This 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.
So my takeaway from this is that the trade in LNG is going to expand. Good news for US natural gas producers. This price differential is not sustainable given the ability to ship LNG.
This article below mentions that shipping LNG between continents is now profitable and transporting energy via a gas network is more efficient than electrical transmission (<0.1% loss vs 8%). Electric transmission has benefits in other regards/uses though.
I’m also interested in the idea that we could overbuild solar/wind arrays and make SNG (Sabatier reaction) or town gas with the excess energy. Even if the process is currently 30-40 % efficient, renewable energy has come down in cost enough to make a 2x or 3x larger array more reasonable, all things considered (e.g. environmental concerns).
>transporting energy via a gas network is more efficient than electrical transmission (<0.1% loss vs 8%).
That's only one half of the equation though. You'd have to integrate the efficiency loss from transmission with the effiency loss from burning gas in multiple smaller generators rather than one large one with electrical distribution.
What P2G can do is allow one to stack several benefits from the one-time cost of making the gas: storage at the generation site, transmission, and storage at the far end of the pipeline.
Off topic but...Does anybody else find the use of large percentages to show growth as annoying as I do?
1000% is an 11x increase but to see that easily you have to enumerate the values 100% = 2x, 200% = 3x, ... , 1000% = 11x or do a quick inductive proof.
Why not just say 11x? The article pointed out that Asian LNG prices increased six-fold.
The 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).
This 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.
People look at me funny when I say I hope gas prices go up. It’s just basic economics - we’re running up ruinous externality debt, so just about anything that pushes us towards sustainability is good.
There should be some incentive not to drive an F350 to an office job…
I'm with you. I've been saying "gas is too cheap", half joking, for years. That's just based off of watching people's use of their vehicles, having not the slightest concern for gasoline cost. It's not even considered in the list of tradeoffs when making plans.
I think it should be expensive enough so that at least a median income person making a completely frivolous trip stops for half a second to consider the cost.
I'm sure it's more complicated than that. Lower income folks who have less of a choice, for example. A real policy would take some work.
The best approach would be to gradually phase in a revenue neutral carbon tax where an equal amount of money is rebated to everyone. That way those who use less fuel than average would end up financially net positive.
Except that the people who use the most fuel are not the most wealthy. People in rural or low cost areas who need to commute. People who work shifts at odd hours. Trades who need to carry tools. The people who buy the least gas are those who can work from home and drive a Tesla: rich people. They don't need more money.
This is cherry picking examples from different income bands. We know that people in higher income bands consume more fossil fuels per capita, on average. They would therefore pay more carbon tax.
I would guess that Tesla owning households still have higher than average fossil consumption at present because their higher incomes also positively correlate with flying more and consuming more goods that were at least partially made with fossil fuels. The very poorest people in the US can't afford to drive even a used car.
More fossile fuels/energy for thier lifestyles, yes. Gas for thier cars, no.
London realized this as the early efforts to reduce costs for zero-emmission vehicles went to Tesla and BMW owners, not the tiny/cheap electric cars everyone expected to come to market.
> More fossile fuels/energy for thier lifestyles, yes. Gas for thier cars, no.
"revenue neutral carbon tax where an equal amount of money is rebated to everyone" doesn't sound like it's specific to gas for cars.
> London realized this as the early efforts to reduce costs for zero-emmission vehicles went to Tesla and BMW owners, not the tiny lightweight/cheap electric cars everyone expected to come to market.
Is that bad? Normally those incentives are a fixed amount per car, so in climate improvement per dollar it should be similar or even better for big fancy cars. And anyone that designs a small cheap electric car can still get the incentive, so it's not like those fancy cars are to blame if there's a lack of them. And we are getting more variety as time passes.
If you want to give less money to rich people, don't exclude them from the car incentives, give them an unconditional tax and let them get money back with the car incentives.
The congestion charge was meant to reduce congestion. Seeing giant teslas sail through without paying was not the intention of the zero emission exemption. Planners expected electric minis, not electric supercars.
I don't think the people making the law are fools. If they didn't put in a size requirement, that's on purpose.
Also big cars don't congest much more than small cars, do they? When you take into account the space between vehicles, the difference isn't that great.
(And again if the issue is expensive cars specifically, you don't want a congestion charge or a fuel charge, you want a supercar charge or a high-income charge.)
