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The obvious has happened. We are running out of natural gas supplies. What can we do about it? Virtually nothing. In recent years we have built about 200,000 MWe of new natural gas fired combined cycle electric generating plants. Natural gas is our preferred fuel of the future. It is preferred because it is the cleanest burning of the fossil fuels.
The Department of Energy DOE reports: While coal is the nation’s major fuel for electric power, natural gas is the fastest growing fuel. More than 90 percent of the power plants to be built in the next 20 years will likely be fueled by natural gas. Natural gas is also likely to be a primary fuel for distributed power generators – mini-power plants that would be sited close to where the electricity is needed.
I don't think the DOE is current on the natural gas situation. I offer some evidence that discusses this situation. As you read them notice the solution offered by politicians. Their solution is humorous. They suggest that we encouraged utilities to burn a cheaper fuel for electric generating plants. What would this fuel be? Also the new generating plants are fuel specific. They can only use a gaseous fuel with the heating content of natural gas.
News Release Oct, 02 2005. PG & E states that national gas prices will go up 71% this year. Would you believe that California intends to go with natural gas fired pants as their future energy fuel for power plants?. See press release below.
Natural gas is making a comeback.
In recent years it has been found to be technically feasible that with horizontal drilling, natural gas can be drawn from beneath cities and neighborhoods. Thus analysts have found that natural gas production from shale formations can provide vast supplies.
But tons of water and chemicals must be pumped deep down into the wells to loosen in natural gas. This has created concern among many communities and environmental groups that say the process contaminates the ground water. It seems that if we get copious amounts of natural gas it constantly deteriorates the water supply. The vast horizontal and gas drilling carries the risk of contaminating the drinking water supply that serves half of the states, including all the New York City.
Energy use is projected to rise in the decade decades to come. The demand for natural gas will also escalate. Toward that end, the production of rich shale formations throughout the nation will provide in its central stimulus. And one that proponents say should stave off future energy emergencies. But it does not come without destruction of most of the cities water supply.
Nuclear power or anyone? It is an inexhaustible supply of energy without degradation of city water supplies.
PG&E Planning for California's Energy Future
SAN FRANCISCO, July 21 /PRNewswire/ Pacific Gas and Electric Company today submitted a filing to develop and construct a 560 megawatt (MW) combined-cycle natural gas power plant in eastern Alameda County on the site of the proposed Tesla Generating Station.
My comment: California may say they are gong with renewables, but they really allow new Natural Gas power plants to be installed to keep up with the demand. Since they do not allow nuclear power plants, the cost of electric energy will climb rapidly using natural gas plants. Also notice that PG&E will finance this plant with their own money. They do not finance the solar plants to be installed in the desert. Some one else does. Smart move since the solar plants are financial losers.
Moreover, Boone T. Pickens says that natural gas is cheap and abundant enough to fuel our vehicle fleet. He intends to install wind power to permit the US to defer using natural gas for electric energy generation. We will thus no longer have to rely on oil from foreign sources.
It appear to me that using natural gas for our vehicle fleet would very rapidly make natural gas too expensive for home heating and electric energy generation.
The following piece is by by Senator Jim Talent R-mo
NATURAL GAS
AMERICA’S UNTAPPED RESOURCE
The key to America’s energy security is to become more energy independent. We are leaders in industrial and economic growth, but to sustain this growth we must develop technologies to reduce our dependence on foreign sources of energy. Low-cost, reliable energy is the key to economic prosperity and national security.
Natural gas prices set record highs this winter, exceeding $15 per thousand cubic feet. Natural gas still costs two to three times traditional levels, due in part to increasing world demands for energy.
High utility bills are hurting family budgets as well as jobs. Missouri farmers and manufacturers are big users of natural gas as feedstock for fertilizer and chemical products. The Industrial Energy Consumers of America reported that “since 2001,natural gas prices have significantly contributed to the loss of 3 million manufacturing jobs and the shifting of future investment overseas.
”Rising energy costs impede our ability to compete in the global economy. We are at a disadvantage when America’s natural gas sells for $15 per thousand cubic feet and in Europe it’s $7 and in China it’s less than $5.
