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America’s Big Bet On Natural Gas And Big Short On Coal
Submitted by Chris Pedersen via OilPrice.com,
America is betting the kitchen sink on natural gas. No matter which estimate you look at -- the U.S. Energy Information Administration, the International Energy Agency, or Wall Street banks -- two things are clear: the United States is slated to consume enormous amounts of natural gas and the dominant fuel of electricity generation for the last 50 years, coal, is diminishing.
First, America’s energy darling: natural gas. It is difficult to overstate the effect shale gas production has had on the United States. In 2006, shale gas production accounted for about 5 percent of natural gas production. In 2013, it accounted for roughly 40 percent. As industry leaders clamored to take advantage of the vast supply of newly accessible domestic natural gas, analysts began to forecast longer and longer projections of low natural gas prices. The result is big expectations for natural gas.
The EIA expects natural gas production to grow at a 1.6 percent annual rate from 2012 through 2040, resulting in a dry natural gas production of 23.04 quadrillion BTU in 2013 and a production forecast of 38.37 quadrillion BTU in 2040. Demand will come from residential, commercial, and transportation use, but the largest demand increase will be from the electric power sector, particularly combined cycle power plants. Today, the U.S. has a combined cycle generating capacity of roughly 190 gigawatts. By 2040, capacity is forecasted to increase to approximately 316 gigawatts.
Meanwhile, the outlook for coal continues to appear bleak. This week, the Government Accountability Office released a new report with increased projections for the number of coal plants expected to retire in the coming years. The report estimates that 42,192 megawatts, or 13 percent of coal-fueled summer generating capacity, will retire between 2012 and 2025 as a result of environmental regulations, lower natural gas prices, and decreasing electricity demand. These retirements are on top of the 150 coal-fueled units with a summer generating capacity of 13,786 megawatts that have been retired since 2000.
America’s gamble will not affect everyone in the country equally. Almost 40 percent of the retired coal capacity will take place in in Ohio, Pennsylvania, Kentucky, and West Virginia. Fortunately, Pennsylvania, Ohio, and to a lesser degree West Virginia, have economies that will be better prepared for this transition as a result of surging production from the Marcellus and Utica shale plays.
The story is the same for exports. Last week, the U.S. Energy Department gave the final approval to build two more LNG export terminals.
The outlook for coal exports is much different. Last month, Oregon’s Department of State Lands denied a key permit to Australia-based Ambre Energy to build a coal export terminal on the Columbia River. On Sept. 15, Ambre Energy was dealt another blow when the U.S. Army Corps of Engineers denied its appeal. Corps spokesman Scott Clemans said, “We could do [the review] and make a yes or no determination, but given the lack of clarity right now as to whether the required state authorization is going to happen, and given the amount of time and energy we still need to devote to this project, it doesn’t make sense to devote resources to a project that may not happen.”
For everyone’s sake, let’s hope the gamble pays off. Because if natural gas fails to live up to the high expectations, there will be less coal to back it up
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What is the calorie density of this gas again...?
something tells me to be thankful for that lump of coal last X-mas...
For several decades now, Americans ALWAYS choose poorly. We need coal.
there will be less coal to back it up...
Because the coal disappears when its NOT being mined?
I was thinking that same thought, but check out the last paragraph. They're going to sell it to other countries to burn. Because it's OKAY for other countries to release it to the atmosphere, you know. I mean, hey, we can't tell them how to keep their own air!
Doesn't matter if the natural gas is good or not, when no one will take the USD, that is all you kids will be drinking from. Get used to it, because that, is your future.
America's coal is staying right here in America. That's where it will be when and if it's needed.
America's natural gas will need subsidies and "elimination of competition" or it's staying in America, too.
If the choice is nuclear over coal, then America has made a choice it will not recover from.
"Kids" that is a funny word to use on an internet post.
Best image I could find for energy density of fuels in a liquid state, p 9 & 10 of power point:
http://www1.eere.energy.gov/hydrogenandfuelcells/pdfs/bulk_hydrogen_stor...
Funny that they promote further research into NG at the conclusion, and also note on p26 the summary of energy densities graph our great "progress" of 20 years (not!).
Because the coal disappears when its NOT being mined?
No, you moron ! It's because you won't have the infrastructure to support using coal as fuel anymore...
