal, and oil make up about 61% of U.S. electricity grid power, then one might say that fossil fuels are really responsible for about 80.4% of home heating, with natural gas alone making up about 62.2%. I mention this since the Washington Post article talks about shifting away from fossil fuels, presumably to electricity, which is currently 61% fossil fuels.   

Prevailing Home Heating Sources: Red = home heating oil. Purple = natural gas. Light blue = propane. Gold = electricity. Brown = wood. (The map is interactive in the article and can be zoomed to see different areas in more detail). Source: America’s great home heating divide, visualized. John Muyskens, Shannon Osaka, and Naema Ahmed. Washington Post. March 6, 2023. How Americans heat their homes, from electric heat pump to natural gas - Washington Post

Energy sources of U.S. Home Heating. Source: 2017-2021 American Community Survey.

 

     Electrification makes sense in some areas and situations, less in others. In the U.S. Southeast where winter temperatures are generally mild, electric heat has long been favored. Cold snaps do happen, but typically electric heat is enough to take care of them. However, even there during the cold snap of late December 2022 the grid was stressed and rolling outages had to be implemented in the territories of Duke Energy and Tennessee Valley Authority. That suggests that even there where winter demand is generally lowest, the current grid is not adequately prepared to handle extreme cold snaps. In Texas, with the cold snap of 2020 one might argue that the natural gas system was ill-prepared, and while that is true, if that increased demand had to be met with electricity alone the situation would have been magnitudes worse. The problem there is that the natural gas system is not adequately weatherized. Electrification does make sense economically in the U.S. Northeast where expensive, polluting, and high carbon emissions home heating oil is a major source of home heating. However, it can be too cold for heat pumps so some of the cost advantage is lost by needing a backup heat source in cold events. In some areas heat pumps may be a good choice for replacing propane heat which is a little bit more expensive than natural gas.

     With ambitious pledges and mandates for lowering carbon emissions the push to electrify home heating, building heating, and transportation could result in significant increases in electricity demand. The U.S. Northeast in New England currently powers 46% of the grid with natural gas and 11% with renewables. According to decarbonization plans they want to change that by 2040 to 12% natural gas and 56% renewables. That is a very tall order. In addition to this switch, it is expected that some nuclear, coal, oil, and hydro plants will be retired. Also, in addition will be the increased demand from electrified heating and transport. Thus far, offshore wind, the main hope for the switch, is behind schedule. In New England as of the end of 2021, about 39% of home heating was from natural gas, about 33% from heating oil, about 16% from electricity, about 8% from propane, and about 3% from wood. ISO-New England predicts that by 2031, a little less than 8 years from now, the shift to heat pumps will increase demand from 68MW currently to 1899MW. The predicted demand increase from EVs is from 38MW to 1535MW. In total from those two sources the change is expected to go from 106MW to 3434MW, or 3328MW in new demand. The New England grid is already stressed. Winter reliability has been achieved for several years now by burning oil in power plants (often triggering air quality alerts), by importing expensive LNG (often on the spot market from foreign sources due to nonsensical Jones Act requirements), and by paying a lot more for the natural gas that does come by pipeline. The result is very high electricity costs, especially in the winter. If cold snaps would come that are colder and longer the grid may not be able to handle them. This is a problem in other areas as well, but accelerating electrification will no doubt exacerbate the problem. With an increase of intermittent sources on the grid the reliability will be stressed even further. Just to integrate the planned increases the grid will need to be upgraded significantly, which is a slow and cumbersome process. The reality is that those natural gas plants will likely remain operational as the renewables are increased, just less utilized. That will make the natural gas generation necessarily less efficient, more carbon intense, and more expensive to operate and maintain.   

     The WaPo article also mentions the irony of the states that have high natural gas home heating being the ones advocating for natural gas bans in new homes and buildings. The non-profit advocacy group Rewiring America is advocating for natural gas bans and for heat pumps to replace fuel oil and propane, although I have read recently that their leaders have started quite a few well-funded for-profit companies to be aided by those pushes and by the IRA. The IRA does have tax credit provisions to help with heat pump installation. I will note, however, that I saved a few thousand dollars, by using a contractor that was qualified with heat pumps but not certified under the federal program available at the time in 2018. My installation was significantly cheaper than it would have been with the other installers even with the rebates at that time. I am not sure if this is still the case but even with tax credits the upfront costs can price many would-be switchers out of the market. Another issue of some concern is the lifetime of an air source heat pump (I was told 12-15 years and I’m hoping longer) vs. the lifetime of another type of electric furnace, a natural gas, or a propane furnace, which can exceed 30 years in some cases. I do like its low operating cost compared to the previous electric furnace, especially the low-cost A/C, as well as its lower noise.    

 

References

America’s great home heating divide, visualized. John Muyskens, Shannon Osaka, and Naema Ahmed. Washington Post. March 6, 2023. How Americans heat their homes, from electric heat pump to natural gas - Washington Post

The Heat Is On - Is New England Headed For An Electricity Supply Crisis? Housely Carr. March 6, 2023. RBN Energy.  The Heat Is On - Is New England Headed for an Electricity Supply Crisis? | RBN Energy

Modularity in Construction Manufacturing and Deployment is Cost-Effective, Efficient, Aids Standardization, Simplifies Construction, Simplifies Maintenance and Lowers Environmental Impact, Waste, and Emissions Intensity

 

     Modularity refers to manufacturing components in modules of generally smaller or manageable size for large construction projects to be assembled on-site. It has many advantages and some disadvantages as well. One disadvantage in rare cases might be overall project cost, compared to larger projects. I am thinking nuclear reactors in this example, where a larger reactor may be more cost-effective than banking many smaller reactors. However, other advantages of modularity may even costs out over time. In fact, modular construction is most often cheaper. Time itself is another advantage of modularity. Smaller modular projects are much more likely to be built on time and in line with cost projections. Modularity can be useful for a wide variety of construction projects.

