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The Era of Cheap Natural Gas Ends as Prices Surge by 1000%
- melling 5y agoThat will likely cause an increase in coal usage for power generation.
- toomuchtodo 5y agoWhich is why it’s important to continue to push for coal generator retirements and demolition [1] [2] [3] [4] [5], so those plants can’t be restarted. Because given the chance, people would, consequences be damned. [1] https://www.tennessean.com/story/news/local/2021/07/31/tva-coal-fired-power-plant-demolition-move-cleaner-energy/5441989001/ https://www.tennessean.com/story/news/local/2021/07/31/tva-c... [2] https://www.youtube.com/watch?v=CfSNBn47m7E https://www.youtube.com/watch?v=CfSNBn47m7E [3] https://www.youtube.com/watch?v=WzXwx7oMXmg https://www.youtube.com/watch?v=WzXwx7oMXmg [4] https://www.youtube.com/watch?v=1D02xWn-JsQ https://www.youtube.com/watch?v=1D02xWn-JsQ [5] https://www.youtube.com/watch?v=GYaF6ERQKyM https://www.youtube.com/watch?v=GYaF6ERQKyM
- varjag 5y agoWhile particulate pollution from coal is pretty horrible, natural gas have no advantage when CO2 pollution is concerned. EDIT: apparently there's still a substantial advantage on CO2 too.
- deleted 5y ago[deleted]
- jsnell 5y agoI don't believe that's true. Natural has produces about half the CO2 for the same amount of energy when compared to coal. https://www.eia.gov/tools/faqs/faq.php?id=73&t=11 https://www.eia.gov/tools/faqs/faq.php?id=73&t=11
- deleted 5y ago[deleted]
- the8472 5y agoIt's basic chemistry. Natural gas consists of short hydrocarbons, i.e. hydrogen on those carbon backbones. Coal is mostly carbon.
- epistasis 5y agoMaybe, but if it does, it's only because of corruption. Coal is really economically uncompetitive nearly everywhere. The only reason that it's still on the grid at all is usually some really bad long-term deals made in the past, or corrupt utility execs. Utilities continue to use coal even when it loses them money: https://blog.ucsusa.org/joseph-daniel/new-ucs-research-utilities-uneconomic-coal-use-is-being-called-out-in-25-states/ https://blog.ucsusa.org/joseph-daniel/new-ucs-research-utili... Utilities also tend to use long out-of-date costs when doing they planning, and the planning modes are often not available for inspection to regulators or the rate payers.
- toomuchtodo 5y agoThis is an accurate representation of the situation. Ratepayers are locked into paying for economically unfavorable coal fired plants due to entrenched interests and/or poor long term contracts/capital market decisions, even when moving to a mix of nat gas, renewables, and batteries (or possibly some transmission and/or interconnects with neighboring electrical grids) would be cheaper. https://news.ycombinator.com/item?id=27959719 https://news.ycombinator.com/item?id=27959719 https://insideclimatenews.org/news/03082021/coal-creek-plant-north-dakota-minnesota-utilities-approval/ https://insideclimatenews.org/news/03082021/coal-creek-plant... https://www.sierraclub.org/articles/2019/10/new-report-shows-electric-utilities-are-operating-uneconomic-coal-plants-us-energy https://www.sierraclub.org/articles/2019/10/new-report-shows... https://www.forbes.com/sites/energyinnovation/2019/12/03/utilities-running-uneconomic-coal-plants-cost-consumers-35-billion-from-2015-2017/ https://www.forbes.com/sites/energyinnovation/2019/12/03/uti... https://oilprice.com/Latest-Energy-News/World-News/80-Of-US-Coal-Plants-Are-Uneconomic-As-Renewables-Costs-Drop.html https://oilprice.com/Latest-Energy-News/World-News/80-Of-US-...
- epistasis 5y agoThanks for the additional links supporting this, something that I though would be well known by the HN community as it's a very interesting technology change, I was quite surprised to be downvoted to quickly. Perhaps my use of the word "corruption" comes across as too strong. But for government-granted monopolies, the bias shown by utility planning in recent years can only be described by such a word. There's an inexplicable allegiance to technologies that cost utilities more than renewables and storage, and given that renewables would let utilities charge for lots of transmission upgrades that are a great source of profits, their behavior is really difficult to explain at all without corruption being a motivation. It can't be explained by seeking profit for investors.
