Cheap Natural Gas Is Making It Very Hard to Go Green

©. Spencer Platt/Getty Images

It's killing everything, including renewable energy.

We recently noted that the US is drowning in cheap natural gas, and that "Gasmaggedon" will make it even harder to electrify everything. Now we learn from Bloomberg Green that solar and wind power can't compete with gas that's this cheap. Naureen Malik and Brian Eckhouse write:

Gas is such a bargain that it’s being viewed less as a bridge fossil fuel, driving the world away from dirtier coal toward a clean-energy future, and more as a hurdle that could slow the trip down. Some forecasters are predicting prices will stay low for years, making it tough for states, cities and utilities to achieve their goals of being zero-carbon in power production by 2050 or earlier.
The authors note that there is an upside to this, that gas is replacing coal for power generation, which is the main reason that CO2 emissions have flatlined in the USA. But having gas this cheap makes it difficult for everyone else, and it's getting "locked in."
Just look at the largest grid in the U.S., which stretches from Washington to Chicago and serves more than 65 million people: It has been boosting the amount of power generated with gas and drawing in renewables at a slower rate. That grid happens to crisscross a section of the U.S. that’s home to some of the world’s most abundant natural gas reserves.
It’s also squeezing margins for nuclear reactors, which are the U.S.’s biggest source of carbon-free power. And it’s driving utilities to lay down infrastructure that could ensure gas remains central to the power mix

Cheap gas means there is little incentive to invest in batteries or other storage technologies needed to go totally renewable, especially when the gas companies keep calling it a "bridge fuel" that's cleaner than coal; the bridge just keeps getting longer and longer until the other end is out of sight.

Cheap natural gas will kill recycling and the so-called "circular economy."

CC BY 2.0. Simon Fraser University / Flickr

Simon Fraser University / Flickr/CC BY 2.0

The price of gas (and the fear of electric cars) is driving a pivot to petrochemicals, with plans for a vast increase in capacity. From Louisiana to Alberta, chemical plants are being built to convert oil and gas byproducts to plastics (see Oil industry is spending billions on increasing plastics production).

According to Jared Paben in Plastics Recycling Update, virgin plastics are now cheaper than recycled plastic, and there is too much of the stuff. Tison Keel of IHS Markit complains that "the supply-demand imbalance is expected to get worse with additional production capacity coming on-line. “What we have coming in the next couple of years is a large overbuild.”

Keel said manufacturers are acting irrationally and he suggested they should shut down production capacity to bring supply and demand into better balance; however, none has announced plans to do so....The overall supply-demand picture will mean persistently low virgin PET prices in coming years, Keel said. That’s a challenge facing PET reclaimers.

Keel wonders if the bottling companies will stick to their pledges to use more recycled content.

Will the consumers of RPET, who are putting out some pretty ambitious goals of recycled content in their containers, will they be willing to pay these higher prices? I’m not saying they won’t. Historically, in North America, they have not.

Currently, there is little incentive to increase recycling rates, because there's no real value to RPET when virgin PET is so cheap and recycling so expensive and difficult. As Judith Thornton noted,

The sheer variety of polymers, compositions and colours of plastics means that mechanical sorting at recycling plants will never be effective, and therefore we have a choice between exporting it to countries where labour is cheap enough for hand sorting to be viable, incinerating plastic more locally, or in the long term fundamentally redesigning waste collection systems.

And as Tison Keel noted, this makes it hard to keep those promises about using recycled plastic.

“How are we going to meet the demand being laid out there by brand owners when the collection rates are so low, and how do we get those up?” he asked. “I don’t have an answer for that.”

So, in summary,

Cheap natural gas is killing renewable energy. Cheap natural gas is killing recycling. Cheap natural gas is making it hard to electrify everything. Cheap natural gas will kill the hydrogen economy And to top it all off, so much of the stuff is leaking that it's not even much greener than coal.

As I noted, it's getting really is hard to see the other end of this bridge.