     Modularity in construction is also referred to as prefabrication. One clear advantage is affordability. Another is efficiency. One clear efficiency advantage is that factory work and site work can take place simultaneously and without each getting in the way of the other. The result is faster construction time. Another advantage is better access to skilled labor. There may also be better access to raw materials and logistics, including rail cars. Modular construction can drastically reduce on-site waste which can also increase site safety and security. Modular construction can reduce construction delays due to weather. Workers can be more productive, comfortable, and safe in the controlled conditions of a factory than on a construction site. Building offsite is better when an existing operating site is being added onto so that disruptions to ongoing operations at the site are minimized. Modules are installed rather than built on-site with added transport of people and tools to the site. One disadvantage of modular construction is transportation of the modular components to the site. They may be large and dangerous to move. Planning and logistics are very important in this regard. Installation may involve cranes and detailed maneuvers. Even so, those installations happen much faster.  

     The efficiency advantages of modularity are highest where components in high demand are able to be mass produced and where installations have become routine. Early phases of new technologies will be less efficient as learning curves are climbed.

     A disadvantage of modularity is that it does not allow for much customization so that design changes during construction cannot be accommodated. Of course, these are issues to be worked out in planning and logistics are less likely to cause problems when construction of the type becomes routine.

     The biggest modular industry by far is modular home construction which is well developed and provides quality housing at decent prices for single family homes. The use of digital technologies, lightweight materials, and improved manufacturing processes are making modular construction better, cheaper, and more sustainable. In the energy industries new modular construction is being considered for many types of power plants and energy processing plants. A 2019 McKinsey and Company report suggests that the U.S. and European modular construction industry could scale to $100 billion and offer $20 billion in savings over traditional construction. The report is focused on the modular housing and building industry. They note that successes in this industry have been occurring in Japan and Scandinavia. In the U.S. modular housing has had a bad reputation for many years but with better technologies, materials, manufacturing, and building standards the industry might be due for a big upgrade.    

     In the nuclear industry there are ongoing pilot demonstration projects and proposed and permitted commercial projects for small modular reactors (SMRs) and nuclear power ships. SMRs can be built by those who build oil refineries and petrochemical plants since many of the same processes are required: steel construction, metals fabrication, tanks that can withstand pressure, welding, etc. Power ships can be built at shipyards by shipbuilders who also do many similar processes and of course, the ship part. These projects are new, slow to build, and it will take some time before the advantages of modularity are realized.

     New buildouts of hydrogen and carbon capture and sequestration projects will also likely benefit from modularity as time goes on. However, like advanced nuclear, these are also new industries in pre-scale up phase so the advantages of modularity will take time to be realized.

     Modularity can be better able to take advantage of location. An example is the newly planned modular oil refineries in the Permian Basin region of West Texas, that have just received permits to build. These refineries will process the light sweet West Texas crude oil produced from the shales.  

 

 A 3-D model of the Ultrafuels Plus 210M refinery site plan. The red is the processing unit and the blue is the carbon capture and power generation units. Source: AAPG Explorer   Modular Oil Refineries Solve Efficiency, Environmental Problems. Heather Saucier. AAPG Explorer. February 2023. Modular Oil Refineries Solve Efficiency, Environmental Problems (aapg.org)

Building small and very close to where the oil is produced will yield cost advantages and emissions reduction advantages. These will reduce the amount of oil that needs to be exported to overseas refineries that have more refinery capacity for this type of crude oil. Most of the large U.S. oil refineries were retooled at significant cost to process heavy sour crude during the oil crises of the 1980’s. they make hydrogen and transportation fuels like gasoline, diesel, and jet fuel. After shale discoveries of light sweet crude, it became advantageous to export that crude. Currently we export about 3 million barrels a day of light sweet crude and import 7-8 million barrels a day of heavy sour crude. Gerry Obluda, owner at Polaris EPC Inc. and co-owner Jerry Nodier, will build the West Texas refineries this year using its own technology called UltraFuels. Obluda notes that it is very inefficient to have to export what you produce rather than refine it here at home. Obluda worked with former president and manager Michael F. Milam at Calumet Specialty Products Partners refinery in San Antonio, Texas. They began brainstorming. To quote from the AAPG Explorer article referenced below:

 

“As Obluda and Milam brainstormed, they knew that light, sweet crude has an ideal boiling-point range to make transportation fuels and that it requires less energy to refine. They also knew that building refineries tailored for light crude outfitted with new equipment that complies with current emissions standards would only add to their efficiency.”

 

“A smaller refinery that processes 10,000 to 20,000 barrels a day would require only state permitting, allowing them to be built in a quicker timeframe. And, a smaller volume of oil would not overwhelm the surrounding markets on either the crude supply or finished product sides.”

 

They plan to add carbon capture from furnace stacks and amine absorption for the CO2 byproduct. They also plan to reduce criteria pollutants such as particulate matter, carbon monoxide, nitrogen oxide and sulfur oxide. Refining represents about 13% of U.S. industrial emissions and process emissions (from refining crude for transportation fuels) responsible for nearly a third of that 13%. The owners think that the refineries’ strategic advantages will help offset the costs of the carbon management system.

     They note that a 10,000 barrel per day refinery can be about 75% modular so that pumps and piping can be built in a factory that allows for higher quality control and faster construction times. Heaters and towers must be built on-site. A refinery that processes more oil than that will have to sacrifice some modularity. Like some of the modular nuclear projects they are using existing technologies but just putting them together a little differently. They expect construction to take about 20 months and the refinery is small enough that it could be disassembled, packed up, moved, and reassembled after the oilfield becomes depleted. The oil is expected to be used for diesel that fuels Permian Basin operations which currently get theirs from Gulf Coast refineries. The Co2 can be used for local enhanced oil recovery, Currently, that CO2 is shipped from New Mexico and Colorado. There are existing local markets for gasoline and jet fuel as well. Larger refineries in the U.S. are very old, too outdated to be reconfigured for light sweet crude. The different components in those old refineries are too far apart do effective carbon capture and within each unit they are too close together to fit in effective carbon capture systems. These new types of small modular refineries can become a model for other countries and areas as well. Smaller companies can build and operate them where new oil fields are being developed. If successful and that seems likely, this could become a trend in modularity.  