The Renewable Fuels Standard, which I added to last year’s Energy bill, was an important first step towards reducing our energy dependence. Ethanol and biodiesel are one of the solutions. We also need to responsibly produce more of our own clean burning natural gas.
Natural gas prices are excessive because our rapidly growing demand is outstripping our production. Demand is expected to grow by over 30 percent; however, the Energy Information Administration reports that the U.S. natural gas exploration has doubled since 1998, but production has declined by 1.5 percent. This shows how we’re getting all we can out of the resources we can access.
The problem isn’t the availability of domestic natural gas resources, it’s the barriers that have prevented us from accessing them. The Minerals Management Service estimates that we have 621.1 trillion cubic feet of remaining undiscovered, technically recoverable gas 406.1 trillion cubic feet of which is in federal offshore waters. That is enough natural gas to heat 60 million homes for 121 years. Unfortunately, much of this is located in offshore areas which Congress or the president has banned access.
The ban was imposed in part due to safety concerns that experts have said are no longer valid. Interior Secretary Gail Norton recently testified that, “Hurricanes Katrina and Rita confirmed that our offshore oil and gas industry produces environmentally-safe energy for America. Even in the face of two back-to-back major hurricanes, all subsurface safety valves held on the Outer Continental Shelf and there was no significant spill from production.
”With energy prices at record levels, the best use of our nation’s resources is to carefully and responsibly produce the abundant energy which lies within our borders. One solution may be to open the untapped portion of just one small, unexplored area 100 miles offshore in the Gulf of Mexico. Lease Sale Area 181, as it is known, has enough natural gas to heat 6 million homes for 15 years, according to the American Gas Association.
I’ve introduced bipartisan legislation with Senators Pete Domenici (R-N.M.), Jeff Bingaman (D-N.M.) and Byron Dorgan (D-N.D.) instructing the secretary of the interior to develop an oil and gas leasing program for this area. Our bill excludes for development any part of Lease Area 181 within 100miles of the Florida coastline. The Senate Energy Committee will soon hold a hearing on our legislation. This is a pro-growth, pro-jobs solution to help energy consumers and increase our domestic supply of natural gas.
Passing the Energy bill last summer was a good first step and I am confident the Senate will do even more this year to make America more energy independent.
California Get's its Energy Policy Affairs in Order.
California has adopted a “loading order” for new sources of electricity. The loading order prioritizes all new sources, with the most environmentally-friendly source being the first options and the least friendly being the last. Therefore, California’s first response to meeting growing energy needs is energy efficiency and demand response; then, renewable sources and distributed generation will be deployed; and lastly, clean and efficient fossil-fired ( natural gas) generation will be utilized. This emphasis on clean power allows the CPUC to play an active role in California's emission reduction efforts and Greenhouse Gas reporting being spearheaded by the California Climate Action Registry.
Reliance on natural gas for electrical power generation and space heating will hit both industry and home consumers. It will become very expensive to live on California.
The graph below shows some of the price increases of natural gas as found in the U S Energy Information data.
California does not intend to use nuclear power so the new power plant additions must be natural gas fired. The graph shows we are on for some very high electrical energy prices. For those interested I present a tutorial on how to calculate the price of electric energy component based on the price of the fuel used. The rate of rise is now startling. We need to pen more gas wells as well a putting in LNG terminals.
Bills for Natural Gas to Increase ; Utility is Raising Rates for 2nd Time This Year
Jun 20 - Gazette, The; Colorado Springs, Colo. Natural gas bills will rise next month for homeowners and businesses in areas outside Colorado Springs, the second increase this year.
My comment: this will happen all over the US. We cannot rely on natural gas for our future energy supply.
Here is what the future holds for future power needs. It is natural gas, which will drive the cost of electrical energy up significantly.
Consumers Energy Closes on Purchase of 946 Megawatt Natural Gas Power Plant to Help Meet Growing Customer Needs
JACKSON, Mich., Dec. 21 /PRNewswire-FirstCall/ Consumers Energy has closed on the purchase of a 946 megawatt natural gas-fired power plant to help meet the growing power needs of its customers.
Consumers Energy's president and chief operating officer, John Russell, said the power plant purchase is a key part of the utility's Balanced Energy Initiative, a comprehensive, 20-year plan to meet the needs of its 1.8 million electric customers.
