Could it be that T. Boone Pickens was right. I mean not HIS natural gas as he presented it but the whole world’s natural gas…?
Gas could be the answer in global warming fight
An unlikely source of energy has emerged to meet international demands that the United States do more to fight global warming: It’s cleaner than coal, cheaper than oil and a 90-year supply is under our feet.
It’s natural gas, the same fossil fuel that was in such short supply a decade ago that it was deemed unreliable. It’s now being uncovered at such a rapid pace that its price is near a seven-year low. Long used to heat half the nation’s homes, it’s becoming the fuel of choice when building new power plants. Someday, it may win wider acceptance as a replacement for gasoline in our cars and trucks.
Natural gas’ abundance and low price come as governments around the world debate how to curtail carbon dioxide and other pollution that contribute to global warming. The likely outcome is a tax on companies that spew excessive greenhouse gases. Utilities and other companies see natural gas as a way to lower emissions — and their costs. Yet politicians aren’t stumping for it.
In June, President Barack Obama lumped natural gas with oil and coal as energy sources the nation must move away from. He touts alternative sources — solar, wind and biofuels derived from corn and other plants. In Congress, the energy debate has focused on finding cleaner coal and saving thousands of mining jobs from West Virginia to Wyoming.
Utilities in the U.S. aren’t waiting for Washington to jump on the gas bandwagon. Looming climate legislation has altered the calculus that they use to determine the cheapest way to deliver power. Coal may still be cheaper, but natural gas emits half as much carbon when burned to generate the same amount electricity.
Today, about 27 percent of the nation’s carbon dioxide emissions come from coal-fired power plants, which generate 44 percent of the electricity used in the U.S. Just under 25 percent of power comes from burning natural gas, more than double its share a decade ago but still with room to grow.
But the fuel has to be plentiful and its price stable — and that has not always been the case with natural gas. In the 1990s, factories that wanted to burn gas instead of coal had to install equipment that did both because the gas supply was uncertain and wild price swings were common. In some states, because of feared shortages, homebuilders were told new gas hookups were banned.
It’s a different story today. Energy experts believe that the huge volume of supply now will ease price swings and supply worries.
Gas now trades on futures markets for about $5.50 per 1,000 cubic feet. While that’s up from a recent low of $2.41 in September as the recession reduced demand and storage caverns filled to overflowing, it’s less than half what it was in the summer of 2008 when oil prices surged close to $150 a barrel.
Oil and gas prices trends have since diverged, due to the recession and the growing realization of just how much gas has been discovered in the last three years. That’s thanks to the introduction of horizontal drilling technology that has unlocked stunning amounts of gas in what were before off-limits shale formations. Estimates of total gas reserves have jumped 58 percent from 2004 to 2008, giving the U.S. a 90-year supply at the current usage rate of about 23 trillion cubic feet of year.
The only question is whether enough gas can be delivered at affordable enough prices for these trends to accelerate.
The world’s largest oil company, Exxon Mobil Corp., gave its answer last Monday when it announced a $30 billion deal to acquire XTO Energy Inc. The move will make it the country’s No. 1 producer of natural gas.
Exxon expects to be able to dramatically boost natural gas sales to electric utilities. In fact, CEO Rex Tillerson says that’s why the deal is such a smart investment.
Tillerson says he sees demand for natural gas growing 50 percent by 2030, much of it for electricity generation and running factories. Decisions being made by executives at power companies lend credence to that forecast.
Consider Progress Energy Inc., which scrapped a $2 billion plan this month to add scrubbers needed to reduce sulfur emmissions at 4 older coal-fired power plants in North Carolina. Instead, it will phase out those plants and redirect a portion of those funds toward cleaner burning gas-fired plants
For the REAL RAW raws try this sight:
Or will it?
by Abrahm Lustgarten, ProPublica
Tomorrow a House Energy and Natural Resources subcommittee will hold its first hearing of 2009 on controversial issues related to the burgeoning natural gas drilling industry, which ProPublica has been covering for the last year. The committee is expected to grill a handful of state regulators and industry representatives about the environmental risks of drilling for shale gas and about the use of hydraulic fracturing, a process where water and chemicals are pumped underground at high pressure.
That fracturing process was exempted from federal environmental oversight in 2005 and now – amidst emerging evidence that it is damaging water resources across the country – Congress is preparing legislation that would reverse the exemptions and require the industry to identify the toxic chemicals it pumps underground. Last week ProPublica wrote in detail about that political effort.
Before the subcommittee on Energy and Mineral Resources could convene its quorum, the American Petroleum Institute gathered reporters for a conference call to explain why it is prepared to fight such legislation to the grave. Natural gas is the key to the country’s energy independence, representatives of the trade and lobbying group said, adding unequivocally that hydraulic fracturing is the critical process required to get those resources.
The Institute says state regulations are sufficient to keep water supplies safe, and that returning authority to the Environmental Protection Agency – which the bill being written by Colorado Rep. Diana DeGette would do – amounts to a cumbersome additional layer of regulation. The API repeatedly referenced a recent study claiming that federal oversight of the drilling process would cost the industry more than $100,000 per new well and threatened that thousands of jobs will be lost if tougher regulation is passed. It maintains that fracturing has been used reliably for over 50 years, and that is a safe technology proven not to harm water.
Asked what recent scientific studies support that notion, however, the Institute’s senior policy analyst, Richard Ranger, answered: “That’s a good question. I’m not aware of any.”
Abrahm Lustgarten is a reporter for ProPublica, America’s largest investigative newsroom.
Follow ProPublica on Twitter: www.twitter.com/propublica
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