     In many cases modularity is ‘stackable’ in that many modules can be banked or stacked together to increase size. This is true with battery banks and can be true with power plant components, modular nuclear reactors and in other modular construction. Some advantages to that include maintenance where one module can be serviced at a time so that maintenance does not require a whole plant to go down. Another advantage might be in decommissioning, which can happen one module at a time. One small modular nuclear developer plans to simply add a new modular reactor after the lifespan of the previous one is finished, also allowing a certain amount of time for it to continue cooling before removing it.

     Power plants, oil field operations, or microgrids may utilize truck mounted gas reciprocating engines, or “gen sets” for power. These are often factory-built modules delivered to site ready to go. GE has a modular factory-assembled quick construction, quick start turbomachinery solution for gas peaker applications, oilfield operations, or other grid stability or power needs. Their LM2500XPRESS is a modularized plug-n-play design that is 95% factory assembled and can be installed for grid applications in 13 days by 20 people. These aeroderivative gas turbines can be banked as a series of ten 34MW modular units in a simple cycle or integrated into a combined cycle to deliver 47MW each with up to 54.4% efficiency. These can be installed in months rather than years to help with emergency grid needs. This efficiency is not quite as high as the new state-of-the-art H-class turbines that can reach up to 65% efficiency in combined cycle, but for something so easily deployable is quite an accomplishment. These turbine sets are used by Evolution Well Service and offer the highest efficiency for E-fracs in the oil and gas industry.   

    

      

References:

Modular Construction: Pros and Cons. Let’s Build. March 10, 2022. Modular Construction: Pros and Cons - LetsBuild

Modular construction: From projects to products. Nick Bertram, Steffen Fuchs, Jan Mischke, Robert Palter, Gernot Strube, and Jonathan Woetzel. McKinsey & Company. June 2019. Modular construction: From projects to products (mckinsey.com)

10 benefits of modular construction. Vertis. 10 benefits of modular construction | Vertis Buildings

Modular Oil Refineries Solve Efficiency, Environmental Problems. Heather Saucier. AAPG Explorer. February 2023. Modular Oil Refineries Solve Efficiency, Environmental Problems (aapg.org)

Natural Gas and Decarbonization: Key Component and Enabler of the Lower Carbon, Reasonable Cost Energy Systems of the Future: Strategies for the 2020’s and Beyond. Kent C. Stewart. March 2022. Amazon Publishing.

Advanced Nuclear: An Overview. Kent C. Stewart. Blue Dragon Energy Blog 2.0. February 7, 2023. Blue Dragon Energy Blog 2.0: Advanced Nuclear: An Overview (bdeb2.blogspot.com)

Energy Security: Vulnerabilities are Many and Complex

 

     Energy security is a key focus as a component of the so-called energy trilemma. The goal of energy security is to ensure access to affordable and abundant energy and materials that help in producing that energy, and to minimize and eliminate any disruptions to that access. Unfortunately, the world has several ‘bad actors’ and others who have some history of manipulation. Countries allowing themselves to become dependent on these actors and potential manipulators do so at risk to themselves and their economies. Energy and mineral endowments are a result of geography, and the current position of a country’s borders. As we try to position our world as one that respects territorial integrity and rejects military incursions and invasions to increase territory, we will likely be stuck with the borders we have for some time to come. Our main hope is that regimes will change within bad actor countries, preferably through peaceful revolutions or democratic reforms. Some countries could fragment. Thus, it is more likely that borders will change within troubled countries than beyond them. It is quite clear now that most of the world will not accept Russia’s seizing of territory through invasion and annexation. However, Russia is so entwined with the world economy through its vast exporting capacity of oil, gas, minerals, nuclear materials and expertise, and grain that complete sanctions cannot be enacted. The partial sanctions have already significantly disrupted Russia's economy but also the world economy.

     Another aspect of energy security involves securing energy and mineral supplies that meet environmental and labor standards. Greenhouse gas emissions standards are a factor as well. Supplies with unacceptable environmental and labor standards are currently being sold and bought in world markets. Environmental impact of Chinese rare earth minerals mining and processing, child labor and low labor and environmental standards in cobalt mining in the Democratic Republic of the Congo, forced labor in Chinese solar panel manufacturing, high methane emissions records in some countries like Russia, Turkmenistan, Libya, and Nigeria, labor and human rights exploitation in some of the Gulf State countries, and even health issues for coal miners around the world like black lung disease, mine collapses, and mining safety standards should be considered when evaluating where we get our energy supplies. In the case of coal pollution standards are a major issue so supplies with sufficient pollution abatement should be preferred.

 

 

Oil

Russia is a major exporter. What is happening now with tanker “ghost fleets” and profits kicking back to shippers and refiners is certainly not ideal. It does shift profits away from Russian oil companies to Indian and Chinese refiners and shippers as well as to shippers from the UAE and Greece. As Russian companies own percentages of those shipping assets, they recoup some of the profits and the Kremlin is siphoning some of those profits back into their war machine through increased taxation.

     Oil from Venezuela is set to flow again. The sanctioned Venezuelan regime was given a partial reprieve by the Biden administration due to high gasoline prices. The regime is still corrupt and quite friendly with U.S. adversaries. Iranian engineers are working to try and restart some of their neglected refineries for their abundant heavy oil. More Venezuelan oil could help with pricing eventually but the regime is likely to use any profits for their own benefit such as building up their military.

     Iran has long found means to work around sanctions and still ships oil illegally that affects markets. The Iran nuclear deal is effectively dead and they are close to achieving nuclear weapons capabilities, which is horrible. The sinister regime will need to be dealt with one way or another, whether through preemptive actions, regime change, or stepped up sanctions. Diplomacy, though still pursuable, is not really a viable option.

     Saudi Arabia and OPEC-plus, the plus being mostly Russia, has been uncooperative at times but mostly reasonable in trying to keep prices stable. Concerns like elevating the yuan over the dollar for oil trading are not likely to manifest. The U.S. does need to keep its good long-term relationship with the Saudis and make sure diplomacy addresses any disagreements that may arise.