LNG Facility Lease Denied
Here is the latest news release from California. The State Lands Commission in a 2-1 vote decided not to award a lease to a proposed liquid natural gas (LNG) terminal off the Southern California coast. \
Other people are bullish on Natural Gas
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Liquefied natural gas could overflow with prosperity. Stranded gas found in pockets around the world can be frozen, transported and then re-gasified in areas where natural gas shortfalls persist. Right now, that LNG provides about 2.8 percent of this nation's natural gas, a figure that the U.S. Department of Energy is predicting to increase to 16 percent by 2030. At present, five LNG import facilities exist in the United States and one in Puerto Rico. Roughly 40 new re-gasification plants have been approved by U.S. regulators, although no more than a dozen will be built. Most of those will get built in the south. Moreover, the additional plants planned for the region would be strategically placed near the Gulf of Mexico as well as key pipelines. My Comments: California does not want LNG or nuclear power plants. But the South wants both of these energy options. The South will flourish in low cost energy while Californians will flounder in renewables and high cost energy shortages. There will eventually be a voters revolt in California and many politicians will go the way of ex governor Davis. |
Commissioner John Chiang who is also the state controller said, "I don't believe LNG facilities would be in the best interests of the state or its residents."
My comment: If there was ever a stupid statement, this is it. Here is a state that has forbidden coal plants and wants to reduce the CO2 release by 20% in the next few years, The state is going to rely on natural gas as the fuel it must use to keep up with the electric energy load increases John Chiang must live in a cave not to know this fact.
LNG has been a safe way to import natural gas and thus have an amply supply at a reasonable cost. As it now stands the price of natural gas will sky rocket. There is no other source of energy to use. Certainly not renewables that now contribute only 10% of California's electric energy. .
Italy Reportedly Facing Power Blackouts This Winter
Italy, which depends heavily on gas imports, is
due to face an acute shortage of natural gas for its domestic power generation
this year, according to the chief executive of Italian utility company Enel, as
cited by Reuters.
Below is a tutorial about the relationship of electric energy cost and natural gas cost.
It is true, as the price of natural gas increases, the cost of electrical energy generating by the NG fueled generation plant increases. I once saw a TV program where a Public Utilities Commission (PUC) official was trying to related the cost of natural gas to the cost of electric energy. He did not have a clue as to how it is calculated. So much for the expertise of the political appointees of the CPUC. At the danger of losing readers I will do it here. Read on if you are not interested. First notice that consumers are charged by the amount of electric energy in kWh they use. Electric energy is bought or sold, electric power is not bought or sold as you always read in the newspaper statements like the Governor ordered officials to buy long term power contracts.
All power plant thermodynamics cycles have an efficiency heat rate (HR) number in terms of how many BTU's it takes to generated a kWh (kilowatt-hour) of electric energy. Notice I did not say generates power as all newspaper reporters do. A power plant generates energy, not power. The typical modern day combined cycle NG fueled plant has a heat rate of 8,000 BTU's per kWh.
The formula for the cost of fuel is:
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HR (BTU / kWh) x cost /BTU of NG = $/kWh.
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The energy component cost is thus calculated as :
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$6 /1,000,000 BTU x 8,000 BTU/kWh = $0.048 /kWh. Or 4.8 cents per kWh of electrical energy.
I repeat the above does not include the capital or the operating and maintenance cost.
Natural gas prices are usually quoted in dollars per million BTU of energy content. A short time ago the price of NG was about $6 per million BTU, but very rapidly rose to $15 per million BTU today. Now the spot price is $16 per MMBtu.
But this is due to the recent weather that blew the platforms off their connections in the Gulf. We should get some relief when the platforms are reattached. But in my opinion the price will still be quite high and will keep going up. Some relief could be had by importing LNG from abroad.
As a point of interest here, the modern combined cycle NG fueled plants (combined cycles are gas-turbine steam-turbine systems in series.) have heat rates of 8,000 BTU's per kWh whereas coal fired plants are more like 10,000 to 12,000 BTU's per kWh. In other words it takes about 25% more energy to generate a kWh in a coal fired plant compared to a combined cycle natural gas fired plant. This is also true of a NG fired plant that is not a combined cycle system. Also keep in mind that the total cost of energy must include the fuel cost, the capital cost, and the operating and maintenance (O&M) costs. In California, to hear some consumer groups talk they think the capital cost of a plant is free.