All you need is a fireplace.
a barbeque?
It's a damn sight cheaper to operate and maintain a mine that to allow it to collapse and start mining afresh later.
With the usual caveats about government intervention.
How much is oilprice.com getting paid to write these stupid articles about coal everyday? How much is tyler's cut?
We get it, coal is tots the greatest and china be cray for turnin' deh backs and US don gon fucked up big time by slutting with evil natural gas. Throw in an obama is satan, glober warmin' is lies from the gates of hell and eric holder is racis and we can all move on...
Your sarcasm regarding the global warming fraud proves your lack of intelligence.
ok markpower49, since you iz so smrt please take a moment to correct a specific instance where the theoretical aspects of the argument have come into error.
We've all done so. Time and time again. So much so that it becomes quite tiresome after a while...
Don't know for sure, but it's pretty low. Coal, on the other hand, is about half as energy dense as diesel fuel. But without requiring all that annoying drilling/refining stuff. Dig it up, burn it. Dirt simple. Almost literally.
From your pals at oilprice.com back when they were being paid to pump nuc energy:
http://oilprice.com/uploads/AE251.png
http://oilprice.com/Alternative-Energy/Nuclear-Power/The-Inevitability-o...
Yup, yup, yup. Time and again it comes down to the basic Laws of Nature, LOP.
Calorie density, Cost/Cal (Cost/BTU or Cost/W). Coal is attractive on both counts, as I posted yesterday 5230846
Wood, Corn and Wood Pellets, are Biofuels you can cook with. Wood is the cheapest on a $/BTU basis, and you pay 33% more for Corn or Wood Pellets than wood.
Of the Fossil Fuels: Coal is by FAR the cheapest, Nat Gas is cheaper than wood and far more convenient. For most people (unless you're way out of town), it is the way to heat. Electricity is the Worst for heating, costing 2.2x more than Wood, 2.4x more than NatGas, and a whopping 4.2x more than Coal.
Here is a Table of Relative Cost (Dollars per Million BTU), using Wood as Reference:
HEAT SOURCE COST
Wood $1,000 (Full Chord)
Nat Gas $ 909
Electricity $2,166 (the Worst for heating, even though it's 100% efficient)
Coal (bulk) $ 513 (Short Ton, 2000 lbs. Assumes Anthracite/Black Coal, not filthy Brown Coal or unbearable Lignite)
Coal (50 lb bags) $ 898 (40 bags = 2000 lbs)
Butane $1,500 (lighter fluid)
Propane $1,686 (BBQ fuel)
Kerosene $1,771 (aka Jet Fuel, and used in Kerosone space heaters)
Reference: http://nepacrossroads.com/fuel-comparison-calculator.php
The ideal (heating) stove will burn Coal, Corn, Pellets and Wood. Good luck in finding one - at reasonable prices. For most people, the most practical overall solution is: Light with Electricity, use NatGas for cooking, heating water and heating, and augment winter heating with either a Wood or Coal stove.
If you can afford Solar Panels, hurray for you, as it will cut your energy costs and give you more flexibility and independence, but the Breakeven Time (to recover your Capital investment) is not pretty in most cases. By the same token, a Coal/Pellet/Wood stove costs serious money also ($1000-$4000, depending on type and model), which also needs to be amortized. Each case varies. DYH (do your homework), crunch the numbers. Make www and Excel your BFF.
I cut firewood for the cost of chansaw gas and oil. Burn it in woodstoves.
Yeah, propane is probably cheaper, but I still heat with electric since I don't like to go get propane tanks filled in the wintertime.
Where the fuck are you buying your coal?
Mine costs me $240 a short ton, $0.12 cents a pound in the back of my truck for more than about half a ton.
I figure at about 12,000 BTU's per pound for the anthracite I burn it's 1,000 cents per million btu's.
Fuel oil, just bought 300 gallons @ $3:20 per gallon = about 130k BTU's per gallon
So a million BTU's is about 7.6 gallons or close on $25 .
Get your coal here
http://carlspoolandstove.net/Carls/Contact_us.html
Maybe they'll mail it to you.
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.Gojob360.com
I guess we should be glad that the coal will remain in the ground, exactly where it is, even if we decide to walk away from it. Might come in handy later. You know, when we have much bigger problems than arguing about phony-baloney CO2 global warming crap.