 

 

Natural Gas

 

     The big story of 2022 in natural gas and energy security is of course Europe’s reliance on Russian gas, mostly delivered through pipelines owned and operated by Russian companies. Europe has successfully weened itself away from Russian gas although significant flows do remain and interruption of those flows could affect 2023-2024 winter supplies and prices in Europe. With new sources and supplies coming from increased Norwegian production, increased flows from Algeria, Azerbaijan, Turkey, and a few other countries, and LNG from the U.S., Qatar, and a few other Gulf States, the supply outlook has improved. A mild winter was very helpful to Europe and very unhelpful to obvious Russian plans to squeeze Europe into energy submission. The Russians had been manipulating flows to Europe for a few years previous to affect pricing and flex their energy monopoly. Thankfully, their leverage is now much reduced. Russia has quite a long history of weaponizing energy, and we should all be thankful that their ability to continue this obvious hegemony is disintegrating. Before Russia’s invasion they were ready to make all kinds of deals with Europe to increase gas supplies and even to make and deliver hydrogen to the EU. As Russia has little interest in mitigating methane emissions and is low on the environmental integrity scale, that would have been a hypocritical mistake by the Europeans, as I argued in my 2022 book, Natural Gas and Decarbonation. However, it is also true that pipelined gas has much lower carbon emissions than LNG, so the EU’s carbon emissions inevitably rise when Russian pipelined gas is replaced by LNG from any source.    

 

 

Nuclear and Uranium-Enrichment

 

     As many European and other Western countries turned away from nuclear power the Russians developed an expertise with building and operating reactors and enriching nuclear fuel so that they are the world’s major provider of those services. 40% of the world's nuclear reactors rely on fuel with a higher level of uranium enrichment. Russia is the major supplier of that higher enriched fuel. They are also a major supplier of mined uranium. With nuclear and uranium-enrichment, it is again Russia that has more leverage and control than much of the world would like. Russia’s state-owned nuclear power company Rosatom has been exempted from sanctions due to many countries’ dependence of Russia for their nuclear power production. Quite a few countries are dependent on Russian-made nuclear reactors, now and in the future. Reaching out to 2040, in the EU the highest dependence on Russian reactors will be Hungary (78% of electricity) and Bulgaria (37% of electricity). Beyond the EU, Armenia (111%) and Sudan (96%) have the highest dependence. Both of these countries abstained in the recent UN vote to condemn Russia’s invasion of Ukraine. The levels of collaboration with Rosatom do vary by country. Some, like Spain, are only dependent on Russian nuclear fuels while others are dependent on Rosatom for reactor construction and operation. Rosatom has made a very good business providing turnkey nuclear services. This information comes from a new paper in Nature Energy by Kacper Szulecki & Indra Overland. In the paper they develop a kind of score based on different interdependencies with Russia on nuclear cooperation, noting both that Rosatom’s collaborations provide soft power influence for Russia as well as welcomed assistance in developing low carbon energy resources in an economic manner by outsourcing for Russia’s nuclear expertise. The authors note that while Western countries are and will continue to turn away from Russian nuclear collaboration, the question is whether non-Western countries will do the same. Their analysis came up with 14 countries with medium or high nuclear collaboration with Russia and 7 of those countries did not vote to condemn Russia’s invasion. The countries with the highest levels of nuclear cooperation with Russia in order from higher to lower were deemed to be Iran, Belarus, India, China, Egypt, Hungary, Turkey, Spain, Armenia, Bulgaria, and Slovakia.

 

Data Source: Russian nuclear energy diplomacy and its implications for energy security in the context of the war in Ukraine. Kacper Szulecki & Indra Overland. Nature Energy. February 27, 2023. Russian nuclear energy diplomacy and its implications for energy security in the context of the war in Ukraine | Nature Energy

 

Rare Earth Elements

 

     Dependence on China is the major concern with rare earths as their monopoly on mining and processing these minerals is quite considerable. They also have a monopoly on making the magnets necessary for wind turbines and EVs. While other countries including the U.S. are working to increase their REE production and processing capabilities, China also has the advantage that their REE industry is strongly subsidized by their government which keeps REEs cheap for all compared to other sources. Thus, weening off of China for REE’s will be costly. The U.S. and other countries are developing some REE mining and processing capabilities and there have been some important new finds such as the one in Sweden recently announced. However, those sources will take many years to come online and make a dent in China’s monopoly. There is also the issue of environmental impact in China’s REE ops which is significant. This has been little addressed and shrugged off by renewables advocates.

 

 

Critical Minerals

 

     Critical minerals are found all over the world, but Russia and China do have big market shares. Other situations like Congolese cobalt production that makes up a large amount of global cobalt production are beset with human rights and labor concerns. Again, this has been inadequately addressed by renewables advocates. Lithium, copper, and nickel make up the bulk of critical minerals, about 80%. Cobalt, manganese, graphite, and REE’s make up the bulk of the rest of critical minerals. Disputes between countries and mining companies will likely intensify as extraction intensifies. We have already seen some of that in places like copper mining in Peru and Chile and lithium mining in Bolivia. Developing better environmental standards for extraction will also be important. Russia is a major supplier of nickel so the same issues with sanctions will apply as they do with other commodities.

 

 

Lithium

 

     Lithium has far less exposure to energy security issues than do critical minerals in general and energy. The major lithium producing zone is the so-called Lithium Triangle in the Atacama Desert region which encompasses parts of Chile, Argentina, and Bolivia in South America. This area is thought to contain half of the world’s lithium reserves, although several major new finds have been reported in recent years and months. Lithium, as a major critical mineral, is being pursued domestically by countries in North America and other places to develop domestic supplies to hedge against potential supply and price disruptions from other parts of the world.

                                                            

 

Solar Panel Production

 

     We know that forced labor against the Uyghur population is being used by China to produce solar panels in Xinjiang province, where about 45% of the world’s polysilicon used for solar panels is produced. Polysilicon is made from mined quartz or quartz sand. The forced labor assertions are in addition to the internment and re-education of the Uyghur Muslim population in Xinjiang province, an autonomous region in Northwest China. Forced sterilization of Uyghur women has also been reported.

