Sunday, January 30, 2011 2 comments

Sunday Spectacle CVII

Note that these are electricity input costs in 2025 and aren't reflective of the current situation. It's impressive that wind cost drops below nuclear. However, note that the wind cost doesn't include backup power (from baseload plants) which is necessary to operate the intermittent wind power plants... On another note, very few would have expected natural gas to be so cheap, and just a bit above coal.

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2 Response to Sunday Spectacle CVII

Andrew Meyer
January 30, 2011 at 3:48 PM

The problem with natural gas, as I've had it explained to me, is that technology has greatly increased the cheaply available supply.  The question is, will utilities switch from coal or oil as a generating source to natural gas?

That no one knows.

The other part is, demand in the US and probably Canada has been dropping steadily since 2005.  Now if the US government pulled their collective heads out of their "you know where's" and put in sensible conservation policies, US demand could drop like a rock without affecting living standards.

Wait a minute, what am I thinking.  The last US President who did anything to decrease demand on foreign energy was Richard Nixion.  None of the current crop of bozos or potential incoming bozos is saying substantively more intelligent than "Drill, baby drill."

Sivaram Velauthapillai
January 30, 2011 at 9:14 PM

I think utilities will switch to natgas from coal. Already you are seeing many utilities avoiding new coal power plants. Instead, they are looking at natgas. Some of the EPA regulations forcing utilities to clean up their coal power plant output (by installing scrubbers and the like) is also pushing them towards natgas. Even that ExxonMobil report I linked above is predicting coal market share to drop from 40% of total electricity generation to 30% by 2030 (refer to page 30 in the pdf).

The question, though, is where natgas prices will stabilize. Right now, many natgas drillers are drilling at a loss in order to satisfy drill-it-or-lose-it concessions. So, how much higher is the long-term natgas price?

I think natgas will be a major source in USA now that more than 100 years worth of natgas (from shale gas) has been found.


I don't think conservation is a feasible long-term goal. Yes, we should try to improve efficiencies but most of the developed world is already operating at efficent rates (mostly due to the conservation efforts in the 70's and 80's). Conservation is more of a realistic goal in developing countries like China, which are very inefficient users of energy.

I also don't think the government can do much. It's really up to free market forces. The government can influence things here and there but due to political goals, incompetent politicians, and so forth, nothing much comes out of it. For instance, look at the multi-billion-dollar ethanol strategy under the Bush administration. Ethanol production was promoted by the government, with motorists forced to buy/subsidize gasoline blended with some ethanol, and it's doubtful this had any positive impact at all. Even some of the green energy efforts seem questionable.

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