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Natural Gas is Good For US Economy

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Natural Gas Economy in US

US natural gas production has been steadily rising from about 54 billion cubic feet per day in January 2007 to about 68 billion cfd in July 2012; about 27 billion from shale, and the rest from tight gas, and other sources. Natural gas replacing coal has been the primary reason US CO2 emissions have declined during that period; renewables and economic contraction/efficiency contributed, but were not the primary reason.

Natural gas is good for the US economy because it:

  • is domestic (energy security),
  • is abundant (many decades of supply),
  • emits no health-damaging particulates, unlike coal,
  • has CO2 emissions that are about 50-60% less/kWh than of coal (reduces GW),
  • is low-cost, about 3.50-4.00 dollars/million Btu, which promotes economic growth and job creation.

NOTE: GW started in the late 1700s as the world started to come out of the Little Ice Age. By about 1850 the negative temperature anomaly became zero and since that time it has become positive. Since 1900, CO2 + deforestation + industrial agriculture + urbanization + population explosion (1 billion in 1800, 7.2 in 2012) + increased world gross product and its attendant air pollution are all influencing this natural temperature rise.

The abundance and low cost of NG will give the US a many-decade, major, competitive advantage versus Europe and Japan which have NG prices about 3-4 times US prices. It would be short-sighted foolishness for the US government to allow excessive exports of NG to these competitors for short-term financial gain by a few US energy companies.


The export of NG could cause US prices and household energy bills to increase and would hamstring the resurgence of US manufacturing.

Sen. Ron Wyden, D-Ore., who heads the Energy and Natural Resources Committee, suggested the government should be more skeptical as it weighs future export proposals. “With each new export permit, the DOE has a higher bar to prove these exports are in the best interests of American consumers and employers,” Wyden said.

US industrial companies using NG will be able to more-effectively compete with European and Japanese companies, which will increase exports, decrease imports, reduce trade deficits, and revitalize many other US industries, and create millions of well-paying jobs.


The Energy Information Administration, EIA, part of the US Department of Energy, collects data regarding NG market trends. Based on those data, it projects NG production to continue to increase and projects prices, $/million Btu, to increase at slightly more than the rate of inflation under the most likely scenario of a low-growth US economy, over the next few decades.


It is well known, the particulates emitted and widely dispersed by coal plants are harmful to public health and the health of forests (acid rain).


– US deaths from coal energy are about 15/yr/TWh, NG energy 4, wind energy 0.15, nuclear energy 0.04/yr/TWh.

– A 1,000 MW coal plant will emit over its 40-year life more radioactivity to the atmosphere than a 1,000 MW nuclear plant.


An additional benefit of NG is that the output of NG-fired CCGTs can be more-rapidly ramped up and down than of coal and nuclear plants, which is of major benefit for integrating into the grid the increasingly greater quantities of variable wind and solar energy.


This integrating is not cost-free. The below OECD study quantified the levelized costs of the grid level effects of variable energy, such as wind and solar, on the grid. It includes the costs of wind energy balancing, PLUS the costs of grid connection, reinforcement and extension, PLUS the costs back-up (adequacy), i.e., keeping almost all EXISTING generators fueled, staffed, in good working order to provide energy when wind energy is minimal, about 30% of the hours of the year in New England, about 10-15% of the hours of the year west of Chicago.


In the US, the cost of the 3 PLUSSES for onshore IWTs is about $16.30/MWh at 10% annual wind energy on the grid, about 19.84/MWh at 30%. This is significantly greater than the about $5/MWh usually mentioned by IWT proponents. See page 8 of this URL. Corresponding costs for offshore wind turbine plants would be significantly greater.


These costs are a significant part of the US annual average grid price of about 5 c/kWh. Mostly, they are “socialized”, i.e., charged to energy users via rate schedules, not charged to wind turbine owners. As a result, wind turbine owners, with help of other subsidies, such as the 2.3 c/kWh production tax credit, can underbid other low-cost producers, causing them to become less viable over time.