No, it's meant to remove the most polluting vehicles from the London area, which it will succeed in doing. Remove the pollution and the health benefits are soon realised. Hopefully by the 2030s people will breathe a bit easier.
Then they should stop driving so much. That’s the whole point. A tax that discourages any large amount of people to drive gas guzzlers is working correctly.
Europe is filled with lower and middle income people as well. They don’t take jobs with a 1 hour drive using a truck that gets 13 MPG.
A way to avoid that problem is to make the carbon tax more targeted in the beginning. People in rural are not in danger if we started to tax oil, gas and coal power plants based on how much they pollute.
After that we can add a carbon tax to the transportation sector by adding a tariff that scale with carbon pollution.
After that, carbon tax newly built home heating systems.
After that, continue to add new carbon taxes while monitoring who get effect until one can't add more without harming people who has no choice.
If the price go up everything will be extracted. I would prefer the price go down because of competition of renewable energies with low prices. If price stay low gas and oil will not be extracted at all and will not been burn.
You say gas should go up, but how are they going to pay that cost? This is what the yellow jacket protests where about. Relatively well off Parisians dictating how the rest of the country should work.
If you could designate a certain trip as your commute and kids' school and get reimbursed for the tax on that, it would fix some of the distributional effects.
The better solution would be to perform that job from home rather than to drive something smaller or use public transport. Our addiction to insane levels of mobility is one of our biggest problems.
Mobility is very much related to notions of freedom and quality of life. I can see the argument for doing away with unnecessary in-person work and commutes, as an optimization. But we live to experience life, not to only participate in a fixed set of local activities approved by the state. Motor vehicles are a big part of many people’s lives for enabling leisure activities, without which life is very limited. Committed urbanists, like those who are content with NYC as their entire world, may have trouble seeing this. But I feel a majority of people want and need mobility beyond what walking, biking, and fixed transit routes can offer.
Have you ever seen any calculations about changes in energy usage patterns and environmental impact if all jobs that could be made remote were converted? It would definitely reduce commuting costs, but would also lead to more energy use in residential sectors (e.g., cooling). It seems almost guaranteed to be a net win environmentally.
No, but I'd definitely be interested to read them, I do recall some mentions of COVID-19 related reduction in smog and other pollution from the beginning of the pandemic.
You should do a little research, we're taking about natural gas not gasoline. The supply, demand and price are only loosely connected and nobody drives an F350 powered by natural gas.
Natural gas predominately displaces coal, so you must really hate the earth.
And ... you're wrong. In retail the majority is gasoline and diesel for the really heavy applications, but fleets of carbon emissions conscious companies buy the LNG version. In total some 50 K over the last decade. Maybe that's statistically nobody to you but it's a lot more than zero and besides that you're engaging in goal post moving.
Same with other classes of vehicles such as VW vans in the passenger version, the 'normal' ones are all diesel, the fleet version tends to be bi-fuel with a relatively small petrol engine and an LNG underbody tank system. This is a popular solution for taxi fleets in Europe.
And as diesel is coming more and more under scrutiny you can expect the LNG/CNG version of these cars to gain in popularity.
>but fleets of carbon emissions conscious companies buy the LNG version
A rounding error compared to all the other trucks/vans/commercial vehicles.
Go look for CNG vehicles from pickups and airport vans on up to heavy trucks on the heavy equipment section of CL and machinery trader. You will see how few and far between they are.
No need to be condescending, I know the difference between natural gas and gasoline. My point was more general about carbon based fuels and their price to consumers.
F150 is going electric, so at least men will be able to suggest their penis sizes in a sustainable manner. Still, what a waste of raw natural resources and materials.
The EPA does not even produce fuel economy estimates for vehicles as large as the F-350, but data I can find gives about 13-14 mpg in real world use, perhaps about 20 mpg on the highway in ideal circumstances. Meanwhile the 2021 Outback (which is not particularly fuel efficient) is EPA rated at 26 city/33 highway, which is significantly better.
When you add in that diesel emits 13% more CO2 per gallon than gasoline, that's not even close, the f250/f350 is emitting at least 75% more CO2 per mile.
A WRX has a combined mpg score of ~23mpg. So even the worst case scenario (a tuner car) and the best average you provide (20mpg) we see that the WRX get takes 4.3 gallons to go 100 miles while the f350 takes 5. The ridiculous tuner car is 15% more efficient than the _unloaded_ f350 with the most efficient drive train.
