December 15, 2009 update

The financial world is buzzing about ExxonMobil's purchase of XTO Energy for $31 billion dollars in cash and the assumption of $10 billion is debt. What makes XTO so attractive? Its holdings and capabilities regarding shale deposit gas. While this is traditionally costly to produce, XTO uses directional drilling and "fracking" to profitably exploit these resources.

What's the real significance of this move? It means ExxonMobil is betting that natural gas will rise in importance in our energy future.

This is consistent with the findings of the 2005 New England Governors' Conference report "Meeting New England's Future Natural Gas Demands" (78 pg. PDF), which noted that the existing gas infrastructure would reach its capacity limits by 2010. (This has been mitigated in part by declining industrial consumption.) In 2005, natural gas accounted for over 30% of electricity production, and the majority of new plants built in New England after 1999 are gas-fired -- 10,000 MW of them. In other regions of the country, for example where coal is abundant and regulations are favorable to burning coal (e.g. the Southeast), gas is currently less important. Perhaps ExxonMobil is betting that as states (or the feds) tighten down on coal, gas will be the fuel of the next decade.

Meanwhile, the Federal Reserve announced an almost 1% increase in industrial production in November, with a 71.3% production capacity factor -- down from the 80% average for 1972-2008, but above projections. Utility production dropped nearly 2%, primarily due to milder temperatures and less demand.

President Obama is calling for an upscaled federal residential energy efficiency program. Interestingly, he's making the announcement at a Home Depot in Virginia. Unless he can convince Congress, though, this concrete might not set. Still, I'm considering putting off a furnace replacement and some insulation projects just in case anything does materialize.

The Maine Ocean Energy Task Force selected 3 out of 4 test sites for offshore wind: offshore of Boon Island, Damariscove Island, and Monhegan Island. Cutler didn't make the cut.

The Maine Department of Conservation issued a notice of draft rulemaking (PDF) today, seeking public comment on “Designated scenic viewpoints of state or national significance, located on Public Reserved Land or on a publicly accessible trail used exclusively for pedestrian use, for consideration in the permitting of expedited wind energy development.” This rule designates scenic viewpoints of state or national significance on Public Reserved Lands and trails within an 8 mile buffer of the expedited permitting area. Under the draft rule, if a wind energy development is proposed up to 3 miles from a listed viewpoint, the applicant must provide a visual impact assessment; the Department may required one if the development is within 8 miles of the buffer. MDOC will hold a public hearing on January 12, 2010 at 10am (Maine Department of Conservation, Harlow Building Room 109, Augusta). Written comments will be received through January 25.