Finally when I was still working we did a study comparing the different fuel options and their related cost of electric energy. Natural gas was the worst because the annual cost of natural gas goes up each year. The cost of nuclear plant fissionable fuel is relatively stable because there is so much of it. Also transporting cost of nuclear fuel to a plant is much cheaper than coal or natural gas.
An example of the wrong fuel strategy
DENVER, April 20 -- Setting an example for other municipalities to follow, the City of Barstow, California has signed a Memorandum of Understanding with Hythane Company, LLC stating its intention to explore the use of Hythane(R) (a fuel blend consisting of 20% hydrogen and 80% natural gas) as a vehicle fuel for the city's fleet. Vehicles using Hythane(R) fuel enjoy even greater reduction of emissions than their already low-emission natural gas counterparts.
My comment: In the interest of clean air, Barstow will use natural gas as their city's vehicles fuel. Even though natural gas is in short supply they will also use it for the production of hydrogen. Why go to hydrogen as a fuel. After all it is made from steam-reforming of natural gas. A double whammy for natural gas consumption. How long would natural gas be available if everyone did this? And what would this do to the price of using natural gas for home heating even if there is still some available?
Another News Release About Natural Gas.
Energy experts told the Joint Economic Committee of the U.S. Congress that high natural gas prices are here to stay for about the next five years as demand grows and the country waits for new supplies from Alaska and foreign sources.
Sen. Jeff Bingaman, D-NM at a hearing Thursday suggested the need for policies that encourage utilities to use fuels that are cheaper than natural gas to fire up their power plants. (This comment slays me. What ignorance is displayed by our experts in congress who sit on the energy committee.
As of the new election (Nov 7, 2006) results we now have the same Jeff Bingaman to lead the energy committee.
Bingaman likely to lead energy committee
Nov 10 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Andy Lenderman The Santa Fe New Mexican Barring a major development, U.S. Sen. Jeff Bingaman will likely take over the direction of the Senate Energy and Natural Resources Committee when Congress reconvenes.
Bingaman could not be reached for comment. He'll likely take over the committee from U.S. Sen. Pete Domenici, R-N.M., who pushed the 2005 Energy Policy Act through Congress last year.
North America is going to experience a large increase in natural gas demand due to a growing number of utilities using gas to fire electric power plants, said Daniel Yergin , chairman of the Cambridge Energy Research Associates.
Over the last few years, the U.S. has installed about 200,000 megawatts of gas-fired power plants and today those plants represent about 25% of the country's gas demand, he said.
As a result, power demand is squeezing price-sensitive industrial demand out of the market, Yergin said.
In response, Bingaman asked Yergin if he sees a need for policies that discourage utilities from constructing gas-fired plants
"You've gone right to a question we're looking at now," Yergin answered.
I wonder where Sen. Jeff Bingaman thinks we can get a cheaper fuel to replace 25% of our natural gas generating plants across the nation? And will all of the natural gas fueled power plants be mothballed and miraculously get new plants to generate the cheaper fuel? The situation is worse in California where NG generates 45% of our electric energy. Well one thing is certain. Renewables will not pickup a significant part of the load.
It's coming now folks. Get ready to pay a lot more for natural gas especially in California.
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Customers could see 50 percent increase More Bad news The U.S. Energy Information Administration estimates that natural gas prices will rise by as much as 77 percent this winter in the Midwest and up to 33 percent in the Northeast. For the average family, winter heating costs for natural gas users could jump from $957 to $1,568. |
Calpine- the largest owner of natural gas fired plants.
Calpine is an amazing company. It was started about 20 years ago by Peter Cartwright, an ex GE engineer. Located in San Jose, CA they own many geothermal and combined cycle natural gas fired plants. They are expanding as noted by their following statement:
Calpine is committed to producing the clean, efficient, cost-competitive electricity that our customers need. Today, we generate enough electricity to meet the needs of more than 22 million households. By the end of 2005, we expect to produce more than 30,000 megawatts of electricity - enough to supply approximately 30 million homes and make Calpine one of the largest power producers in the industry.