I'm not sure why you're being downvoted. Diesel pickups tend to get high teens unloaded, depending how they're driven. Mine gets around 20mpg on the highway.
Diesel is more energy dense, so better to compare it to a VW TDI of 40+ MPG. You are still hauling around all that weight. I have always wanted a VW (Rabbit) pickup.
I don’t know why there are no diesel-electric trucks. If you need torque, do what trains do.
>Natural gas has already fulfilled its usefulness as a “bridge fuel”
Seeing how Poland still gets approximately 70% of its electricity from coal, I wouldn't say so. Also until the grid-scale storage problem (at least on the level of storing several days of grid consumption) will not be properly solved (personally I am fan of underground pumped hydro storage built on top of artificially dug cavities), I don't think we will see large predominantly renewable grids not backed up by natural gas power plants.
And don't forget that natural gas consumption is not only about electricity. But also about heat generation (both in households and industry) and production of various chemicals.
It also makes coal more competitive. We need a few more years of cheap natural gas to finish shattering the coal industry and make it too expensive to spin up.
Which is likely the route certain counties will go down given the huge up front cost of renewable energy still.
(the elephant in the room being capacitive storage)
Slightly, 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.
Yes 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.
In addition to the other links here, I would add that grid modeling of renewables matched with weather records shows that it's fairly easy to get to 70%-80% renewables without massive storage or new technology. And even in France, this is the level of penetration that nuclear was able to provide.
Germany is a country with absolutely terrible solar resources, but even they are starting to make solar work on their grid. And they spent a ton of money to subsidize the solar industry in its early days to drive down future solar prices. So even the worst case scenarios for cost are not hopeless.
So how recyclable are the components in this tech compared to wind or using giant solar furnaces?
Not to mention the ceiling in Si based solar panel carnot efficiency which the whole industry is banging it's head against the table over.
Solar is to renewable as fusion is to fission 30+ years away. At least with fission the promise is clean limitless energy not higher efficiencies and the ability to recycle materials in a slightly less labour intensive way
It's funny, nobody ever asks about recycling thermal plants, they only ever ask about the waste that comes from solar panels or wind turbines? Why the double standard, I wonder?
In any case, the biggest expense of solar panel recycling is transport of the panels to the recycling center.
> Not to mention the ceiling in Si based solar panel carnot efficiency which the whole industry is banging it's head against the table over
I'm not following what you're saying. Carnot efficiency is a limitation of heat engines, not solar panels. And nobody is banging their head into solar panel efficiency limits, increased efficient of panels only enables cheaper costs. In contrast, the limited efficiency of large heat engines, such as nuclear or gas or coal electricity plants, means that waste heat must be dissipated into the environment. And when using natural bodies of water for this, the common choice, we are going tons be turning off a lot of these more often as the climate warms. This is already happening frequently in Europe. Solar panel efficiency declines a bit in heat, but they don't trip off.
> Solar is to renewable as fusion is to fission 30+ years away. At least with fission the promise is clean limitless energy not higher efficiencies and the ability to recycle materials in a slightly less labour intensive way
Solar is here today, we deploy hundreds of gigawatts of solar each year across the globe. It's the cheapest source of energy nearly everywhere in the world. Even the IEA, an organization hostile to renewable energy that constantly tries to undermine it in their editorial choices and modeling scenarios, to the point that the IEA is now considered a joke by many in the business community, has had to admit that solar is cheapest:
Recycling a mirror is much easier.
Recycling or improving the thermal chamber largely involves recycling high percentage pure (to withstand heat) metals.
Recycling embedded silicon solar panels involves breaking the glass from the substrate reliablely and safely.
Extracting the low percentage high value rate earths.
Then repurifying the Si from the expensive dopants to remake a panel.
Designing solar panels to make this easier losses vital efficiency percentages.
Not to mention most solar panels claim to pay for themselves in 100yr in some regions but have a lifetime of 30yr. So yes then recycling must be built into the model.
And of course common to both electrical motors used for panel positioning and orientation. Which are a common repairable and understood thing.
