Last updateFri, 05 Jun 2020 3pm

Can Natural Gas Production Solve Our Energy Problems?

natural gas refineryValve Magazine’s Spring 2012 issue containing a comprehensive article on the unconventional gas industry was released recently, at about the same time natural gas prices slipped below the $2 per 1,000 cubic feet mark and the Obama administration announced a high-level working group to coordinate federal oversight of natural gas production. In that week, New York State, where hydraulic fracturing is still banned, a gas-drilling industry job fair was held in Binghamton, attracting more than 700 people looking for leads on a job.

It seems no matter where we look, natural gas production, storage, and prices are in the news, often on sites and in publications that also discuss the fact that gasoline and diesel prices continue to rise even as oil prices remain relatively steady. In fact, objections about hydraulic fracturing are often met with assertions that domestic natural gas production is part of the answer to American energy independence.

So – the question is… if there is so much inexpensive natural gas available, and the storage tanks are getting full even though production is being shut down in some areas, why can’t it be used to ease the pain at the pumps? Surely there must be a way to utilize it more effectively.

Since only .1% of natural gas used in the U.S. is actually utilized to power trucks, buses and other vehicles, would it not make sense to build natural gas fueling stations to encourage trucking and other commercial fleets to use compressed natural gas or liquefied natural gas as fuel? In addition to the cost savings, clean burning natural gas would cut down on carbon emissions while leaving more oil for consumer driven vehicles.

Another possibility is to get the proposed LNG terminals in Oregon, British Columbia and the Gulf Coast up and operating so that this plentiful resource can be exported. In addition to relieving the pressure on oil supplies needed for other countries, natural gas can also be converted into diesel or ethanol. Whether used domestically or in the international markets, wouldn’t it make more sense to use natural gas instead of corn for fuel? That would ease the demand for corn for fuel, which has contributed to rising food costs because 40% of the U.S. corn crop is used for ethanol production.

starvingNo matter what options are put on the table, there will be political and environmental issues, but there is a readily available solution for higher energy costs, and it is filling storage facilities around the continent. For valve, actuator and control manufacturers, any and all of the options that would use natural gas more effectively should lead to more business.

What might this industry do to insure this opportunity is not lost? Please share your thoughts in our Comments section.

Kate Kunkel is senior editor for Valve Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it..


True Cost of Rising Gas Prices

armleggaspricesThe spike in the cost of gasoline over the last two weeks has once again put the oil industry, government regulators and speculators under a microscope. What justification this time is being offered for a huge jump?

On one hand, consumers and watchdog groups blame speculators and greedy oil companies and governments too beholden to oil giants to question what appears to be price fixing between conglomerates. Crude for May delivery fell $1.05 to $102.95 US a barrel last Wednesday morning on the New York Mercantile Exchange. A year ago, crude was trading at $104 a barrel. The average in New York state as of the writing of this blog is $4.20 per gallon, in Toronto, it’s $1.41 per litre which translates to $5.36 per gallon.

On the other side, there is talk of scarcity, lack of refining capacity and the need for new pipelines. The oil industry itself also usually tries to explain the summer driving price increase due to the cost of converting from winter to summer fuel, but that doesn’t fly in Canada where fuel specifications don’t change with the seasons. Another reason, we’re told, is that refineries have to switch from diesel to more gasoline, raising prices. That excuse is also getting old to many consumers.

It’s pretty hard to accept these excuses when oil company profits continue to rise, and they still continue to receive subsidies. In 2011, the three biggest U.S. oil companies took home more than $80 billion in profit. President Obama said recently, “When the price of oil goes up, prices at the pump go up, and so do these companies’ profits. Meanwhile, these companies pay a lower tax rate than most other companies on their investments -- partly because we’re giving them billions in tax giveaways every year.”

The blame game and the rhetoric will go on as long as prices continue to rise, but the bottom line is that this spike in prices could have a detrimental effect on the fragile recovery of economies world-wide.

This increase will undoubtedly have an impact on summer vacation driving for consumers, but that is the least of our concerns. It will affect the price of food and all consumer goods because transportation costs are factored into the price. Higher transportation costs will affect the cost of raw materials to manufacturers and delivery from manufacturers. Of course that means higher costs to valve, actuator and control manufacturers. Those costs will get passed on to the end users, refineries, water processing plants, chemical plants and of course power plants. In turn, those costs get handed down again to the consumers.

occupy-movement-growsHow much can the already nervous consumer absorb? When does that which is perceived as price gouging translate into more cutbacks on consumer spending, protests and legislative involvement? Last summer we saw the Occupy Movement gaining momentum. It wouldn’t take much for anger and mistrust to turn into something else.

Short term profits by a small circle of speculators and oil companies could have serious consequences for a fragile world economy. That includes the manufacturing sector, and that means all of us in the valve industry.

I’d love to hear what you think the solution might be.

Kate Kunkel is Senior Editor of Valve Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it.


A US Manufacturing Renaissance

laborerarcweldingwebSeveral indicators are pointing to good news on the horizon for American manufacturing.

Recently, the Valve Manufacturers Association released its annual forecast which revealed that, for the third year in a row, shipments for the U.S. and Canadian industrial valve industry are forecast to grow, rising to about $4 billion in 2012.

The Boston Consulting Group has confirmed that optimism. In the company’s recent report, U.S. Manufacturing Nears the Tipping Point: Which Industries, Why, and How Much?, America’s improved competitiveness combined with rising costs in China are given as reasons for 2 to 3 million jobs being added to a range of domestic industries in the next couple of years. The report says that “insourcing” or “reshoring”, the trend of bringing manufacturing back to North America, is made possible in part by the 15 to 20% annual increases in Chinese wages.