Their natural gas combined cycle plants consist of two gas turbines in series with a steam-turbine electric generating pant. Calpine currently has a total of 27,754 MWe of gas fired combine cycle plants in operation, and 5,168 MWe currently under construction.
Obviously Calpine does not fear the increase of natural gas prices nor do they listen to Senator Jeff Bingaman. But Calpine had the new plants in planning long before the natural gas prices were rumored to increase.
I offer the Calpine plans as proof that natural gas is the fuel of the future regardless of the supply or cost situation. Calpine is just one of many power companies that have built and owned combined cycle natural gas fired plants. It is important to note that these plants cannot use any fuel except natural gas or some other gaseous fuel of comparable energy content. And I cannot think of anything else that would suffice.
Whoops, things have now changed. Such a surprise.
Calpine Replaces CEO, Shares Plunge 44%
Calpine Corp. stock lost nearly half its value
Tuesday after the board ousted the struggling power producer's two top
executives, raising concerns the move could take the company a step closer to
bankruptcy.
SAN JOSE, Calif.,
Nov. 29, 2005
More bad news, Calpine is now in
Chapter 11. Recent news flash:
Calpine Corporation Files Chapter 11 Petitions to Facilitate Debt Restructuring
SAN JOSE, Calif., Dec 20, 2005
Calpine Corporation (OTC Pink Sheets: CPNL) announced today that, in order to allow continued operations at its power plants and facilities in the U.S., Canada, and Mexico, strengthen its balance sheet, protect its assets, and enhance the value of its business, the company and many of its subsidiaries, including Calpine Generating Company, LLC, filed voluntary petitions to restructure under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York in Manhattan.
In addition, Calpine has petitioned the court to reject certain of its contracts, including power sales agreements in which the price paid to Calpine for electricity is significantly below its cost or market prices. The company expects its power plants will continue to be available to meet the needs of electricity consumers.
MY Commitments: What happened here? The obvious.
It is impossible to generated energy economically when the cost of fuel is higher than one can get for the price of electric energy it generates. It has always been inevitable that this would happen, and it did. Calpine was the good guys when they built about 3,000 MWe of new generating plants to help then Gov Davis out of a jam. Here to fore there was not enough generating capacity for California in the Summer of 2000 to meet the load demand. So we had brown outs and the Gov took the heat for it, although it was not his fault entirely.
Now that Calpine is in Chapter 11, the State of California wants blood from a turnip. California officials say paying market rates would drive up their costs by at least $700 million over the next four years. So I guess that Calpine is supposed to pay market rates for natural gas, but swallow the difference and provide California energy at below market rates. Neat trick, except that it is impossible to do. The bankruptcy judge has scheduled a hearing for January 29. Any guesses on how it will turn out?
Perhaps California will not have to pay for the increases in the price of natural gas for now or ever. The consumers like TURN would like that. We all should get something for nothing, should we not? But the first law of thermodynamics will prevail. One can not get more out than they put in.
I do not know how Calpine got into such a severe financial problem. I am surprised that they did not get contractual commitments to operate their plants at capacity factors of at least 80%, they are now at 40%, and also an escalation clause to pay for the increasing cost of natural gas. I am told that Calpine expected to be able to go onto the spot electrical energy market and make big bucks in doing so. But the spot market dried up. And the price of natural gas went much higher due to the recent disaster in the gulf states.
In a few years the power demand will go up, especially in the summer and the renewables will not come in as expected, then the you know what will hit the fan again and it will start all over. And the California Attorney General will again sue someone, but it will not provide any more cheaper energy than it will now.
APS Asks ACC for Expedited Action on Soaring Fuel Costs
PHOENIX, Jan 06, 2006 -- BUSINESS WIRE
Arizona Public Service (APS) today asked for emergency action by the Arizona Corporation Commission (ACC) to accelerate the updated base fuel portion of the Company's pending general rate case filing. The Company requested a decision coincident with the April 1 effective date of its annual fuel adjustor change.
"By the end of the year, APS will have incurred a half-billion dollars of un-recovered fuel costs."