- mbgerring 5y agoThis is good, because this will make renewables more competitive with natural gas than they already are, which will provide leverage to people arguing for more renewable capacity instead of gas. Natural gas has already fulfilled its usefulness as a “bridge fuel,” and here on the other side of the bridge, renewables are getting cheaper and more reliable by the day. It’s time to move on.
- Johnny555 5y agoThis is good, because this will make renewables more competitive with natural gas than they already are Doesn't this also make coal more competitive against natural gas?
- toomuchtodo 5y agoSlightly, but still not competitive against renewables. When the spot price of power goes negative, renewables aren’t as impacted as coal plants (that are still burning a fuel every minute that must be paid for, while also paying someone to take the power they’re generating). Renewables can curtail, coal must stay running.
- rob_c 5y agoYes but renewable energy is difficult to build such that its always there to meet baseline demand. That is likely to get worse if the climate shifts for different countries and technologies. Solar in the Sahara great. Wind in the uk great. Solar in counties with moderate climates requires effort to moderate between supply and demand however.
- cratermoon 5y agoBut solar is not the only renewable. Wind is pretty ubiquitous.
- stavros 5y ago
- the-dude 5y agoInteresting to note : Russia is only mentioned once at the end of the article and never specifically mentioned as a major producer. Meanwhile, the US has been pressuring EU countries for years to not source their gas from Russia ( up to sanctioning companies working on pipelines ).
- fuoqi 5y ago>Meanwhile, the US has been pressuring EU countries for years to not source their gas from Russia To force them to buy more expensive LNG produced mostly in (surprise!) the US. To me it's nothing more than a case of failed geopolitical extortion.
- the-dude 5y agoThere is more : NL ( maybe other EU countries too ) are importing woods chips from NA to burn as 'biomass' in generator plants.
- mopsi 5y agoNot a factor. Russia uses European oil and gas money to finance their grand modernization of armed forces, destablization of Europe (war in Ukraine, puppet dictator in Belarus) and proxy wars in places like Syria. No shit that the US - at least prior to Biden - opposed this. European money is going towards gunbarrels aimed at Americans.
- drewcon 5y agoMore demand just mean higher incentive to increase supply…which will reduce prices.
- mpweiher 5y agoMisleading title. Article clarifies (a little) that the surge is relative to record lows in May of 2020. For comparison, the oil price actually went negative during that time period. Starting at the price of zero, any non-zero price reflects an infinite percentage increase. Not sure how to calculate from a negative base.
- pricecomstock 5y agoYes, my first instinct from this title was "oh no, is my gas bill going up by 10x?" It is not, at all
- mrlonglong 5y agoYes it is in the UK. Energy bills going up by 10%, most of it going into shareholders pocket, which make me angry.
- marto1 5y agoI think at this point I've conditioned myself to mentally refute news headlines exactly because of slyness like this.
- cratermoon 5y agoIt's only deceptive if you think 'era' refers to anything but the last year.
- brandmeyer 5y agoIndeed. They actually do post a higher-resolution plot of prices over the last few years. The headline is focusing on a single very brief spike in prices that almost immediately reverted to the mean. A more accurate title would have been "Natural gas prices in Europe an Asia return to 2018 levels".
- rob_c 5y agoGiven the shocking scale of that graph I've got to wonder which part(s) of Asia were consuming all of that gas. I wonder if they will just switch to other polluting fuels rather than the high investment up front for renewable energy. This is potentially really bad for everyone given how relatively cleanly gas burns compared to the alternatives.
- justincormack 5y agoJapan is a very large consumer, especially with nuclear being shut down there.
- deleted 5y ago[deleted]
- NonContro 5y agoMaybe dismantling the nuclear industry was a bad idea? Particularly when the politician who oversaw it is now working for Rosneft: https://www.theguardian.com/world/2005/dec/13/russia.germany https://www.theguardian.com/world/2005/dec/13/russia.germany If anything, I really hope this spurs Europe to build out widespread modular nuclear power plants across the continent.