If NG is used in 60%-efficient CCGTs, it will produce energy at about 5-6 c/kWh. That is a significantly better than, for example, Vermont’s wastefully-expensive SPEED RE program and the Lowell Mountain environmentally-destructive, ridge line wind turbines which produce energy at about 15-20 c/kWh. This compares with New England grid prices of about 5 c/kWh, at which Green Mountain Power, a Canada-owned utility in Vermont, buys some of its energy.

Here are the latest SPEED program numbers:

2010, last six months: 13.87 c/kWh
2011: 16.44
2012: 17.16
2013, first eight months: 19.30

NOTE: RE costs are steadily increasing, while NE annual average grid prices have been about 5 c/kWh since 2008!!! RE promoters claimed RE costs would be decreasing!! Have they just been making it up to befuddle lay people, thinking no one would notice?

For the 2010 – 2017 period, a cumulative $131,220,058 excess above grid prices will have been rolled into electric rates of already-struggling households and businesses.

Here are the latest Lowell Mountain numbers:

In its zeal for RE, GMP, purposely disregarding the advice of its own power system engineers, and disregarding the 5-yr nearby Maine ridge line CFs of about 0.25, and disregarding the New York State multi-year average CFs of about 0.235, claimed in documents filed with the PSB:

GMP CF claim: Standard rotor (90 m dia) = 63 x 8760 x 0.2842 = 156,844 MWh/yr

GMP and DPS SPEED websites claim = 63 x 8760 x 0.331 = 182,909 MWh/yr

GMP CF claim: Large rotor (117 m dia) = 63 x 8760 x 0.3587 = 197,959 MWh/yr

NOTE: In the REAL world, these GMP claims turned out not worth the paper they were written on, but the Vermont Public Service Board, in GW-fighting mode, found no fault with them. Protecting the interests of the public? Sure.

Lowell’s CF for the first 6 months of 2013 was 0.189, with similar fiasco numbers to follow for years. This means the COST of wind energy is not a tolerable 10 c/kWh, per GMP Lowell spreadsheets, but closer to a hardship 15-20 c/kWh.

There is no way Vermont’s already-struggling households and business can prosper with energy that is 3-4 times grid prices. Increased energy efficiency is a far better approach than dysfunctional RE, because it is the low-hanging fruit, has not scratched the surface, provides the quickest and biggest “bang for the buck”, and:

  • it is invisible
  • it does not make noise
  • it does not destroy pristine ridge lines/upset mountain water runoffs
  • it would reduce CO2, NOx, SOx and particulates more effectively than renewables
  • it would not require expensive, highly-visible build-outs of transmission systems
  • it would slow electric rate increases
  • it would slow fuel cost increases
  • it would not lower property values
  • it would not harm people’s health
  • it would slow depletion of fuel resources
  • it would create 3 times the jobs and reduce 3-5 times the Btus and CO2 per invested dollar than renewables
  • all the technologies are fully developed
  • it would end the subsidizing of renewables tax-shelters benefitting mostly for the top 1% at the expense of the other 99%
  • it would be more democratic/equitable
  • it would do all this without public resistance and controversy.

Vermont already has the 4th highest electricity costs, right after Alaska, Hawaii, and Connecticut, per EIA, largely due to inanely-conceived RE programs benefitting well-connected, multi-millionaires (crony-capitalism) and hurting all others.

Whereas the above illustrates what has happened in Vermont, other states have similar, ineffective RE programs, that can only exist because of fiscally-unsustainable subsidies.

The US needs to pursue LOW-COST and clean ways of generating energy, i.e., gas to replace coal. By far the lowest-cost way to make use of that energy is by increased energy efficiency in all areas, such as higher-mileage light vehicles (cars, minivans, SUVs and 1/4-ton pick-ups), and “net-zero-energy” or “energy surplus” residential and other buildings.

