Natural Gas: Coming to a Power Plant Near You?

Natural gas has has been selling at $2.50 in the U.S. at per million Btu, thanks to fracking.  That’s after bouncing around between $3.50 and $5.  Gas prices peaked at $13 in 2008. It’s still selling for $5 to $10 outside North America.

Folks in the gas industry claim they can provide cheap fuel here for a century. Factories that use a lot of heat (for making metals and glass, for instance) can now run more profitably in the United States than in countries with higher energy costs.

Natural gas pipeline in Switzerland. Energy-intensive factories can now operate more profitably in the U.S. than in countries with higher energy costs.

The implications for renewable-energy development in North America are vast, but not necessarily as ominous as some media reports would have it.

For context, consider that a million Btu (10 therms) has a theoretical heat value equivalent to 292 kilowatt-hours of electricity. But the world’s best combined-cycle heat-recovery gas turbine plants can hit 60-percent efficiency, and most existing plants run at 35 to 40 percent. On average, at $2.50, gas costs 2.1 cents per kilowatt-hour. That’s in the ballpark with coal.

The EPA says that compared to coal, natural gas produces half as much carbon dioxide, less than a third as much nitrogen oxides, and one percent as much sulphur oxides at the power plant. And so, faced with the costs of retrofitting a filthy old coal plant, it makes sense to turn it into a natural gas plant.

Sounds easy. But the utility business has the same problem the trucking companies do. They’d love to burn gas but it may not be readily available where they need it. The pipeline infrastructure doesn’t cover the country, and is expensive to install.

Greg Ebel, president of the gas-pipeline company Spectra, on March 4 told an audience at the Vail Global Energy Forum that he can cut the cost of natural gas in northern New Jersey and New York City by 75 percent, just by building a 16-mile pipeline. And 100 old coal plants lie close enough to his main routes to convert to gas.

But that’s 100 plants out of roughly 1500 coal-fired generating plants in the United States. In effect, natural gas faces some of the same transmission issues as utility-scale solar and wind power. And after the San Bruno explosion, new gas pipelines  ― even the renovation of old gas pipelines ― may face the same local resistance as any new above-ground high-voltage electric line.

Most important, those of us concerned about the future of the climate are aware that natural gas isn’t a solution to the carbon emissions problem. A report from the National Center for Atmospheric Research last fall pointed out that converting from coal to gas won’t be enough to halt or reverse global warming. Only carbon-free power sources can do that.

To learn more about the interface of renewable energy and natural gas, register today for the World Renewable Energy Forum in Denver, May 13-17.

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