Abundant Natural Gas Changes Everything

Posted by Tom Denham

Mar 3, 2017 2:28:37 PM

It is not solar, wind or even politics that knocked coal from its perch atop the US energy provider market, but natural gas.  However, there is an environmental price to pay.  Although it does not contribute to global warming as much as coal, it does contribute to an increase in CO2 emissions.

Natural gas is expected to replace not just declining coal power in the future, but also a significant portion of low-carbon nuclear power plants scheduled to close. Compared to coal, natural gas produces approximately half of the carbon emissions per unit of electricity generated than coal.

Another environmental impact of natural gas is the leakage of methane during the extraction process.  This methane leakage poses additional climate risks.  Plus, natural gas extraction from the fracking process can result in earthquakes.

Despite its environmental issues, when the price of natural gas became cheaper than coal, it fundamentally changed the energy landscape.

Natural gas prices have been declining for several years and are currently 50 percent less than their 2008 peak. The supply of natural gas continues to increase despite the fact that the price is at multi-year lows.

The number of rigs pumping natural gas out of the ground has been declining, but natural gas producers have become so extremely efficient at extracting natural gas that there is a supply glut projected for several years into the future.

Demand for natural gas continues to increase. Even though typical commuters are not flooding automobile showrooms with demands for gas powered vehicles, large trucks and transportation companies hauling the nation’s freight are getting on the natural gas bandwagon.

It costs about $30,000 to convert a fleet truck to using natural gas. At natural gas prices around $2.50, each truck would recoup the conversion cost in a year and save about $20,000 a year thereafter. The engine costs are expected to drop in half in the coming years, which will give more incentive for the conversions.

United Parcel Service recently purchased 700 new natural gas powered tractors to benefit from lower fuel prices, 25% lower emissions, growing domestic supply, and an average of 600-mile range with no route limitations. Anheuser-Busch has converted its entire Missouri-based 100-truck fleet to natural gas after doing it successfully with its smaller fleet in Texas.

Electricity demand is projected to rise nearly 30 percent from a baseline in 2012 to 2050, when much of the nation’s electrical needs are expected to be met by natural gas.

Topics: Renewable Energy