Cheap Natural Gas Reshaping Power Generation and Home Heating: Coal Will Take The Loss

USEIA/Public Domain

The latest US Energy Information Agency (EIA) report demonstrates natural gas prices continue to stay below historic levels. As shown in chart form (above), the remarkably low natural gas prices of early 2012 were bolstered by balmy winter weather and increased production. As to the climate factor, USEIA reports that "Population-weighted heating degree days since November 1, 2011 are down 12% nationally from the 30-year average." Fracking, of course, is a big part of what accounts for the increased gas production. More on that below.

As long as this trend holds, utilities will see natural gas as the fuel of choice for electricity production. Coal is falling out of favor not only because of mountain top removal controls and public protest, coming mercury emission restrictions, coming PM2.5 particulate emission restrictions, and fly ash management issues. Price rules, even before these added costs come into the picture.

Life cycle inventory, with emissions control and total fuel efficiency.
Matt's recent post indicated that, using current fracking technology, Natural Gas From Fracking Emissions Can Double Those From Coal. While that claim, which is based on a single life cycle assessment study, may be true from the limited viewpoint of today's fuel production and delivery methods, I doubt it will accommodate the incorporation of Best Management Practices (BMP's) that will eventually be a requirement for every drilling rig that gets an EPA air permit - after the coming election!

More important, I doubt that claim takes into account the fact that the total fuel efficiency of a coal-fired boiler will be far less than that of the equivalent gas fired boiler (equivalent with respect to combined cycle technology).

Heating.
Unfortunately, the cheap natural gas does nothing to help the poor folk who heat their homes with oil. They're stuck with oil furnaces that seldom exceed 84% efficiency. In contrast, homes heated with a modern gas furnace can reliably maintain efficiencies in the high-nineties.

People who rely on heat pumps - these are powered almost exclusively by electricity - also benefit from the low gas prices, without which utility bills might go up still farther.

Big picture.
Do these circumstances tell you anything about why fracking will remain popular? Why it won't be an election issue? Check out the "Related" posts at upper left of your screen if you want explanation.

If you are an environmental activist, you'll get much more for your time and treasure if those are focused on BMP development for fracking. Asking for a fracking ban is unrealistic and self defeating.

Tags: Carbon Emissions | Coal | Natural Gas