You always see snarky HN comments talk about how energy storage technologies don't exist. The reality is that we are drowning in grid storage tech but there is barely any demand for it because we haven't even reached the maximum potential of a renewable grid without storage. There simply isn't enough excess energy to justify it. There are some load shifting setups that extend solar energy 4 hours into the evening but that is about it.
Hydro already provides more than both of those, and they often come with their own reservoirs so they are able to easily handle changing load requirements. Not that we have many hydro opportunities left, unfortunately.
And - and this is often underestimated - it's fast. Hydro can spin up in an extremely short time, dealing with fluctuating demand in on the order of seconds. A typical example is everybody hitting the kettle/coffeemaker during rest time in an international soccer match. That is a noticeable increase in load and hydro can cover that without even trying hard, whereas for nuclear or coal there is no way that they could compensate for such a surge so quickly so unless you have some hydro to back you up you'd need to run those plants at well above the current load to be able to catch the spike without a problem.
Most dams here put west still have water. Some dams have shut down. They also have more water to work with in spring than late summer even in normal non drought seasons (assuming they are fed by glaciers).
True (for fission), but right now we don't need to find a fuel source that doesn't run out, we need to find one that doesn't pump CO2 out into the atmosphere.
This promptes the use of gas over a carbon neutral emitter like nuclear as a significant part of the can be ramped up/down solution. It will doesn't address the problem of evening out supply.
I'm 100% certain we could go to a co2 neutral solution not one involving nonsense like clean coal or gas. You need to buffer supply and demand from __any__ supply to increase efficiency. If your not doing that we might as well start burning trees for power
We expect that U.S. consumption of natural gas will average 82.9 billion cubic feet per day (Bcf/d) in 2021, down 0.5% from 2020. U.S. natural gas consumption declines in the forecast, in part, because electric power generators switch to coal from natural gas as a result of rising natural gas prices.
Maybe, depends on the cost of battery storage. Regardless, it’ll likely be cheaper to overbuild renewables and curtail when needed instead of keeping fossil generators around.
The alternatives aren't ready yet though, except maybe nuclear. And in the US, natural gas is still the only readily available means of heating and other buildings. And even when alternatives appear, even with subsidies most people won't replace their existing systems until the old ones wear out, unless prices increase so dramatically that people can't afford to pay the gas bill. And if that happens, we could see more poor people freezing to death in the winter because they can't afford to heat their homes.
And then there is the wider impact on the economy, if this causes sustained high inflation that could further increase wealth inequality.
My hope is that this leads to harvesting more methane (natural gas) from cattle waste and similar sources.
> The alternatives aren't ready yet though, except maybe nuclear. And in the US, natural gas is still the only readily available means of heating and other buildings.
That's not really true anymore. While heat pumps have been popular in Europe and Asia for a while, they are taking off pretty quickly in the US and Canada in the past few years, even in colder climates.
I'm in the Great Lakes and I heat an old drafty Victorian with a heat pump - I'm saving money and literal tons of carbon emissions over natural gas.
Heat pumps don't work very well below 40 Fahrenheit. There are a lot of places where that makes them practically useless in the winter. It may be regional. Where I live at least, most hvac retailers only offer natural gas heaters.
I thought this in the mid-2000s, but the landscape has changed drastically since then in two ways: 1) solar wind and storage are decreasing in cost exponentially, and have crossed the inflection point where solar+storage is a firm energy source cheaper than building new fossil fuel infrastructure, and definitely cheaper than nuclear. 2) Attempts at building nuclear in the West over the past decade have revealed that our economic strengths no longer mean that nuclear construction is efficient or even reliably able to be completed. Since the 1970s, economic productivity overall has soared, but our construction productivity has barely improved. So, large construction projects that might have made sense in the 1970s are no longer economically efficient.
Nuclear has proven to be very unreliable to build due to massive complexity compounded by the need for extreme accuracy in construction, since we don't want to need to go in to fix core components after they've been turned on. This is precisely what advanced economies are not good at.
For places that can rely on exclusively solar, solar and battery start to make more sense than nuclear. Currently it is profitable to have around 3-4 hours of 80% of capacity, which is economical if you get a daily charge cycle it where in the day you charge them and during the night you get paid by discharging almost 100%.
