By WallStreetDaily.com

Carbon-capture-and-storage technology is one of the great hopes for curing the planet of its fossil-fuel-and-CO₂ addiction/affliction. And there’s a new hope for this well-known technology.

As is the case for many a politician in the post-9/11 era, “energy independence” is one of Donald Trump’s favorite mantras.

Folks on the left would have us adopt “green” and “renewable” sources of power generation such as wind, solar and hydro, while the profile of the U.S. automobile fleet would do as Dylan did at the 1965 Newport Folk Festival and “go electric.”

The right side of the political spectrum bends toward “drill, baby, drill” — a tune first trilled by former Alaska governor Sarah Palin during the 2008 campaign, when she ran for vice president alongside John McCain. We have ample domestic resources; why not exploit them?

The thing is, we’re already moving — swiftly — away from reliance on energy imports.

In a November 28 article, Russell Gold of The Wall Street Journal establishes some context for OPEC’s most recent production-cut noises, reset the reality that we and the president-elect face after eight years of Obama:

Mr. Trump has pledged to slash regulations he sees as impediments to U.S. fossil fuel industries. But the U.S. has moved closer to energy independence in recent years. Oil imports are down and exports of natural gas and diesel are up. Overall, the net amount of energy brought into the country fell to 11.2% of domestic need in 2015 from 30.1% in 2006, according to Gregor Macdonald, an independent energy analyst.

Energy experts say the biggest barrier to additional increased domestic oil production today is the low price of crude, not red tape.

In other words, the Shale Revolution has set us free.

As is the case for many a politician in the post-9/11 era, “energy independence” is one of Donald Trump’s favorite mantras.

We’ve unlocked cheap natural gas — long known to exist within formations such as the Utica, the Marcellus, the Barnett, and the Eagle Ford — with the use of hydraulic fracturing, or “fracking.”

The simple story is that fracking has made gas a cheaper alternative than coal for power generation in the U.S. That’s what killed the industry, not Obama or his Environmental Protection Agency.

Similarly, oil shale formations such as the Bakken in North Dakota have driven U.S. production levels to new all-time records. The black stuff continues to flow up there, despite the ruinous decline for crude prices over the past three years.

Supply and demand, baby, supply and demand: We have an abundance of domestically produced gas (and natural gas is a “local” market), while the world is awash in oil (and crude is a “global” market).

At the same time, as detailed in the 2016 BP Energy Outlook, demand growth for energy is slowing, here and around the world, in developed as well as developing economies.

So we’re making it on our own. The erstwhile real estate developer’s penchant for coal and oil may or may not prove to be a campaign-trail affectation.

Be all that as it may, even before Trump’s surprising win in the November 8 U.S. presidential election, we were going to be burning a lot of fossil fuel (including coal and oil) over the next several decades.

As we wrote in the October 26 Wall Street Daily:

Global renewable power capacity now exceeds coal-fired capacity. But renewable generation still lags, as you can’t run a solar photovoltaic plant or a wind farm when there’s no sun or no wind. Storage technology just isn’t there yet.

And the Energy Information Administration’s Annual Energy Outlook 2016 Early Release: Annotated Summary of Two Cases still projects that fossil fuels will dominate the mix until 2040.

Natural gas, oil, and coal meet about 85% of U.S. energy needs today. And they’ll account for about 77% in 2040.

For the sake of argument, let’s just take the side of the overwhelming majority of the scientific community as well as the U.S. Department of Defense and accept that anthropogenic climate change is a matter of fact and that carbon dioxide (CO₂) and other greenhouse gases cause global warming.

Be all that as it may, even before Trump’s surprising win in the November 8 U.S. presidential election, we were going to be burning a lot of fossil fuel (including coal and oil) over the next several decades.

You won’t be alone. As we noted on August 17, 2016:

A recent Global Investor Survey found that 81% of asset owners and 68% of asset managers viewed climate change as “a material risk or opportunity across their entire investment portfolio.”

And The Economist Intelligence Unit estimates that private investors are at risk of losing $4.2 trillion between now and the turn of the next century because of a warming planet.

Meanwhile, according to Bloomberg Business, investors with nearly $800 billion in assets have shifted money into more climate-friendly investments such as wind and solar energy.

It follows that we must manage such greenhouse gas emissions or risk catastrophic effects such as rising sea levels’ devastation of coastal communities, increased incidence of drought, and shrinking arable acreage globally.

