Coal Loses to Natural Gas

[dsm363]

I always counter that with "You don't believe in climate change anyway, do you? Also, it's American energy (coal or natural gas) powering an American built car".

[jerry33]

The FUD commenters after any EV aritlce always bring up that all electricity is from coal so EVs are dirtier than gasoline burning cars.

They probably thing NG is clean cause it never comes up.

More likely it's because they can spell coal. Spelling natural gas is a bit of a stretch.

[Robert.Boston]

No need to resort to ad hominem arguments, Jerry.

There are well-founded concerns that putting so many chips on the natural gas bet is very risky. At $2.40/MMBtu, gas dominates. But is the current situation stable? If we retire 50 GW of coal-fired generation, are we becoming too exposed to potentially volatile natural gas prices? At current gas prices, and with the lack of a national energy policy (backed with cash), most new renewable development outside of CA are stalled. There are serious challenges raised by too-cheap gas.

[neroden]

No need to resort to ad hominem arguments, Jerry.

There are well-founded concerns that putting so many chips on the natural gas bet is very risky. At $2.40/MMBtu, gas dominates. But is the current situation stable? If we retire 50 GW of coal-fired generation, are we becoming too exposed to potentially volatile natural gas prices? At current gas prices, and with the lack of a national energy policy (backed with cash), most new renewable development outside of CA are stalled. There are serious challenges raised by too-cheap gas.

In my neck of the woods, I believe we're finally getting a wind farm in Enfield. (The permitting for that has dragged on for years). And the geothermal and solar installers just keep on working full tilt, with year-long backlogs.

I wouldn't be surprised if the "big industrial" energy supplies are slowly becoming a smaller percentage of usage, versus distributed generation Has there been an overall shrinkage in grid demand? Utility-scale gas may be cheap, but residential gas is still expensive...

[EVNow]

There are serious challenges raised by too-cheap gas.

When people get serious about environmental degradation caused by fracking - too-cheap gas will be a thing of the past. Hopefully most coal plants would be shutdown by then ...

[Robert.Boston]

Agreed, which is why I call the current state "too-cheap". Prices do not reflect full costs and the depletion value.

[Norbert]

Agreed, which is why I call the current state "too-cheap". Prices do not reflect full costs and the depletion value.

"Depletion value". Currently, NG, gas, and oil companies don't really have to pay very much for the resource, right? The only really pay for the cost of getting it out of the ground. If so (not sure), that would mean they are making money selling something which I'd see as the belonging to all people. Guess that comes from the time where land and resources were practically infinite, and you owned the gold you found.

[jerry33]

Agreed, which is why I call the current state "too-cheap". Prices do not reflect full costs and the depletion value.

Not to mention the health issues and associated costs.

[Robert.Boston]

"Depletion value". Currently, NG, gas, and oil companies don't really have to pay very much for the resource, right? The only really pay for the cost of getting it out of the ground. If so (not sure), that would mean they are making money selling something which I'd see as the belonging to all people. Guess that comes from the time where land and resources were practically infinite, and you owned the gold you found.

Usually there is some form of a royalty payment to the government or a landowner. For example, off-shore oil drillers must lease parcels of land to obtain the right to explore and produce oil & gas. These lease payments, however, are set to maximize short-term revenue, and don't necessarily capture the long-term value of the product.

For those of you who have more interest in this, the depletion charge is sometimes known as the Hotelling Rent, named after the economist who first formalized the concept. If you have a natural resource that you could harvest and sell today, or store and sell tomorrow, the Hotelling Rent is the charge needed to equalize the NPV of those two alternatives. A finite resource always has a positive Hotelling Rent; the Hotelling Rent is also positive when future prices are expected to be higher than current prices.

[JRP3]

Many landowners in PA, often farmers, made a lot of money from leases and royalties. That's why a lot of people are pushing hard for fracking operations here in NY.