Wind is a very different beast in term of charge cycles and capacity requirements. We are nowhere near having it economical to install batteries with multiple weeks long capacity that get a charge cycle of a few times a year. For that you need stored energy technology like reverse hydro or hydrogen production, and they are are quire bit away from being economical sustainable. Reverse hydro has many issues and has resulted in a declining optimism in the last decade, and using wind to produce hydrogen cost about 6 times as much as any other hydrogen production method. And we don't currently burn hydrogen for power as it is already prohibitively expensive. Still it seems as our best bet for storage, which should give a hint how the economics are between nuclear and storage.
I agree America has lost its ability to build big complex things but maybe that’s just a challenge we need to overcome. Certainly other nations like China aren’t having trouble building new generation nuclear plants. There is mounting political will across the spectrum to invest in nuclear (https://michaelshellenberger.substack.com/p/finally-they-adm...), and maybe we can use that as a route to reinvigorate American construction and manufacturing industries.
China is also having difficulty building nuclear reactors. Though they still complete in seemingly reasonable timelines to Western ears, it's still up to two times as the schedule completion.
Michael Shellenberger is not a reliable source in my experience, he's far more invested in ideology and pushing cultural wedge issues than the technology and providing real solutions.
Yes the boiling water nuclear plants designed in the 1950s are massive, complicated, and expensive to build. I don't think anyone is suggesting that we start building more of those.
Got any evidence that nobody wants to build the same style of big reactors we currently have in our fleet? Because more than half of the people that I talk to that support nuclear want exactly that. There are two reasons that I hear in support of this: 1) we did it before, so people think it's a good idea still, and 2) that's the only type of reactor that we have designed and could start deploying today. It's the type of reactor that Rosatom will build, it's the type of reactor that China is building.
Other reactor types are far far far out on the design schedule, and more speculative in terms of technological success than any of the many new types of battery chemistries that have been announced this year.
The new Summer plant reactors in SC were abandoned during construction after spending 9B. The units were nameplate rated at 2200 MW. Even at the point of abandonment, the cost of a MW was over 4 million. Solar is 700k to 1MM per MW. Wind is about 1.3MM per MW. Even adjusting for capacity factors nukes are more than twice as expensive per unit of capacity. Neither solar nor wind require difficult to produce fuel, produce nuclear waste, require waste heat reservoirs, or require years long complex and expensive decommissioning (which in the US is paid as a surcharge on electricity used). Solar or wind do have subsidies but nuclear gets a subsidy in the form of the Gov backstopping meltdown insurance (the current pooled industry meltdown insurance fund is like 20B, Japan has spent 200B+ cleaning up Fukushima). You don’t have to be anti-nuclear to think these huge projects that we can’t build don’t make a ton of economic sense at the outset (even factoring in the more desirable production characteristics which can be offset by more storage and/or overbuilding wind and solar capacity). In theory modular nuclear will solve some of these issues but in theory practice and theory are the same thing but in practice they aren’t.
Definitely. Solar and wind take it on that metric too (though I don’t have those in front of me). Add to that it isn’t a trivial calculation if you include project risk. What is the LCOE of the Summer reactors? Does that HUgE failure impact the LCOE of the class?
Tbh the math is changing - largely due to the cost and complexity of nuclear projects.
If your spinning up a new GW of generating capacity, it’s easier to find spare room that no one fights over with solar/wind than it is to find a spot for nuclear.
Could we have faster permitting of nuclear plants and apartment buildings? Sure, will we? Almost certainly not.
I'm not against nuclear but I am against the old style reactors. You put in tens of billions into a single plant. The sunk cost fallacy is huge. People will cut corner because it means saving a billion here and there. We can't even update them. If the original design is flawed we'll have to keep running them.
It would be better if they were like cars or solar panels. Good for 20 years and then you replace them. With something as dangerous as nuclear the benefits of longevity are strongly outweighed by the downsides of keeping immature technology around.
To keep it short. Nuclear is not an attractive product. Change that.
This is bad, because it will incentivize more natural gas being drilled and burned. The long term logic is ironclad and simple: Given a price P of a resource, all recources available cheaper than P will be eventually dug out and used. The only feasible way to stop digging fossil fuels is to get their price so low that it is not worth extracting them.
That’s not the only feasible way to accomplish this. Taxing natural gas enough would accomplish this too. Banning it’s use will do the trick also. Making usage of alternatives cheaper is another way.