There are social and political consequences, too, which is why one part of the Military-Industrial Complex is worried about the issue and the other (save certain old-school resource extractors) is quickly moving toward the same ground.

That means there’s still a role — perhaps a major one — for carbon-capture-and-storage technology (CCS).

This is the process of capturing CO₂ at the source, transporting it, and storing it underground. The CCS Association identifies “depleted oil and gas fields or deep saline aquifer formations” as suitable locations for long-term (i.e., “forever”) storage.

“At every point in the CCS chain,” notes the CCS Association, “from production to storage, industry has at its disposal a number of process technologies that are well understood and have excellent health and safety records.”

That’s good, refreshing news.

At the same time, there are serious concerns about the viability of storing CO₂ underground in liquid or gaseous form for the long term. There’s evidence indicating carbon sequestration causes earthquakes, for example. Leakage into the atmosphere or other catastrophic breach is also a concern.

But there’s more — and better — news.

Yes, indeed: CO₂ rocks.

Writes Bobby Magill of Climate Central in a November 18, 2016, report:

For the first time, scientists have injected carbon dioxide into ancient lava flows and watched it solidify, demonstrating that capturing carbon dioxide from the atmosphere or a power plant smokestack and safely storing it underground may be a realistic way to help reduce greenhouse gas emissions to tackle climate change, according to research published Friday.

The study, Field Validation of Supercritical CO₂ Reactivity With Basalts, was conducted at the Wallula Basalt Pilot Project in Washington state in coordination with the Big Sky Carbon Sequestration Partnership.

Researchers “turned liquefied carbon dioxide into solid rock by injecting the gas into basalt formations. Over a span of about two years, the carbon dioxide solidified into a mineral called ankerite,” a calcium, iron, magnesium, manganese carbonate mineral.

The lead author of the study, Pete McGrail of the Pacific Northwest National Laboratory, told Magill, “This study further supports the idea that one of the major rock types on the planet — basalts — can be used to store carbon dioxide permanently and safely.”

As Magill notes: “Carbon capture and storage may be critical to helping prevent global warming from exceeding 2°C (3.6°F), either by capturing emissions from their source or by directly removing carbon dioxide from the atmosphere, according to the Intergovernmental Panel on Climate Change.”

Yes, indeed: CO₂ rocks.

Upticks, Downticks

The Russell 2000 Index closed in the red for the week ended December 2, shedding 2.3% over the past five trading sessions and closing the books on the post-Donald Trump small-cap rally.

The Bureau of Economic Analysis (BEA) upped its estimate of third-quarter U.S. gross domestic production growth to 3.2%, from an initial estimate of 2.9%. Analysts were expecting a second estimate of 3.0%.

The Bloomberg Barclays Global Aggregate Total Return Index — a measure of global investment-grade debt from 24 markets — declined 4% in November. That’s the biggest one-month slide since the index was created in 1990. The global bond market shed $1.7 trillion last month.

As Barry Ritholtz of The Big Picture and Bloomberg View writes, “First Data Corp., a point-of-sales transaction processor, says that it examined data from almost 1 million merchants and concluded that sales so far this holiday shopping season are up 9% from a year earlier. Furthermore, perhaps in a sign of the state of the industry’s health, sales of electronics and appliances rose 26.5%, compared with a lackluster 2.3% gain last year. First Data also found that the average transaction grew by more than $41 year over year.”

The U.S. Bureau of Labor Statistics reported Friday, December 2, that the unemployment rate fell to 4.6% in November, from 4.9% in October. The unemployment rate is lower now than it was for every month from October 1973 to November 1997.

The BEA announced on November 30 that personal income grew by 0.6% in October, accelerating from 0.4% in September. The data suggest the fourth quarter may be another solid one for GDP growth.

In a broader post highlighting “Five Economic Reasons to Be Thankful,” Bill McBride of Calculated Risk notes that “household debt burdens are near record lows.” McBride writes, “Household debt burdens have declined sharply over the last several years. The household debt service ratio was at 13.2% in 2007, and has fallen to under 10% now.” Read the whole thing, but scroll down to No. 3 on the list for details and a pretty compelling graphic about household debt in the U.S.

Fidel Castro, enemy of human rights, is dead.

Fidel Castro, enemy of imperialism, is dead.

Smart Investing,

David Dittman
Editorial Director, Wall Street Daily

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