More Natural gas woes
Domenici Asks for Legislative Proposals to Cure Gas Crisis -
NGI’s Daily Gas Price Index - 12/6/04 - - Senate Energy and Natural Resources Chairman Pete Domenici (R-NM) is proposing to put solutions "to the looming crisis in natural gas supply and demand" on the front burner of the new Congress, calling for legislative proposals to be filed with the committee by Jan. 7. The senator's announcement followed on a number of complaints last week over the rising price and volatility of natural gas. Domenici on Monday issued a broad call for legislative proposals that offer long-term solutions. The proposals will be reviewed by committee staff and a half-day meeting has tentatively been scheduled for Jan. 19 to hear about those that appear most promising. The supply problem is evidenced by rising natural gas prices, which "have driven up the cost of an array of goods and services and placed a financial hardship on consumers whose homes are heated and cooled by natural gas," the chairman said.
Series business. I wonder what the senators will suggest as long term solutions? Either we cut back NG use for electric energy production or home heating will suffer. I submit that both will suffer. And we really have no options but to override the environmentalists and drill for NG in areas around Yellow Stone National Park. But the senators who are supported by environmentalists will object. Perhaps a little greater conservation in Minnesota when it gets to 50 below zero they can make do with colder inside temperatures.
What A Surprise, Natural gas is in Short Supply.
When I graduated from college 50 years age it was pointed out that natural gas is finite and we should conserve it. It is important to conserve natural gas because it is the only convenient fuel we can pipe to our homes for heating, cooking, and drying clothes. What goes around comes around. And it is humorous to hear Sen. Jeff Bingaman say we should encourage utilities to use fuels cheaper than natural gas. Encouraging utilities will not make spur of the moment fuels we can substitute for natural gas.
What Should We Do?
We should drill for natural gas in the intermountain areas close to Yellow Stone National park, drill off shore in the gulf of Mexico, and drill in Alaska and run a pipe line through Canada to the US. However, the environmentalists have prevention these actions as of this writing. Most importantly we should be using nuclear plants to generate electricity and conserve natural gas for home heating, etc. The environmentalist have also prevented the addition of nuclear plants. The choice is either coal or nuclear. Which is the most environmental friendly?
Without natural gas what will they do for space heating in places like Minnesota where it gets to 50 below zero in the winter time? Maybe solar space heating? But the suns rays do not go through a foot of snow. And the sun does not shine much in the Midwest in the winter time.
Finally, the State of California appears to be open to allowing liquefied natural gas (LNG) terminals.
Currently the Hollywood types are railing against liquefied natural gas (LNG ) terminals, but LNG terminals are seriously being planned in California at seven locations with one already started. Since the State has 48% of its electric energy generated by NG fueled plants, it is inevitable. The environmentalists wanted natural gas fueled plants because they are the cleanest of the fossil fuels. Now they are fighting against the only method to maintain fuel for NG plants. It appears that they will not win this one. This shows that environmental groups are against all practical forms of energy.
Tankers will bring the LNG from Australia and Indonesia. The LNG will be heated back to a gas and distributed through pipelines throughout the state. The LNG terminal platforms are located about 14 miles off the coast and are piped to the mainland gas distribution pipelines.
The history of LNG has been quite good. During the past 40 years more than 80,000 LNG carrier voyages have taken place without any major accidents. But an explosion in Algeria last year killed 27 people.
LNG has promise and will likely experience high growth over time if natural gas prices remain high. At the right price, LNG can be transported to the United States and elsewhere from gas-rich foreign sources giving producers a chance to earn adequate returns. But, ramping up production will take time and any subsequent benefits will not be realized until 2008 when the first group of new LNG terminals comes on line.
Last year, LNG comprised 2 percent to 3 percent of the natural gas supply in this country. Projections are that it will make up 20 percent of the supply within 20 years. Globally, the LNG market has grown by 33 percent over the last five years and more than $4 billion has been invested in that effort, adds the International Energy Agency in Paris.
NG plants are an alternative to nuclear plants wherein the latter has never caused an accident that killed anyone. But they must make choices. There are no plans to build nuclear plants in California. Moreover, consider that each 1,000 MWe NG plant spews out 200 million cubic feet of the green house carbon dioxide gas each day. NG is not friendly to global warming. But the environmentalists have to accept one or the other. California's energy future demands it.
And no, renewables will not take up the slack.
This is a beginning to help the problem. Let's follow this to see if the whole Senate and House brings it about.