BECAUSE IF NATURAL GAS FAILS TO LIVE TO THE HIGH EXPECTATIONS, THERE WILL BE PLENTY OF COAL TO FALL BACK ON!!!!!!! there, fixed it!!!!! nodoubt nodebt
What? I couldn't read it over all the shouting
by then that coal will be owned by foreigners with better guns and the law
The coal will still be in the ground. You will be thankful for that fact when it is substantially cooler around 2030.
Fuck the temperature. I worry about the oxygen content. Check the oceans acidification levels lately. No phytoplankton, no air breathers. Pre-Cambrian anyone?
Listen. The methane, "THE" methane.
Hey, are you the same eco-murderer that brought back malaria so millions of people could die? Yeah, it's you. Not satisifed with millions of deaths because of some bullshit science about DDT? Malaria was just about wiped out. But oh no, some made up story about thin bird eggs is more important than peoples lives. Now you want to destroy cheap energy, the only thing that has improved the quality of life for billions of the worlds poor people. What is it you progressive eco-murderers want besides blood and misery of millions of poor people? Can't you murder/abort enuf unborn babies every day to sate the bloodlust?
God Damn you progressive eco-murderers to hellfire.
Grimaldus
God Damn you progressive eco-murderers to hellfire.
Grimaldus
You're like one of those small dogs barking at walls, they're just a little too stupid to keep around the house.
However, there is good news - recent tests of human brain cells injected into mice suggest the mice actually gain intelligence capacity.
We may all cross our fingers that one day you (and those like you) will be able to receive such a treatment and your intense anger may be re-directed at worthwhile targets and henceforth y'all will be less of a nuisance for the rest of humanity.
There is hope after all!
http://blogs.scientificamerican.com/guest-blog/2013/03/07/human-brain-ce...
You got the progressive obamatron assclown award of the day! Damn the facts, full speed FORWARD! At this point, what difference does millions of deaths make, right?
We are sending debbie wasserman shultz over to give you your reward; an inside tip to not to buy any oceanfront land because the seas are going to rise from global warming!
Grimaldus
take that up with my personal robot. it will be doing all my thinking & working for me then. i'll be hanging out at the warmest beach.
Don't think the Koch brothers will be around in 2030 ... no wonder they're pissed.
i really like Natural Gas.....im glad i switched over 8 years ago.....HOWEVER something doesnt seem right to me, regarding the NG storyline ?????
Always take into consideration the source of the article when you read it.
Everyone has an agenda. I have one, you have one and OilPrice.com has one.
I don't have any agendas, but let me tell you a story about this little stock I found.
I had an agenda once, but I traded it for a life filled with discomfort.
"I had an agenda once, but I traded it for a life filled with discomfort."
Marriage ?
+1023
Alibaba?
nodoubt nodebt
Anything is better than Fuc to Market's multiple dispassionate posts at weekends on the ZH top line blathering on about technical analysis on the forex.
TA: Like playing with turds in a bowl.
..with the flush going
If you live in a non-fracking area, local govs preach it as the Earth's savior in order to get federal grants in order to build infrastructure/fleets, in order to appear responsible, because, like it or not, these fools actually believe that malinvestment provides a beneficial prop to the economy.
And as we all know, without a borrower/spender of last resort, our ponzi is DOOOOOOOOMED!!!!
Natural gas be f***ed... All the hot air from parliament could float the econnomy for years!
FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck FUCK fuck
You missed a spot there.
What are you trying to say?
This ain't yo grandma's ZH and you can cuss, bitchez.
I don't know what your point is, but it is well stated.
can I quote you?
My point exactly!
Fuck to the square root of what?
Wow! That's fucked
I suspect that we will be back to digging up coal in the not too distant future.
Hope youre right, Arch Coal price is almost at 14 year lows and Im buyin
Listen. He means like 80-100 "YEARS".
"Not too distant future" = "Once it's safely (inter)nationalized"
I cannot imagine any miner surviving given the chokehold of the banksters, with the exception of those that are already safely within their fold (like say... Barrick, et al.).
Dig baby dig. Coal stocks will be like a nice powerful black chunk of gold burning a whole right through your cheap JC Penney's suit.