- epistasis 5y agoWe'd obviously be in a far better position climate wise if a lot of electricity generation in the 80s forward had been from nuclear rather than fossil fuels, and if we do not prematurely shut down nuclear reactors. (Though I think this mostly happening in Germany and Japan only? In the US our nuclear fleet is aged, and there are few life-extensions that make economic sense when compared with the current cost of renewables firmed with storage.) However, I think the picture of how rosy a nuclear future could be was oversold, even in the last century. Construction performance in the 1970s was abysmal. Even the most successful deployment, in France, stopped short of its initial plans, and did not fully decarbonize the grid. Starting new deployments of modular reactors means talking about new construction modes, modes that we have no idea at all if they will be effective or cost efficient. It's a huge gamble, that even if it pays off, won't start paying off until 10-30 years from now. Nuclear is not a technology that we can depend upon to save us now. Which is not to say that we shouldn't try, it's just that we need to have backup plans in case Nuclear can't be built.
- dTal 5y ago>. It's a huge gamble, that even if it pays off, won't start paying off until 10-30 years from now I'm sure I read this argument at least 10 years ago...
- epistasis 5y agoWe started construction of the next generation of nuclear around ~2008, and it was a gamble that has failed miserably. In the US, VC Summer was a disaster that was abandoned after many billions were wasted. Vogtle chugs along, with continual cost increases and delays, with no end in sight. At $30B estimated for Vogtle's two reactors, it is clear that no US utility will be foolish enough to embark down this path again. Europe is in the same boat with the EPR's construction failures, and it is quite clear that their gamble did not pay off. Which is why people are talking about modular nuclear reactors now, rather than large GW reactors. The industry had rejected modular reactors in the past as inherently more expensive than large GW reactors, but the difficult of constructing GW scale reactors has led them to try something smaller. Will modular reactors succeed? Who knows! We will see. But it is definitely a gamble.
- mercy_dude 5y agoDespite all the rhetoric from the leadership, US has no incentives to retire oil and gas. To maintain the monopoly of USD as reserve currency (and be able to print money forever), US needs to make sure oil is settled in USD with Middle Eastern dictatorships being the proxy doing the enforcement. Absent of oil, as US is not a net producer country anymore, there is no reason for other countries to hold USD as much. Thus I am a long term bullish on oil and gas. I think oil will go back to 120 level pretty soon in next 2-3yrs.
- specialist 5y agoI've wondering about this very thing. Asked another way: What's the renewable energy replacement for petrodollars?
- imtringued 5y agoProbably some sort of Chinese style loan program. You better build those solar and wind farms on loan in yuan or USD (supplied by the Chinese) or we are going to sanction your ass. Honestly for me the idea of adopting a single countries' currency as the currency used for world trade doesn't make any sense. At some point your country won't have a significant share of world GDP to have influence over the rest of the world economy. If you are going to adopt a global "currency" you would go for the bancor but I personally don't think there is going to be one global currency. There'll be one for each continent and it's the EU that is going to adopt an EU bancor as the first economic block because the euro is dysfunctional and cannot be maintained as it is.
- rapsey 5y agoThis is an outdated view. The petrodollar is likely less important than than the debt dollar. Countries have vast debts in dollars which achieves the same effect of pulling the dollars into international trade.
- imtringued 5y agoThe dollar as a reserve currency is very old. The world is changing around it. Thinking of it as a thing that has to be protected at all costs is very misguided.
- sjburt 5y agoThis is a pretty misleading headline. If you look at the price graph in the article, it shows prices between $5-12/MMBTU between 2015-19, a decline to around $1.50 during the peak of pandemic economic slowdown, and a rise up to $15. So prices are 1.5-3x historical values and we're coming off a price dip that would have suppressed supply. It seems as much likely that it will return to the norm as that it will continue to rise.
- fuoqi 5y agoAlso let's not forget about the amount of USD printed since 2015-2019.
- thepangolino 5y agoA big chunk of the money printed was in 2020-2021 https://tradingeconomics.com/united-states/money-supply-m0 https://tradingeconomics.com/united-states/money-supply-m0
- fuoqi 5y agoYes, this is why I wrote "since".