The U.S. House Resources Committee just voted to ease a decades-long moratorium on drilling in the so-called Outer Continental Shelf, which is home to the 85 percent of federally-controlled waters in which drilling is strictly forbidden. The full House is expected to soon take up the measure while a similar bill is expected to be introduced in the U.S. Senate by the powerful head of the Senate Energy Committee, Sen. Pete Domenici, R-N.M.
Such a provision was in the recently passed energy bill but was ultimately stripped out. That's because Florida lawmakers threatened to try and stall the measure, given that their state is home to pristine beaches -- destinations that bring in a ton of money via tourism. But proponents of the measure counter that it is the one prudent solution to bring down natural gas prices
The prognosis for new natural gas finds is not good. Some facts below:
• Natural gas production in the USA peaked in 1973.
• Drilling for natural gas in the five years from 1980 through 1984 was about double the average during the decade of the '90s, but annual average discoveries were slightly less.
• 9,000 new gas fields were discovered from 1977-87, but only 2,500 from 1987-97.
• Wells drilled in 2000 were 60% above 1999, and early 2001 were about 50% above 2000. Production grew less than 2% in 2000, and less than 1.5% in 2001. After falling off in late 2001 and early 2002, drilling has increased steadily for the last 2 years while production continues to decline.
• New finds are becoming progressively smaller.
• Proved reserves of natural gas in the USA declined from a peak of 290 Tcf (Trillion cubic feet) in 1967-70 to 167 Tcf in 1989, and, with some fluctuation, have been flat since, in spite of a major drilling peak in the early 1980s as noted above.
• Of 1999 EIA estimated resources of 1,280 Tcf, 890 Tcf were classified as "undiscovered," and 220 Tcf as expected reserve growth. (Most of the discovery in the 1990s was reserve growth. How much can be left?)
Natural Gas not as Green as thought
Methane May Pack Double the Climate Punch of Earlier Estimates
NEW YORK, New York, July 19, 2005 (ENS) - The impacts of the greenhouse gas methane on climate warming may be double the standard amount attributed to the gas by most scientists today.
Methane, the primary component of natural gas, is said by the U.S. Environmental Protection Agency (EPA) to account for 16 percent of all greenhouse gas emissions resulting from human activities.
New calculations by a NASA scientist show that methane emissions may account for a much greater percentage, up to a third of all climate warming between the 1750s and today.
California plans to control methane in order to reduce green house gases. I don't know how they will do that since a large source of methane gas comes from cattle.
Calpine, GE Energy Mobilize for Construction of First 60Hz Advanced Technology System Power Plant in Energy-Deficient Southern California
As part of GE's recently announced ecomagination (SM) initiative to bring to market new technologies that will help customers address pressing environmental challenges, the natural gas fueled System represents the industry's most fuel-efficient, gas turbine combined-cycle technology and is the first capable of achieving 60 percent thermal efficiency. Powered by two GE 107H Systems, the Inland Empire Energy Center will generate enough electricity to supply nearly 600,000 households while reducing future carbon dioxide emissions by more than 146,000 tons per year compared to a typical gas turbine combined-cycle plant.
GE and Calpine do not worry about the escalation of the price in natural gas. Since the efficiency of this plant is much higher than any others it may be profitable. But This proves our future is in natural gas even with higher fuel cost. The same seems to be true with oil. California will pay any price to keep our electric energy and auto fossil fuels flowing.
Epilogue
According to the U S Energy Information Administration, the consumption of natural gas is projected to increase 50 percent between 2000 and 2020.
The U S National Energy Plan sums up the natural gas situation as follows:
The most significant long term challenge relating to natural gas is whether adequate supplies can be provided to meet sharply increased projected demand at reasonable prices. If supplies are not adequate, the high natural gas prices experienced over the past year could become a continuing problem, with consequent impacts on electricity prices, home heating bills, and the cost of industrial production. These concerns will redouble if policy decisions sharply reduce electricity generation by any other source, since it is doubtful that natural gas electricity generation could expand to the extent necessary to compensate for the loss of other sources of generation. Emphasis added.
The last sentence points out the reason that coal fired generation plants cannot be shutdown to accommodate such items as the Kyoto treaty, and nuclear plants certainly cannot be shutdown.