In a democratic nation of laws you could tax or ban something profitable (although even there it's a tough sell getting people to vote for higher taxes or costs), but in an oligarchy like the US, that lobby, those oligarchs, will work to undermine those regulations, e.g. by buying off Senators to vote against banning/taxing. Call me cynical but I agree with the GP that if there's money to be made, it will be made, regardless of the consequences. The government has kind of become just another part of the economy, in some sense.
Those are just some of the means to get the price of natural gas lower, which is still the only fundamental reason that reduces the amount of gas/oil/whatnot being dug out.
The fundamental reason that fossil fuel is pumped out is because people buy it, and the price is a reflection of where supply curve meets the demand curve.
People will choose to buy less if alternatives are cheaper and accomplish the same needs, but with something like fossil fuels where all the infrastructure is already setup and fossil fuels are convenient, the end user price going down almost certainly means demand going up.
The only way less fossil fuel is consumed is if people cannot afford it (equivalent to prices rising) or if people prefer something else. Or if there are less people overall period.
If people can't afford it, it means it is expensive, and only way for it to be expensive is that someone can afford it. And the more expensive it is, the more it is going to be extracted. In the end, it is very simple. You want to stop fossil fuel consumption, you need to get the price paid to the producer so low that the producer does not want to produce. Producer price can be high only if someone is willing to pay it.
In economics terms, you do not only need to get price down, but the whole demand curve. That is, with any given price, there needs to be less demand than currently is. The supply side is fixed. Anything profitable will be extracted and burned. I do not see how anyone can disagree with that.
You move along supply and demand curves to come to the price. Prices move according to demand and supply curves, not the opposite.
For example, if fossil fuels became 10x cheaper, that will flow into all economic activity that uses fossil fuel to be cheaper, which is basically everything. Which then means people will consume more of everything, because that is what people like to do.
The supply side of fossil fuels is definitely not fixed. It is true that sufficiently low fossil fuel prices will cause some producers to not make a profit, who will then stop extracting fossil fuel. But due to the nature of fossil fuels being able to facilitate in almost all aspects of life and being a very fungible source of energy, eventually the steadily increasing demand will cause prices to eventually increase (unless sufficient alternative sources of energy are available at sufficiently cheap prices and convenience).
The world has 8B people, with more than half who can easily consume far more fossil fuel as they gain more wealth and catch up to developed nations. Making fossil fuels cheaper just means more poorer people will gain the ability to buy bigger cars, air condition their homes, start flying to places, etc.
of course you can also shift demand curve. If you have current price P and demand D, and you slap a tax T on top of the price P, the demand at price P is going to be lower, thus the whole curve is shifted.
Yes, ceteris paribus if you lower the price, there is going to be more demand. But you can't lower the price ceteris paribus because there is not going to be more supply. So in order to lower the price you need to figure out a way to lower the demand. Be it regulation, taxation or cheaper alternative products or something else. As long it is cheaper to run a solar panel than a generator in a developing country, it does not matter if the fossil fuels become 10 times cheaper, people will use the solar panel.
Higher price means higher resource extraction and consumption, that is a fact that you can deduce by just looking a the supply side. If you double gas/oil price, for sure more is going to be extracted? (And by price I do not mean post-tax/regulation consumer price, but the price the gas/oil producer gets from the commodity in the market)
To get prices low, you need to have demand lower than supply. If you want actual consumption to be low also, that means absolute demand has to go down to a tiny fraction of what it is now. It seems to me the only to achieve that is actual regulation - prohibit the use of fossil fuel.
I'll be honest. I don't understand what you said because you are making hidden assumptions that heavily affect outcomes without telling anybody what they are.
Is it a sellers market and buyers are outstripping supply? Big profits, dig everything up.
Is it a buyers market and sellers are outstripping demand? Low or no profits, keep it in the ground.
High prices don't mean high profits. Low prices don't mean low profits.
Once you add a carbon tax you have a high price with low profits. Some countries subsidize coal mining. The price of coal is cheap even though there are high profits for the companies.
>> The only feasible way to stop digging fossil fuels is to get their price so low that it is not worth extracting them.
Not sure that would have the impact you think. In convinced that suppliers would just stockpile in this case. Remember at the start of lockdown when cude turned negative on the stock markets.
Didn't really do much other than push the price of petrol in a car tank upwards.