 

 

Nitrogen Fertilizer

 

     The bulk of the world’s synthetic fertilizer is made from natural gas and the nitrogen in the air as part of the Haber-Bosch process. Russia’s clout as a fertilizer supplier has dropped due to the sanctions. The sanctions have also strongly affected fertilizer production in Europe and elsewhere due to the high cost od natural gas, so much so that plants were shut down and some closed with operations moving elsewhere. The current lower natural gas prices are a reprieve for that situation but if they rise again the same problem will arise. That is another reason to support adequate natural gas supply.

 

References:

 

EU reliance on Russian nuclear undermines energy security goals. Nour Ghantous. Energy Monitor. March 2, 2023. EU reliance on Russian nuclear undermines energy security goals (energymonitor.ai)

 

China uses Uyghur forced labour to make solar panels, says report. BBC News. May 14, 2021. China uses Uyghur forced labour to make solar panels, says report - BBC News

 

Russian nuclear energy diplomacy and its implications for energy security in the context of the war in Ukraine. Kacper Szulecki & Indra Overland. Nature Energy. February 27, 2023. Russian nuclear energy diplomacy and its implications for energy security in the context of the war in Ukraine | Nature Energy

Vermont Slate from a Geological Perspective: How Was One of the World’s Finest Slates Formed?

 

     Slate from Southwestern Vermont and across the border into New York State is touted as the best quality slate in the country and sometimes the world. Its uses range from roofing slate to floor tiles, flagging stones for patios, cladding for buildings, fireplace mantles, stairs, counter tops, windowsills, monuments, statues, tubs and sinks, and no doubt a few other uses. Slate is a metamorphic rock, typically a fine-grained shale or mudstone that was metamorphosed, or changed, by intense heat and pressure so that very distinct fracture cleavages exist at regular intervals that can be easily split into thin sheets. The straight planar surfaces of the individual pieces after splitting remain strong and firm. The shale/mudstone beds were originally laid down horizontally in quiet waters over millions of years. Later they were folded, tilted, and subjected to intense heat and pressure.

     The story of how the Vermont Slate was formed is a complex one that involved many dedicated and keen geologists to unravel over many years. To convey the whole story, one needs to understand and communicate quite a few different geological concepts and processes. The story begins out into the ocean, what is called the Iapetus Ocean that first formed about 700 million years ago. About 160 million years after that, or 540 million years ago, that ocean switched directions and began to close, creating what is known as an Island Arc System. At the mid-ocean ridge where the ocean had first spread apart making a spreading or divergent boundary of two tectonic plates, the stress forces acting on the plates gradually changed. The plates began moving together now making a convergent plate boundary. The plate to the west began to subduct or push under the plate to the east. As the lower plate’s oceanic crust was pushed down further into the mantle the rock cooked and removed volatiles. This caused sections of the overriding mantle to melt, and the magma moved upward. These new hot spots in the mantle formed volcanos. When more of the ocean crust moved over the hot spots new volcanos formed which made a series of volcanic islands. This new chain of islands was in the shape of an arc. The Hawaiian Islands and the Aleutian Islands are examples today of island arc systems with new islands being created by volcanic activity as the plates move over hotspots.

     For the next 70 million years or so the island arc system named Ammonusuc carried an island continental mass toward what was then the east coast of North America about 60 miles or so inland what it is now. Geologists now call the ancient North American continent Laurentia. The shales and mudstones that make up the Vermont Slates were originally deposited on the continental shelf, slope, and rise which proceeded further offshore of the passive eastern continental margin of Laurentia. Rocks further offshore were deposited slowly in small amounts in low energy conditions in quiet water. As the island arc system moved closer to Laurentia it began to push onto Laurentia causing its rocks to buckle and deform. This was the beginning of the Taconic Orogeny, or mountain-building event, which pushed up these rocks onto the eastern edge of Laurentia. The mudstone rocks that make up the slates would later be folded intensely again by thrust faulting and undergo low-grade regional metamorphism which changes the crystal structure of the rocks and creates cleavages aligned perpendicular to the compressive forces acting on the rocks. Thus, since the compression is oriented more or less east-west, the cleavage planes are oriented more or less north-south at different angles. Metamorphic rocks have a characteristic called foliation or repetitive layering which is caused by differential pressure or shearing forces acting on the rocks. The Vermont slates have millimeter-scale foliation. The “slaty cleavage” is caused by fine-grained flakes of clays regrowing in places perpendicular to compression. This cleavage allows the slate to be split into thin sheets parallel to the foliation, a rock property known as fissility.     

 

Image Source: Wikipedia. Entry: Taconic Orogeny

 

     Those Cambrian and Ordovician mudstones and shales would be pushed about 100km westward as Ammonusuc system collided with Laurentia and later by a series of thrust faults. The island arc system, or micro-continent as they can also be called, accreted or joined the ancient North American continent adding new land to Laurentia to the east of a line known as Cameron’s Line running north-south through central Connecticut, Central Massachusetts, and central Vermont. Modern day New Hampshire and Maine were once part of the Ammonusuc island arc system. This line marks the surficial part of the suture zone of the two continents. They would also later be intensely folded and buckled by a reactivation event, and then metamorphosed by heat and pressure in one or possibly two metamorphism events. Finally, after rocks at the surface were eroded the metamorphic slates were exposed at the surface.

     In 1972 E-An Zen proposed a three-deformation chronology of the slates of Western Vermont- dates are tentative: Event 1) at Trenton time, Middle-Ordovician - involved large-scale soft rock submarine gravity sliding. Turbidites slid to the west into a geosyncline that began to develop from the Taconic Phase. Event 2) Late-Ordovician to Early Silurian – isoclinal recumbent folding. Formation of slaty (early) cleavage, emplacement of the Sudbury slice and the Florence nappe, and low-grade regional metamorphism. Event 3) Devonian Acadian – small-scale (tens to hundred meters) upright or overturned recumbent folds with shallow plunging, north-trending axes. These folds refolded the early slaty cleavage and there was possibly a second metamorphic event in higher-grade areas along the Taconic Range. 

