The Kiplinger Letter, March 18 2011 edition, was much more wordy than usual in regards to energy issues. Perhaps Japan's troubles inspired them to make some predictions. Not surprisingly, their take reveals no indication and/or acknowledgement of recent Italian events. (They are very conservative on many subject matters... not wishing to get caught up in flash-in-a-pan happenings.) I've emailed Kiplinger more than once in an effort alert the R&A staff and the subscriber base to what's happening in Italy. So far no response... not even an acknowledgment of having received my message. That's unusual for Kiplinger. Usually I get at least some kind of an acknowledgement, a "...thank you for your message... We will take your information under advisement." Shoot! They even acknowledged my STEORN alert last year! They already KNEW about those folks! Maybe I'm on their do-do list now. Or perhaps they are simply understaffed.
Here's what Kiplinger had to say: ************************************* ENERGY: The U.S. is expanding its energy sources, lessening its dependence on politically shaky parts of the globe, including the Middle East and Africa. Drillers are tapping huge shale oil deposits in North Dakota and Texas, helping to trim imports of oil to below 50% of total supply by 2015 or so. A few years ago, imports were approaching 60%. Big new natural gas fields are popping up from Texas to Pennsylvania and New York, driving the price of natural gas to rock bottom and spurring utilities and factories to switch over to using natural gas, now cost competitive with coal. Truckers are also looking at liquefied natural gas as a cleaner, cheaper option to diesel fuel. And alt-energy is going like gangbusters. Through solar and wind power will add only a sliver to the overall energy pie in the near term, advances are coming on fast. Nukes will remain a key player. Biofuels, too, will play an even bigger role as more fuel is derived from nonfood feedstocks and more fueling stations are equipped to sell it. Ditto, fuel cells for powering homes and businesses. North Dakota is poised to account for 7% of total U.S. oil output this year, compared with just 1% a decade ago. Estimates of recoverable oil from the Bakken and Three Forks shale formations spread from 5 billion barrels to 11 billion barrels. Texas isn't far behind. There are probably about 5 billion barrels to 9 billion barrels in several fields ranging from the central region to West Texas. These finds will more than offset slumping output from the Gulf of Mexico. Moreover, drilling in shale is less risky than drilling in deep water. Meanwhile... Cheap natural gas and stiff regs will retire 20% of coal-fired power plants over the next 10 years, mostly older plants that burn high sulfur Appalachian coal. Look for coal's share of total power generation to fall below 40% by 2020... from 50% a few years ago...though coal will remain a viable option for utilities. Other options for utilities: Hydropower and rapidly growing wind power. Solar panels will become ubiquitous on rooftops in the years ahead. Subsidies for making and installing panels will help the industry grow quickly. Biofuel are getting a push from high oil prices, and they'll make more gains as production expands from grains to materials such as algae, switchgrass and trash. Nuclear power will stall after what happened in Japan...but won't vanish. New, safer plants, including reactors with advanced cooling systems, will help. Note, too, that America's oil needs are shrinking. Stepped-up emphasis on conservation, including more use of hybrid and electric cars, will pinch demand. ******************** Regards, Steven Vincent Johnson www.OrionWorks.com www.zazzle.com/orionworks
