The Grand Game has many twists and turns, some are quite fascinating. One key aspect of the Grand Game (supplying the world's energy requirements), is the role played by natural gas. Natural gas does not exist alone, but interacts with other fuels and technologies that are part of the Grand Game.
Recently, as I have written (but so have many others), natural gas has become more abundant than ever, and therefore lower in price. Some politicians are even saying that burning natural gas to produce electric power releases half the CO2 into the atmosphere compared to burning coal. Well, that is just not true. The number is closer to one-third, and in some cases is closer to one-fourth. Any chemical engineer can tell the politicians this. The reasons this is true have to do with the chemical composition of methane (one Carbon atom with four hydrogen atoms attached) versus coal (three Carbon atoms with, on average, two hydrogen atoms attached). Another reason this is true is that a combined cycle gas turbine power plant converts more of the fuel to power than does a coal power plant (57 percent compared to approximately 35 percent). Politicians should really talk to chemical engineers someday, and stop saying embarrassingly wrong things.
Some critics of renewable energy, in particular wind energy, whine and moan that wind power is not reliable, and we must build natural gas fired power plants as full backup for when the wind dies down. That is only partly true, and is disappearing as an issue as large-scale power storage becomes more economic. Yet, and this is to the topic of this article, windmills that generate power decrease the need to burn natural gas, thus decreasing the demand for natural gas, and therefore reducing the price of natural gas. Since natural gas is the preferred fuel for peaking power plants, and many electric power price rate structures have as a key component the highest cost of power (peaking power), the lower the peaking power price, the lower the average power price to the consumer. Wind power is growing very rapidly in the U.S., particularly in Texas and a few other states in the windy Great Plains area.
As always, some ill-informed pundits who blindly back outrageously expensive and toxic nuclear power dream up phantom conspiracies where none exist, such conspiracies involving supplying natural gas world-wide from places where vast deposits exist, via LNG plants and LNG tanker ships, then re-gasification plants at the destination. Some even wonder, in print, how LNG plants can be justified with their billion dollar price tags, if there is no secure market for their product. Ignorance shows in these comments, as LNG supply contracts have, until recently, been locked in for 20 years or longer. A 20 year contract is a very secure market. A spot market for LNG has recently developed. Low prices are a good way to ensure a market exists, which is why a spot market is nothing but good for the world.
None of this is mysterious, nor do conspiracies exist to explain this part of the Grand Game. Oil men have known for many decades where natural gas fields lie, mostly because they found them while drilling for oil. The gas fields were not developed unless a market was fairly close by due to the expense of shipping natural gas across great distances on land via pipeline, or across oceans. At one point in the 1970's the best thinking was to chemically convert natural gas to methanol, which is liquid at normal temperature and pressure, which then could be shipped by tanker across the oceans, reconverted to natural gas at the destination, then injected into existing natural gas pipelines. (as a personal note, that was the senior design project my graduating class was assigned in chemical engineering undergraduate study in 1977). At that time, LNG plants were known but were very expensive. The methanol process was hoped to provide a way to bring the stranded natural gas to market. LNG plants won the day, as history has shown.
LNG plants became economic due to economies of scale, that is, the larger the plant, the lower the operating costs per unit of product. Exxon was one of the first to discover how to make an LNG plant that was much bigger, and built just such a plant in Qatar. Their large-scale design was such a success that Exxon duplicated that design over and over in the same facility. Furthermore, Exxon developed a large-scale LNG tanker ship, again reducing unit costs by economies of scale. No one any longer considers converting natural gas to methanol for large scale transport around the world. There is no need. Exxon and others, through their ongoing efforts by engineers, have brought the previously stranded natural gas to the world's doorstep.
Now that windmills for power are being built by the hundreds around the world, natural gas prices will be lower and lower, as long as the wind blows. That seems like a safe bet.
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