Based on my family's connection to the oil industry (farmland being drilled in OK), when the prices drop, they stop pulling out oil. It's stockpiled by leaving it in place, there's no point in pulling it out when that means you have to pay the landowners and find a way to store it for the longterm.
Cheap fossil fuels tend to create demand in the form of less efficient energy use. After all, energy efficiency costs money.
If you look at periods of cheap gas they typically lead to more use of flights, bigger and less efficient cars, and a reduction in alternative investments.
Compare the cars from the 70s oil shock like the VW Golf with the SUVs of the 90s.
If you don't get out of the mindset that unrestrained neoliberal capitalism is the only way to organize our economic affairs then yes, that's the only feasible way. Meanwhile in sanity-land there are multiple ways to tackle this problem, the simplest of all is to simply price externalities correctly to end this outrageous situation where our future is being plundered to enrich some people today, and then use the revenue to fund a Green New Deal.
Pricing externalities correctly just raises P, which leaves more fossil fuels in the ground.
No need to berate OP for outlining a simplistic model of a market solution. The hard part isn't creating the policy anyway, it's having the political capital to get it approved and put into law.
As I said in a different comment. There isn't just P there is also C (as in cost to extract). P-C is your profit. Raising taxes increases C and thereby lowers the profit incentive to extract resources. The idea that the profit margin is fixed is stupid.
Isn’t pricing externalities correctly exactly the neoliberal capitalist solution to these sorts of problems? I suppose ignoring that’s what you meant by “unrestrained”, but at that point you’re really just describing laissez-faire capitalism obliquely. Neoliberalism is all about using the market to solve problems instead of direct government intervention, so pricing externalities then letting the market take care of it is classic neoliberalism.
Edit: And that lobbying and competing interests get in the way of actually pricing externalities correctly is the most obvious flaw of modern neoliberaism, but the theory isn’t the issue there.
> Neoliberalism is all about using the market to solve problems instead of direct government intervention, so pricing externalities then letting the market take care of it is classic neoliberalism.
By neoliberal standards even a CO2 tax/tariff would be considered government intervention that must be avoided at all costs. Neoliberalism is about diminishing the role of the state in the economy.
Capitalism itself has enough leeway to introduce a CO2 tax, neoliberalism doesn't because it is a self contradictory mess of wishful thinking. For neoliberalism letting lobbying and competing interest get in the way is part of the idea.
There's still a lot of potential to continue using natural gas as a bridge fuel. In particular we should be aggressively converting the long haul truck fleet over from diesel. It's going to take many years until batteries are adequate for most over-the-road trucks, especially team driven trucks that sometimes run 22+ hours per day.
What is the non-progressive argument for helping poor people survive climate change? The cheapest policy I can think of is welcoming in more climate refugees to the west. But I don’t think that would be popular on the right for other reasons.
I’d venture that there are plenty of conservative folks who want to help the poor, at least in the Christian communities. Maybe not so much in the libertarian contingent.
Help them stay where they are, absolutely. Never met a Christian conservative who was pro- expanding refugee immigration despite working for an evangelical church myself. Even destitute Christian migrants at the southern border are told to go back home. They much prefer to go to Africa to proselytize there, in my experience.
Energy from natural gas is much lower emission than coal and very cheap and easy. To fossil fuels by 2050 you'd need to be building a nuclear plant every three days to get it all done by then. That natural gas is being dismissed shows anyone looking at this seriously that net zerio will never be achieved.
There are two competing goals. One is to help poor people get out of poverty. This leads to more consumption in the short term and this increase in consumption is partly offset by the fact that richer people tend to have fewer children. The other competing goal is to try to stem the great environmental damage humans do as a result of their consumption. It does no good for everyone to be rich if we are all swimming in our own shit.
When a given topic comes up one goal will carry more weight than the other. There are similar instances of this phenomenon with all political movements.
We'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.
We 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.
How does that nuclear project stack up to an other major energy project in 2010, the keystone pipeline. How much did people pay for that and what did we get in return in terms of $ per energy produced and pollution.
I don't know much about the Keystone pipeline, but I don't think it can be directly compared. It's more like transmission than generation.
And an oil pipeline use is to reduce costs of bringing oil from a particular area to market. It doesn't necessarily have benefits that translate to the entire market, unless the change is so big as to move the entire market. And I don't think Keystone was that big, but couldn't say.