This is good news on so many levels. Of course strictly from a jobs perspective, every chance to employ Americans should be rejoiced. But it goes far beyond that. The return of manufacturing to domestic shores means that quality control can be much more vigorously applied and environmental standards during manufacture can be upheld. This should be great news for manufacturers of valves, as this is one industry where precision and quality can make the difference between life and death, between environmental disaster and a safe power plant or oil rig.

I am informed by a friend who imports hand tools from many countries that the issue of timely delivery is also an increasing problem when dealing with China. It seems that promises from Chinese manufacturers regarding delivery schedules and contractual specifications are regularly broken. As a result, this company is seeking American, Canadian and even Mexican manufacturers for their products. While changing suppliers may mean a small price increase in the short term, his company’s position is that delivery shortfalls and delays and the increased costs resulting from labor and shipping due to fuel prices are not worth the aggravation of purchasing abroad.

Certainly the monetary and quality issues are important reasons to bring manufacturing home, but there are many other reasons, not the least of which is that of human rights. Again just in the last two weeks news broke about the horrific conditions under which Chinese workers labor. While American companies often are vigilant and include stipulations about working conditions in their agreements to purchase from Chinese factories, the bottom line is, companies and people slip through the cracks.

While domestic employees are being asked to make wage concessions to make labor costs more competitive, they are certainly much safer and labor under much better conditions than their foreign counterparts, and that is something about which American manufacturing companies should be proud.

Kate Kunkel is Senior Editor of Valve Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it.


Powerful Boost for Renewables

One of the issues inhibiting the use of renewable energy from wind and solar projects is that there has been no way to store the power. Until now, it has been basically impossible to save the intermittent electrical energy generated by wind turbines and the sun.

annette-verschurenBut a Canadian woman best known for guiding Home Depot Canada from from19 stores to 180 stores in 15 years has taken on the task of finding a solution. Annette Verschuren has partnered with Toronto-based investment asset manager Northwater Capital to commercialize energy storage technologies. NRStore Inc. is the joint venture they have created to find new commercial uses to speed up the development of new technologies for storing renewable energy.

The company’s first project is to develop Canada’s first energy storage park. A system under investigation is one from General Compression which uses off-peak, surplus or intermittent electricity to compress and inject air into underground storage areas such as depleted gas or oil reservoirs or salt caverns. When the electricity is needed most at peak times, the air would be released to drive a power-generating turbine as it decompresses and expands.

Massachusetts based General Compression has partnered with ConocoPhillips to develop a 2 megawatt demonstration project in Texas to back up wind farms, but Verschuren’s goal in Canada is to make a storage park in Canada a commercial operation. “I’m interested in making money, making things happen.”

NRStor will also use flywheel technology whereby flywheels store electricity as kinetic energy that can be connected to a generator to turn that kinetic energy back into electricity. Verschuren said the energy storage park NRStor plans to build will incorporate both compressed air and flywheel technology, and the company is also looking at battery technologies.

While sites across Canada are being considered, Verschuren hinted that there are plenty of salt caverns and depleted gas fields in Southwestern Ontario that could be ideal for compressed-air storage. There are also many wind farms and transmission infrastructure in the area. For a province that is struggling with a record deficit, loss of manufacturing jobs and a power surplus that necessitated the giving away of electricity this past winter, the project would certainly be welcome. For manufacturers of compressed air valves, this would certainly be a worthy project.

Annette Verschuren is a powerhouse with a passion for business and the environment. It will be interesting to see how quickly she can turn an idea into a profitable enterprise.

Kate Kunkel is Senior Editor of Valve Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it..


Are We Exporting Oil AND Jobs?

oil-sands-plantThis past Sunday, Canada’s public radio network, CBC, ran a special broadcast from Fort McMurray, the epicenter of the Alberta oil sands. In addition to the group of people gathered in the local community center, citizens from across Canada were able to comment live on what has become one of the hottest issues in the energy industry.

While any discourse on the oil sands would not be complete without discussing the impact their exploitation has on the planet, it was evident that this issue, in Canada at least, has much more to do with economics than the environment. A strong argument was made that the oil sands are the last greatest hope for rejuvenating the Canadian economy. The economic engine that was previously driven by Ontario’s manufacturing industry has ground down to low gear, so Alberta’s energy sector has been left to power Canada through the recession. Many Ontarians have made the trek west in search of work.

And while there is internal bickering within the country about whether Alberta should share more of its wealth with the rest of the country, there is really no chance that Canada will shut down the oil sands. Environmental concerns simply cannot derail this train now, but many Canadians did express concern about sending the oil out as crude. It is not the first time that this country has shipped its natural resources offshore. Canada has a long history of exporting raw materials including its vast forests to China or elsewhere overseas. Canadians then end up buying back finished products including gasoline at what one caller to the show said was “grossly inflated prices.”

The gist of what many were saying is that Canadians don’t have a problem with tapping into the natural resources, but they should be processed in Canada, rather than being sent off without any further economic benefit.

They have a point there, one that the North American manufacturers of valves, controls and actuators would most likely agree with. Why send that crude offshore when we can process it here in North America? And as far as many Canadians are concerned, if the U.S. doesn’t approve Keystone XL, perhaps that’s a sign that Canada should revitalize its own refining capabilities. Why not build new refineries and pipelines within the country? In addition to making Canada energy independent, building and supplying refineries would create jobs when and where they are needed most.

An example of this was just announced in Pennsylvania. A new cracker to process shale gas from the Marcellus is being built there, in a location which will also ensure economic benefits flow into West Virginia and elsewhere in the Northeast. Locally extracted resource, processed locally in plants supplied with valves, pipes, controls and actuators made in North America.

Makes sense to me.

Kate Kunkel is senior editor for Valve Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it..

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