Fracking is good the groundwater supply
Fracking is good the groundwater supply
Nana loves a good fracking so pop says!
Fracking does wonders to former farm land as well, for the vast majority of the frack sand comes from Wisconsin.
How blighted will places like Williston, ND be once the bust comes, and how many years will it take to reclaim the land that was torn up to extract the sand?
natgas has been falling for some time
http://bullandbearmash.com/chart/natural-gas-daily-continues-sideways-br...
and is likely to remain down for some time
My old friend Dick Plude converted his pick-up truck to LP Gas .. it burns clean .. the engine runs cleaner ..this could be done on a grand scale....
Yeah, seen some farm ag-chem companies convert pick up trucks over, and in the late 40's/50's there used to be an option for many tractors.
Trouble is, fender benders can get wild, and the tanks take up cargo space in the trucks.
Good point. Since most drivers "careen" down the road in an insane momentary balance of eating, talking on the phone or texting all at 20mph to 25mph faster than the limit because they are "late for work again"................................
This cheap natural gas is extracted by fracking which will deplete, contaminate and eventually destroy the natural aquifers currently serving hundreds of millions of people. Abundant cheap gas is useless without clean drinking and irrigation water. Fracking is also cited for the multiple earthquakes that Oklahoma sees every day.
Is cheap gas really that good for the citizens or are we being hoodwinked by the powerful oil and gas lobby?
If the shale revolution does peter out (an if, admittedly), with the swithover to gas for electrical generation, it is quite likely that electrical rates for gas generation easily triple or quadruple in a short period of time just after the peak of output. Once shut down, the coal generating capacity isn't easy to reinstall.
Scammed again.
Bush invested our tax money into "Clean Coal".
Thanks!
Bullshit.
He (like obama) invested it in Halliburton, General Dynamics, B2s, etc.
The funny thing about natural gas is that it requires a lot more infrastructure to deliver and use than coal. That infrastructure also requires more "babysitting" as well.
Going to be a cold time when the bubble that is the petro-dollar goes poof.
An American, not US subject.
Note: The sly kick in the teeth while the supposed socialist CIA -Obama is in office is just more evidence as to who he really works for.
cutting out coal makes me wanna fuck her right in the pussy
Once it falls, I predict coal will be king. Tobacco will help cure ebola. Our clothes will be made from hemp. Bourbon and shine will be the only thing safe to drink. And thoroughbreds will be the fastest form of land transportation. I'm long Kentucky.
<--- Makers Mark
<--- Knob Creek
Unloading 16 each 320 ton natgas engines off a ship that are going to power the generators at natgas power plant under construction here in south texas...
Last winter Boston had gas shortages. Pipeline only one third full, factories had to be shut down.
The best example that I can think of for a termination of this gov't w/ extreme prejudice. Banishing coal will guarantee that Americans of all stripes will have to decide between heat in the winter and any number of other budget items. NG is a mirage mid to long term. Extreme well output declines tells the story.
The nuclear fleet is dying as well. Most of the power plants ordered in the mid 2000s have been cancelled. And there have been more units retired than predicted. Some fairly high profile and in significant demand centres such as San Onofre, CA.
I bet the grid operators in Cali wished they had San Onofre's 2000 megawatts up and running this week.
I'm voting against the herd and Obama I bought some WLT today 2.90 (priced below fire sale prices)
All our energy issues for the next 1000 years could be solved with thorium based fission. Just saying.
Our energy policies border on being criminal.
'America: You’ve got three more years to drive normally!'
http://www.resilience.org/stories/2014-09-15/america-you-ve-got-three-more-years-to-drive-normally
Hydrocarbon shortage. I think not.
USA's energy based solutions are fucked up to say the least.
so is /ng gonna go up?
Unfortunately NG is probably stuck at the very low levels. There are tens of trillions of cubic feet of proven gas within 50 miles of my house that have been largely untapped because the upstream infrastructure wasn't in place to support it and the need didn't exist. We now have the need and infrastructure. Have a Google look at Jonah Field, Frenchy Draw, Moneta Divide and Salt Creek to get an idea just how much gas is ready to come to market very soon.
Not mentioned is the possibility of increased electrical use for vehicles. Is the high-tension grid in condition to handle it?