Also oil is not generally used at all in our electrical grid. Far to inefficient, and far more useful as fuel for vehicles.
Further, VC Summer has delivered zero benefit to people, despite it costing the average utility bill an extra $20/month last I heard. Keystone has had several phases complete, so there has been oil delivered to markets.
It is not a perfect comparison, but there are some related aspect to it. The company behind keystone pipe line is the energy company TC Energy, and I think a lot of the natural gas that they burn do comes from the oil refineries and oil fields.
Through the aspect I wanted to bring up is that an energy company spent tens of billions on just transporting fossil fuel from one point to an other. Since it is the customer that pays for it in the end, I suspect most would prefer that their money went somewhere which does not contribute to global warming. If I were a customer of TC Energy, I rather would have seen a failed nuclear plant than a failed pipeline for fossil fuels.
No idea if it will be cost effective? Are you insane? The enthalpy of nuclear fission is an order of magnitude, at least, over chemical fuels. It's all red tape. There's not technical challenges in old designs. New designs are better but not necessary.
Can you explain how increased enthalpy makes nuclear fission cheaper? Shouldn't it get more expensive because of the dangers inherent to high enthalpy?
We didn't build nuclear weapons because they were cheaper, we built them because we desire danger and more danger requires more enthalpy.
By that logic even civilian usage of high enthalpy carries the risk of danger.
It's a simple concept, but it has nothing to do with the theoretical or practical costs of a nuclear reactor for boiling water to turn a mechanical steam turbine.
It is the first step (without going into nuclear physics) in calculating how much energy is released. You take the enthalpy of the fission reaction, joules per gram input, and that dictates everything after. In fission reactions you get (iirc) giga or megajoules per g instead of kilojoules per g.
Again, this has nearly nothing to do with the actual costs involved with turning energy into electricity. We are how many comments deep and you've failed to explain anything about your original comment?
This sort of bullshitting attitude is why nuclear gets a really bad name. It's supporters do not understand it well enough. And if recent history is any guide, neither do nuclear's practitioners.
We agree that nuclear power is a better power source than fossil fuels on pure technical comparison.
Your opening comment implied that nuclear power would be strictly cheaper because of the higher enthalpy. If all costs were equal, you would be correct. All costs are not equal.
The nontechnical costs are made up FUD. If you cut that out then it is a better solution, and considering the FUD is ridiculous. It's better to properly educate people.
Not 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.
> 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.
Given 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.
Misleading 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.
Indeed. 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".
> 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.
Which 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.
Maybe, 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:
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.
This 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.
Thanks 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.
"Entrenched interests", then. It's characteristic of the postwar global economy. Big companies who made a fortune producing weapons to defeat the Axis worked hard to prevent a meaningful postwar demobilization by the US. Of course all that military power also made it possible for us to politically and economically dominate the world. So, a two-fer.
My first apartment, in late 70s South Jersey, had gas heat while a lot of old construction in the Northeast was solidly slaved to oil. The economics of gas were well known 40 years ago, but all those oil burners needed to fail first. There was actually a resurgence of coal around that time.
I was big on nuclear right up until 1979, when TMI finally made the case that it might not be the panacea advertised: at least as deployed by the (monumentally corrupt) 20th century private energy sector. Just prior to that the biggest challenge everyone agreed had to be overcome was the waste problem. Seems no one wants to talk about that any more. Today's nuclear advocates sound more and more like the overoptimistic cheerleaders of the 50s and 60s.
Anyway, we just replaced our outdoor gas pack a few years ago. At the time I balked at the few thousand more that a heat pump would have cost (heat pumps make a lot of sense in the South where we now live). Looks like I'll be regretting that one for the next 7 or 8 years.
Energy 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.
President 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.
I'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.
Despite 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.
This 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.
The 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.
I believe that scenario totally depends upon OPEC's ability to keep prices artificially high by limiting production of its vast supplies of oil.
I remember a few short years ago when fracking was dominating the news about oil supply all the talk from the Middle East producers were about just that...limiting production in order to "break the backs" of all the American wildcat frackers,
I guess with a President in office who seems to want prices to go through the roof, its much easier for them to do just that.
How would limiting OPEC production hurt the US Oil Fracking industry? If anything, that would cause an increase in oil prices, making US Fracking more profitable and viable...
Probably 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.