 

The Vermont Slate Belt on the Taconic Allochthon, It’s Extent and Characteristics

 

     The Taconic allochthon is about 200km long and 25km wide and encompasses part of Southwestern Vermont, Northeastern NY, and Western Massachusetts. This is where the Vermont Slates are deposited, or rather have been re-deposited after movement. The area is just west of and alongside the north-south trending Green Mountains, or Green Mountain anticlinorium. The outcrops consist of rocks of two different ages. An allochthon is a section of rock that was moved from its original position via a thrust fault, a type of reverse fault associated with compressive forces where one body of rock faults and moves at low angle laterally across another body of rock. Allochthonous rocks may also include beds that are steeply folded or overturned, which can complicate unraveling geologic history. The cleavage of the Vermont Slates is high angle, from 30 to 90 deg. 90 deg cleavage is equivalent to being stacked vertically, on their sides like books on a bookshelf. The cleavage planes are generally parallel to the dip of the rocks, which is to the east. However, I believe some of the overturned folds may lean or dip westward. The rocks of the Cambrian St. Catherine formation include the Mettawee Slate, also known as the Bull Formation. This rock occurs at surface at the center of the slate belt making up about half of the slate outcrops. It is reported as being 49-312 ft thick. Purple and greenish gray slates alternate. The greenish gray slate thickness range is reported at 98-197 ft and the purple slate at 39-49 ft. There are occasional dark red slates as well. The Mettawee/Bull Slate has well developed cleavage and makes good roofing slate. The Ordovician aged Indian River and the Poultney formations, both slates, are younger than the St. Catherine Formation. They outcrop on both sides of the St. Catherine/Mettawee/Bull and make up the other half of the slate outcrop belt. The color of the Indian River ranges from red to green to blue green. It also has well developed fracture cleavage. It ranges from about 82-180 ft thick. The Poultney Slate occurs above the Mettawee and below the Indian River. Its thickness varies quite a bit due an angular unconformity which allowed much of it to be eroded away. Unconformities often involve sections where rocks are missing due to erosion so that time is also missing. The range of thickness of the Poultney Formation in this area is between 0 and 700ft.

     The Vermont Slate quarry region that is active today is quite small and well-defined. Its extent is about 1.5 miles wide and 12 miles long and occurs in the Poultney Valley in Rutland County, Vermont. The region makes up 1.8% of Rutland County and 0.18% of the State of Vermont. According to a paper prepared for that Vermont House Committee on Natural resources, Fish, and Wildlife in 2019, there is “no risk of slate quarries emerging elsewhere.” I really do not know how they arrived at that conclusion. It could be economics or slate quality and ease of extraction within the general area. I do know that in some places in the world slate is mined rather than quarried, which likely involves more waste rock and environmental impact. The steep dips of the Vermont deposits may lend them more suitable to quarrying than mining.

Geologic Map Showing the Outcrops Along the Taconic Allochthon. Old Vermont Geological Survey Map. The Area to the West of the Taconic Klippe Trace Makes up the Taconic Allochthon.

Areas of the Slate Belt Quarried Historically. Source: Slate deposits of Vermont & New York. Roofing Slate Dictionary.

Area Quarried Today. Source: Vermont’s Slate Industry and Act 250. Prepared for House Committee on Natural Resources, Fish & Wildlife. January 14, 2020

A Surface Geological Map from the Mobile App, Rockd. Pink is Bull Formation - Mettawee Slate Facies. Dark Green is Ordovician aged Poultney Formation Slate and Phyllite. Olive Green is Cambrian aged West Castleton Formation – dark gray and black slate and phyllite interbedded with limestone. Lightest Green is Late Ordovician aged Pawlett Formation – carbonaceous slate interbedded with quartz-plagioclase wacke. Gray is Bomoseen Graywacke member of Cambrian/Precambrian Bull Formation.

 

 

Color Variations Due to Mineral Content and Oxidation  

 

     As noted, there are several different color variations in the Vermont Slates including gray, gray green, blue green, purple, red, black, and mottled. Some sections of the slates are deemed ‘fading; and some deemed ‘unfading.’ This refers to the likelihood of color changes through oxidation due to weathering. The fading slates will typically turn to a more buff or tan color. Sometimes only part of the slates will fade, making a two-tone roof that people find aesthetically pleasing. These would be fading mottled slates. There is also an unfading mottled slate that has stunning variations of green and purple that make each tile look like a unique work of art. A few of the fading grades are prone to excessive oxidation and will have shorter lives as roofing slate. The unfading grades do not oxidize enough to make color changes. The slates that will weather the most have certain minerals like calcite and pyrite that will be more affected by oxidation when exposed to the weather.  

     Mineral content in the rocks is responsible for the colors. Red and purple slates are colored by hematite, an iron oxide. Green slates are colored by chlorite, a green clay mineral. Black and gray slates are colored by carbon. As noted, the different color grades are typically in different beds within the sequence and represent varying mineral contents of the different beds when the beds were formed. Geologically, the variations may have to do with different water depths, depositional rates, and biological content.

     Most slates around the world, including the highest quality slates in Wales and Spain, are black. The unique colors of Vermont slate give them an aesthetic advantage over other slates. Slates in general can be quarried and processed without the use of chemicals and too much energy expenditure in processing. They are considered environmentally advantageous in this regard. They are a little bit heavier than asphalt, but they last 6 times longer than asphalt. They have become popular with “green” builders. Although the highest quality roofing slates are considered to be those from Wales and Spain, the Vermont Slates have much better color variation and arguable aesthetic qualities that could confer them as the world’s best slate.

Unfading Mottled Green and Purple Slate from a Quarry in Operation for 150 years by Vermont Structural Slate Company. Favored for indoor uses. Source: Vermont Structural Slate Company Website. Custom Architectural Stone Projects | Vermont Structural Slate Co.

 

 

History of the Vermont Slate Industry     

 

     The 24 mile long Slate Valley that runs through Poultney is famous for slate quarries. Quarrying began in the 1840’s. The first slate-roofed barn built in 1848 is still standing today, slate roof intact. There are many other examples of the old slate roofs still holding out. Immigrants from Wales, Poland, Austria, Italy, worked the slate quarries in the past. As the slate roofing industry began in the 1850’s immigrants from Wales came where slate was quarried since 1399. The Vermont Slate was first used for school slates and slate pencils. A quarry in the 1840’s was producing 600 school slates per day. According to the Poultney Historical Society The current Vermont Slate industry is worth about $40 million, quite small by mining and materials standards. They also note that a requirement in California for non-flammable roofs has increased demand. There is also a demand center for slate in the U.S. Southeast.