- 1123581321 5y agoTypically this would be written as “since 2019.” The earlier number in the date range is a bit ambiguous, especially to ESL readers.
- brewdad 5y agoThe earlier number is completely unnecessary if you intend to refer only to anything after 2019. Writing 1790-2019 would be just as meaningful (not at all).
- tomc1985 5y agoAren't they in the process of recalling some of that money?
- draklor40 5y agoGo nuclear.
- Koshkin 5y agoThe natural reserves there may be getting thin, too. (On the other hand, geothermal, for example, is pretty much limitless.)
- imtringued 5y agoGeothermal is inevitable for district heating. Renewables are good at electricity but bad at primary energy, especially in the winter.
- lenkite 5y agoPresident Biden suspended oil and gas lease sales from public lands and waters leading to massive drop of supply - a full quarter of US oil&gas production. The era has artificially ended. Thanks to this there has been a great rebound in coal demand. India has now started constructing coal plants to meet coal demand https://www.reuters.com/world/india/exclusive-india-may-build-new-coal-plants-due-low-cost-despite-climate-change-2021-04-18/ https://www.reuters.com/world/india/exclusive-india-may-buil... Coal is making a resurgence in the USA too https://www.power-eng.com/coal/eia-u-s-coal-fired-generation-making-2021-rally-so-far/ https://www.power-eng.com/coal/eia-u-s-coal-fired-generation... We are going to see the largest emissions in a decade thanks to the Coal rebound https://www.greenqueen.com.hk/global-carbon-emissions-set-for-largest-rise-in-a-decade-as-coal-rebounds-2021/ https://www.greenqueen.com.hk/global-carbon-emissions-set-fo... Congrats USA!
- olivermarks 5y agoI'd argue this is just pr promo for the 'all electric' lobby. I'm a small nuclear reactor enthusiast but we are decades away from that. In places like California where the electric grid is mostly a 3rd world above ground shambles, and where pge turn off the power if it's windy or they have caused fires in summer this will literally mean turning off all energy in a world where gas and gasoline are outlawed. Not viable.
- bww 5y ago> Mark Gyetvay, the deputy chief executive officer of Russian LNG exporter Novatek PJSC, warns that the green movement could disrupt the delivery of adequate and affordable supply to consumers. Russian natural gas executive says promoting alternatives to his product hurts consumers. Ok.
- Koshkin 5y ago> by 1000% I am confused: is it tenfold or elevenfold?
- dane-pgp 5y agoWell, it’s one louder, isn’t it? It’s not ten.
- azureel 5y agoAnother reason for increasing gas demand might be related to global drought. I'm from Turkey and last year the energy production was 30% from hydro electric, 20% from natural gas conversion. This year, there is a severe drought here and the ratios swapped, 30% nat gas vs less than 20% hydro. Maybe other countries have similar problem, especially in Asia, so that may explain the demand.
- cesarb 5y ago> Another reason for increasing gas demand might be related to global drought. [...] Maybe other countries have similar problem AFAIK, that's also the case right now here in Brazil. The rain in most hydro power basins has been much lower than the long-term average, and to prevent the reservoirs from becoming empty (which would be a disaster, not only because of other water uses like drinking and irrigation, not to mention the damage to the ecosystem from the rivers becoming dry, but also because there is not nearly enough non-hydro power generation capacity to power the whole country), there has been an increase in the use of thermal power generators, many of them powered by natural gas.
- hamilyon2 5y agoWe should leave some easy accessible hydrocarbons for the next human civilization to have something to start with. I mean, when our one collapses.
- yc-kraln 5y agoPlease stop calling it "Natural Gas". It's fossil methane.
- doodlebugging 5y agoIt is a naturally-occurring gas. It has always been called "natural gas" as a result and there is nothing misleading or inaccurate about the name. I think most people understand this.
- aussiegreenie 5y agoEnergy is falling in price and will continue to fall for the foreseeable future. Fossil fuels will rise in price primarily due to under investment and solar and wind will continue fall at about 7% pa. Already "Solar Barrels of Oil" (1.7MW-h) are under USD 20 and falling. Also, due to efficiency of modern electronics you get a lot more work from e-oil rather than black gold.