I agree with you on the Iron Triangle.

I was at the AOCS conferenceand heard a talk by Rick Redash of PIRA Inc. on Natural Gas supply.  

It was an amazing display of misdirection and calming statements.  The overall message from PIRA is that NG prices will be dropping in the future because of all the projects that are now being worked on to deliver supply.  My notes are not real detailed here but basically new fields in the lower 48 are going to be tapped, Canadian and Alaskan fields are being ramped up and pipelines in Texas and Canada being planned to deliver this NG.  Sounded wonderful unless you had been reading TOD and new how difficult each of these projects would be to ramp up simultaneously.

I do remember the statement that a 52 inch pipeline is on the books to deliver all the Alaskan and Canadian gas to the Chicago area.  Might be 1 line or split as it comes into the midwest. My quotes based on memory. "This is a really big pipeline.  So big that there are currently no steel mills in the U.S. to roll the pipe.  As soon as these plants retool, there will be a number of U.S plants doing nothing but making pipe for years to allow this pipeline to go in".    But I sat in the audience thinking, right this project isn't going to get done.  All we have to do is dedicate almost all the steel capacity in the U.S. to this one project, to the exclusion of all other pipe.  There was mention of all these scattered fields that could deliver NG if the pipelines are built.  He glossed over decline rates completely and said that the LNG ports were over scheduled.  Too many because the domestic supply would be so robust in a year or so.

The message was that there are large reserves and plans to tap them and plans to deliver to the market.  So prices should moderate, supply will be sufficient to run fertilizer plants, if they haven't already left the country, and a short term switch to coal should bridge any electricty gap.  So if there is an energy crunch in the future it can't be due to the energy sector because we have all these plans.  Shortages would be due to lack of steel, or NIMBY issues, or lease restrictions , EPA, etc. etc.  As soon as people asked hard questions the answers became very vague and imprecise.

One of those talks that if you knew detailed information you could spot the gaps but if you didn't know anything about NG supply, it was very reassuring.  Most people in the audience were users of NG, Lipid chemists, or investors in biodiesel plants.  Few were hard core energy insiders IMO.

Much discussion there about biodiesel vs ethanol versus other liquid fuels.  This was a lipid conference so many more details about biodiesel from vegetable sources.  First some details from a talk by Frank Gunstone from St. Andrews University.

As of 2005 There was a total of 135 million metric tons of lipids cycled through.  These are from Fish, animal and vegetable sources.  Animals are via rendering and is becoming a smaller % each year.  OF that 135 M metric tons about 80% went to food, 14% to oleochemistry and 6% to feed and other.  By 2020 these numbers may have to increase by 40% just to keep up with population growth.

A significant chunk of those lipids and fats are part of a food stream, not dedicated lipid production.  There is significant potential to increase lipid production by planting more oil seed crops.  A lot of comes from corn but it is a poor oil producer (<6% oil typically in grain) compared to something like an oil palm.  Really 2 sources accounted for the fast majority of oil seed lipids in 2005, soybeans and oil palms.  2005 was the first year that palm oil was greater than soy oil.  

That growth in palm oil is really critical because oil production for palms is up to 5 tons per acre per year while soy beans are less than one ton.  There can be an increase in non food grade lipids much faster than lipids from food sources would indicate.

Lastly for today.  A talk on biodiesel showed that the EROEI for biodiesel from bare ground to in the tank is 3.2-1. I believe this is for soybeans in the U.S. Very positive and much better than ethanol.  The biodiesel numbers include fertilizer and all input costs.  

More later on this conference when I have time.

In response to a question regarding oil prices, he asked how many in the audience thought that either the US or Israel would attack Iran (about a third of the audience raised their hands).  He said that he agreed with everyone who raised their hands.  Before the attack on Iran, he said he was expecting to see $80 oil next year.  After the attack, he said that we would of course see $100 plus oil in the blink of an eye.

His single biggest investment is in the tar sands play.  In response to a question about what energy stocks he would recommend, he responded that he would divide the money between quality coal companies and the tar sand play.  He said he likes long life reserves; he doesn't like to deal with depletion.  Notice that he did not recommend any conventional oil and gas companies.

He said that we need every single form of alternative energy (he is not very enthusiastic about ethanol from corn).  He noted that the ethanol industry must have a lot of political influence to get a 54¢ per gallon subsidy and a 51¢ per gallon tariff on imported ethanol.