     The local industry once employed 5000 people before the advent of asphalt shingles in the 1920’s began competing with slate. The production boom of Vermont Slate occurred between 1880 and 1920 when production was Other lower-grade slates as well as other roofing materials also compete. In 2000 there were 38 companies operating but now there are 20.

     10 quarries currently produce slate in Vermont and New York. Quarrying and milling employ about 300 people. Most are small family businesses with the exception of the Vermont Structural Slate Company which runs the Eureka quarrying and milling operation in Fair Haven. This is in contrast to Vermont’s granite and marble quarries which are owned by large corporations. Vermont’s family slate companies have been compared to family farms, getting low returns on investment and being barely profitable. The largest company, Vermont Slate Company, was recently acquired by Spanish Slate company Cupa Pizzaras S.A., I believe in 2021.

     The process of producing the slate involves drilling and blasting followed by manual splitting. There is some difficulty removing the blocks from the quarry due to the tendency of the rocks to split along cleavage planes. After drilling and blasting rocks are removed by power shovel, crane, or power boom, loaded onto a bucket, and moved to the milling area. Quarrying stops in the winter but milling becomes most active in winter. Different milling techniques are used for roofing slate than for flooring tiles and flagging. Both are cut by diamond saw and split to desired thickness. Floor tiles are run through a planer to get to uniform thickness. All other products are considered structural slate, including fireplace mantles, electrical panels, and windowsills.

     Some slate quarries are held in reserve as resources to be tapped if demand rises. While there have been some issues with opposition to slate quarries, those have been few. Some have opposed blasting but there have been no recorded or reported local damages from it. Others don’t like the conical piles of waste rocks. These rocks can be used for road aggregate and other uses, and are often donated. Some say the quarries lower property values, but it is one of the main historical industries in the area and the quarries do not take up that much space. One quarry, in operation since 1852 encompasses about 10 acres. It is a small industry that does keep some resources reserved. As a valuable and very functional building and aesthetic resource with environmental benefits compared to alternatives, those reserves should be protected as needed but also continuously developed.   

 

Image from Vermont Structural Slate Company Website Showing Work at a Slate Quarry. Custom Architectural Stone Projects | Vermont Structural Slate Co.

Image from Vermont Structural Slate Company Website Showing Manually Splitting Slate. Custom Architectural Stone Projects | Vermont Structural Slate Co.

 

 

General References (uncited) 

 

Taconic Orogeny. Wikipedia. Taconic orogeny - Wikipedia 

 

Slate. Vermont Department of environmental Conservation. Slate | Department of Environmental Conservation (vermont.gov)

 

Vermont’s Slate Industry and Act 250. Prepared for House Committee on Natural Resources, Fish &

Wildlife. January 14, 2020. Vermont Slate Industry and Act 250

 

Vermont Slate acquisition by the world leader in natural slate. Cupa Pizzaras. Vermont Slate acquisition by the world leader in natural slate | Cupa Pizarras

 

Slate Deposits and Slate industry of the United States. T .Nelson Dale. Series A, Economic Geology 63, Bulletin No. 275. U.S, Geological Survey. 1906. Slate deposits and slate industry of the United States | U.S. Geological Survey (usgs.gov)

 

Slate Colors and Characteristics ICS. National Slate Association. Slate Colors | National Slate Association

 

Slate deposits of Vermont & New York. Roofing Slate Dictionary. roofing slate dictionary - Slate deposits of Vermont & New York (schieferlexikon.de)

 

Cameron’s Line. Infographics, Maps, Music, and More. Blog by Rich Coffey. 2016.

 

Some Revisions in the Interpretation of the Taconic Allochthon in West-Central Vermont. E-An Zen. Geological Society of America Bulletin. 1972. 83 (9): 2573-2588. Some Revisions in the Interpretation of the Taconic Allochthon in West-Central Vermont | GSA Bulletin | GeoScienceWorld

 

Slate is Great: Geology of Poultney, Vermont. Gabrielle Lucci. STEM Fair Project 2020. Slate is Great: Geology of Poultney, Vermont (arcgis.com)

 

Geology of the western boundary of the Taconic Allochthon near Troy and the anastomosing cleavage in the Taconic Melange. Zong-Guo Xia. 1983. Unpublished Master Thesis. Abstract. University at Albany, State University of New York. "Geology of the western boundary of the Taconic Allochthon near Troy an" by Zong-Guo Xia (albany.edu)

 

Bedrock Geology of the Pawlet Quadrangle, Vermont. Robert C. Shumaker. Vermont Geological Survey. Bulletin No. 30. 1967. https://anrweb.vt.gov/PubDocs/DEC/GEO/Bulletins/Shumaker1967All.pdf

 

Slate. GeologyScience. Slate Rock | Properties, Composition, Formation, Uses (geologyscience.com)

 

Vermont’s Slate Industry. Poultney Historical Society. Vermont's Slate Industry - Poultney Vermont Historical Society (poultneyhistoricalsociety.org)

 

 

I Agree Wholeheartedly with Bernie Sanders’ Social Security Tax Proposal: I’m OK with Eliminating Entitlements to the Wealthy

     While I often disagree with the viewpoints of Bernie Sanders – on socialism, on energy, on corporations, and on foreign policy – I do agree with him on some issues like universal health care and taxing billionaires at a higher rate. I agree very strongly with the social security tax bill he has put forth. I think it is really about fairness. Another person I often disagree with politically, musician Roger Waters, once wrote in lyrics about money, “share it fairly but don’t take a slice of my pie.” There are tensions between fairness and greed, between generosity and miserliness. Most people that don’t have enough money tend to be very careful and frugal with it and protective of it. People with more than plenty are more likely to give away a portion of theirs simply because they can spare it. Maslow’s hierarchy comes to mind where helping oneself is a need lower on the pyramid and helping others tends to become a need only when one’s own needs are met. Even helping one’s own future, say in saving for retirement, often gets cut if one is not making enough money.

