Natural gas tops energy list, but how long will reign last?
Environmental groups are uniformly opposed to top source of power.
King Coal has been kicked off the throne.
Natural gas is now the nation’s leading source of electricity. It is abundant and cheap, which has not only crippled the coal industry but has also affected virtually every other source of power that makes up the energy grid.
Some have estimated that the U.S. has enough natural gas to meet the country’s energy needs for about 200 years.
But “King Gas” has its critics — especially among environmentalists — and California’s fast-changing energy landscape offers hints that a long, smooth reign for natural gas is far from assured.
As recently as 1986, natural gas was used to generate just 10 percent of the country’s power. By 2016, that figure leaped to 34 percent, supplanting coal as the No. 1 source of electricity. The U.S. Energy Information Administration recently projected the nation’s use of electricity from gas will exceed coal by 6 percent by next year.
Producers have been able to unlock vast amounts of natural gas through the combination of hydraulic fracturing, also known as fracking, and horizontal drilling techniques in shale formations such as the Barnett in Texas and the Marcellus Shale in Pennsylvania and parts of Ohio and West Virginia.
Just a few years ago, the U.S. had to import natural gas from other countries to meet its needs. Today, there is so much that U.S. producers export natural gas to places like Mexico.
Burgeoning supplies caused the price of natural gas to drop. At some periods between 2003 and 2008, the price approached $14 per million British thermal units, a common industry measurement. Since the fracking boom, prices averaged less than $3.20 per million BTU.
Those low prices are one reason that natural gas is attractive to utilities as a way to generate electricity. Natural gas-fired plants also have the ability to “ramp up” power very quickly.
In addition, natural gas burns twice as cleanly as coal.
“The biggest, most disruptive innovation in the energy sector in the last 30 years is unconventional natural gas” from shale formations, said Frank Wolak, professor of economics and an energy expert at Stanford University. “There is no doubt that if that innovation had not occurred, we would be burning even more coal.”
A ripple effect
Even major oil companies are focusing more on natural gas. For example, of the 16 new projects BP plans to complete by 2021, 12 of them involve natural gas instead of oil.
Low natural gas prices have delivered a body blow to nuclear power, eating into revenue. An analysis by Bloomberg New Energy Finance found more than half of U.S. reactors are losing money.
California’s last nuclear reactor in operation, Diablo Canyon, is slated to begin closing its doors in 2024.
It appears nuclear’s losses equal gains for natural gas.
Meanwhile, environmental groups are uniformly opposed to natural gas.
Although cleaner than coal, natural gas is a fossil fuel that emits greenhouse gases. Natural gas is mostly made up of methane, and there are concerns about leaks because methane, if released into the atmosphere, is about 30 times more potent than CO2.
“When you take into account the environmental impacts and the dangers of climate change associated with natural gas, it might be natural, but it’s not good for the environment,” said Dan Jacobson, state director at Environment California.
Bill Powers, an engineer and consumer advocate based in San Diego, said natural gas dominance is no sure thing, pointing to falling prices for alternative energy sources.
“If in a few years you can produce power at $25 a megawatt-hour from a solar field or buy it at a gas plant at $35, just on cost alone a lot of solar is going to be built, even in states where there’s no green mandate and no pressure to go green,” Powers said.
Zoback, of Stanford’s Natural Gas Initiative, isn’t so sure natural gas will lose its grip that quickly.
“My sense is that we’re going to see expanded use of natural gas for the next 20 years,” Zoback said. “In the following 20, it will have a useful decline; and 40 to 50 years from now, I think we will be using very little natural gas. We’ll largely have renewable sources.”