     The U.S. has a great Social Security system which helps people who are disabled and seniors after they retire. Every worker in the system pays into it. In most situations employers pay half of one’s gross income at 12.4%, or 6.2%, and the employee pays the other half, the other 6.2%. Those who are self- employed pay all of the 12.4%. Having been self-employed for almost 15 years I know this all too well. The self-employed also pay the full amount of Medicare taxes which amounts to 2.9% of gross income, where employers usually pay half, or 1.45%. All in all, the self-employed are typically responsible for 7.65% more taxes than the regularly employed. However, the self-employed get no advantage in receiving Social Security after they retire. They are simply penalized compared the regularly employed.

     After earning $160,000 in a year, one is no longer required to pay into Social Security. The rationale for this is that one already paid one’s share so that they shouldn’t have to pay in more than they will get out. I have had a few years in my self-employed career where I exceeded the amount, which was lower at the time, since it adjusts based on average wages. It was great! I was essentially rewarded for making more money. However, most years I have been well below that, in recent years very far below. The notion of rewarding the wealthy and punishing the poor can be considered a perverse kind of logic. The more money you make in a year the lower is the percentage of your SS tax. For an executive earning $16 million in a year in a company salary, their SS tax rate would be 0.062%, or 100 times less than mine (or 200 times less than mine as self-employed) The fact that I have to pay a much higher SS tax rate that is 100 to 2000 times or more than the super-rich, does not seem very fair.

     Looking just at income inequality, one can see that some of the super-wealthy make 1000 to 10,000 times more money than those at the bottom. Does that mean that they are 1000 times or 10,000 times more valuable as an employee? C’mon. Now, I am a firm believer in capitalism, but capitalism must be tweaked for fairness. One way to do this is making taxation equitable and fair. The simple fact that I pay I vastly higher percentage of my income for SS taxes than Elon ‘I shouldn’t have to pay taxes because I’m good at allocating capital’ Musk, is rather annoying.

     There has long been talk of the insolvency of Social Security, which now is solvent to about 2035. After that, if no changes are made the incomes drawn by retirees may have to be cut. There is a very easy solution to this that would prevent that entirely and add more to the pool so that retirees would be able to draw even more. Sanders’ plan would fund SS for 75 years and add $2400 to retirees’ annual payments. It does this without raising the basic rate for anyone, just changing the cutoff. Now, most income tax rates rise as one makes more income. Social Security does the opposite. The question might arise: Why not in addition to eliminating the cutoff, also raise the SS rate on people who make even more money. Hey, I kinda doubt I will ever make $160,000 per year until I retire (I hope to work till I’m 70 or more, or I may have to do so) so why the hell should I or any other worker under that cap care about protecting the wealth of the wealthy? If you would add another percent or two onto the super-wealthy to pay retirees, that would benefit the poor the most, but also the Middle Class, but also the rich a bit since they get Social Security too.

     Regarding Sanders’ proposal, Brian O’Conner at SmartAsset blog explains:

 

“Under the proposed Social Security Expansion Act, investment income would be taxed at the self-employed payroll rate of 12.4% starting at $200,000 for individuals and $250,000 for joint tax filers. In addition, income of $250,000 or more would be subject to the payroll tax. Income in the gap between the current wage cap and $250,000 wouldn't be taxed. Instead, the proposed rules would wait until the wage cap rises to $250,000, at which point the cap becomes moot.”

 

Thus, it does not increase taxes for anyone making less than $200,000 or $250,000 for joint filers. I’m no finance or tax expert (who really is?) but this sounds fair and reasonable to me. Sanders calls the current system an absurdity. I agree. Really, it seems like a ‘no-brainer’ to me and there could even be room for expansion. No, I’m not a socialist or one who wants to manipulate the free market but the notion that Social Security taxes should be levied in a different way than income taxes or sales taxes simply seems unfair. We don’t waive sales taxes after a person buys something for a higher cost so why should we waive SS taxes? Why do we deem the wealthy to be entitled to these savings? Conservative politicians always talk about the financial burden of entitlements that go to the poor but ignore entitlements that go to the wealthy. America is a country with over 1000 billionaires and a few million millionaires (Sanders is one). In this simple example we can see that the sheer numbers in real dollars going to these folks who are already super well off is an entitlement worth eliminating. It really should have been done long ago.

     There are places where inequality is truly obscene. One place is North Korea where there is a brutal caste system. The 10% that are allowed to live in Pyongyang can use cell phones. No one else can. Only 1% of the population has access to the internet and those are only people who work for the government. The elite live lavishly in the city while the poor in the countryside do not have cars and use all their money for food and collect firewood to keep from freezing to death in the winter. They don’t have electricity or running water and at night they are lit by candlelight. They don’t have paved roads or cars, just bicycles and carts pulled by animals. As food often becomes scarce, many starve to death. It is estimated that over 70% of the population is malnourished. Meanwhile Kim Jong Un is fond of delicacies and expensive liquor from around the world, has 17 lavish palaces, a giant yacht, a private island, and likely many other amenities. The society is set up so that the people worship him like a god and the party is basically a cult. The regime is a disgrace to the human race.

     Cognitive psychologist Stephen Pinker once noted about income inequality that the key point is not to penalize the rich but to help the poor. Anyone can understand that having spare money is one of the best possible ways to make more money since that spare money can be invested. It’s nearly foolproof. If you have nothing to invest you have no opportunity to grow your money. I believe that helping the poor and Middle Class makes for a better overall society. It’s OK to be rich but I really don’t think we should have billionaires at all.  

 

 

References:

This Bernie Sanders Bill Could Hike Your Social Security by $2,400 and Ensure Solvency. Brian J. O’Conner. SmartAsset Blog. Yahoo News. This Bernie Sanders Bill Could Hike Your Social Security by $2,400 and Ensure Solvency (yahoo.com)

Inside Kim Jong-un's Lavish Life While North Koreans Starve. Lovemoney. March 1, 2023. Inside Kim Jong-un's Lavish Life While North Koreans Starve (msn.com)