Energy Collective

10 Comments on "Natural Gas is Good For US Economy"

  1. DC on Wed, 25th Sep 2013 10:29 pm 


    I get it now, the reason that Vermont place as ‘high’ electricity rates is well….you guessed it-renewables!

    And the best way to not have the 4th highest rate in the US of Coal according to EC?

    Why, dont use wind or solar to generate power of course-duh! You see, if you just drive a marginally more efficient trash-can, or buy a more ‘efficient’ TV or whatever it is that you feel is sucking too much power, then presto! Just sit back and watch the cash roll in.

    Not mentioned of course, all those more ‘efficient’ devices you ran out to buy will naturally be powered by coal, or NG, or even a nuke or two. Because all those power sources are ‘cheap’ and ‘reliable’. But so long as your being more efficient(marginally) and NOT using wind or solar, then everything will be just peachy in Vermont.


    I would like to see an entire article BY EC devoted to how a marginally more ‘efficient’ SUV or 1/4 ton anything is more cost effective than what we have now. The entire cars-only transportation system from mine-factory to roads to police and legal support-is massively subsidized, and running at a loss currently(was it ever profitable?). What effect would increasing the MPG of a SUV from say, 8 to 12mpg, have on the rest of system costs? And EC seems to conflate savings from mythical ‘net-zero’ buildings with the MPG of gas-powered trash-cans. Saving energy on a building is not transferable to cars under our cars-first and only transport system.

  2. bobinget on Wed, 25th Sep 2013 11:42 pm 

    Pinto announced a Gas to liquids plants to produce 2800 barrels of liquids* a day from Utica and Marcellus gas . * diesel
    Shell announced a deal with the state of LA to investigate a proposed Gas to Liquids plant . The company plans to spend 12 BILLION dollars on the plant . 740 permanent jobs would be created with an average salary of $100,000 . Primary product here will be distillates. (heating oil, jet fuel, diesel)

    Transportation is slowly switching to gas .
    Power plants are running hard away from coal and switching to gas .
    LNG transport facilities are be approved by the Government .
    Gas to liquids plants are on the way .
    Gas dependent factories are being built as we speak, to take advantage of the plentiful gas supply .
    The golden age of Natural Gas is starting to take shape

  3. BillT on Thu, 26th Sep 2013 3:02 am 

    And when the ‘switch’ is almost ready to go … the gas bubble will burst and take down the rest of the economy … wait and see.

  4. Mike999 on Thu, 26th Sep 2013 4:08 am 

    Oh, I can play too.

    Cancer is Good For Your Health.

  5. Mike999 on Thu, 26th Sep 2013 4:10 am 

    SOLAR is what Utilities are switching to. They’ve found that Solar and Wind can be easily managed, and produce vast profit for the minor maintenance costs.

    Secondly, there’s no catastrophic risk, like a natural gas plant or Nuclear.

  6. GregT on Thu, 26th Sep 2013 5:56 am 

    “The US needs to pursue LOW-COST and clean ways of generating energy, i.e., gas to replace coal. By far the lowest-cost way to make use of that energy is by increased energy efficiency in all areas, such as higher-mileage light vehicles (cars, minivans, SUVs and 1/4-ton pick-ups), and “net-zero-energy” or “energy surplus” residential and other buildings.”


  7. Norm on Thu, 26th Sep 2013 6:45 am 

    With enough global warming, I wont have to heat my house anymore. Then my utility bill will be cheaper.

    This is why I am in favor of global warming. Vote republican, support global warming.

  8. BillT on Thu, 26th Sep 2013 2:56 pm 

    Screw the ‘economy’. Growth is over. Long live contraction!

    Radical? Not if you want a future for your kids and theirs.

  9. Stilgar on Thu, 26th Sep 2013 9:53 pm 

    “SOLAR is what Utilities are switching to.”

    I thought it was solar that was causing everyone else’s utility rates to rise. That’s why our family is saving for a solar system that is off the grid. Our rates this past summer were horrendous. Got to bust a move!

  10. GregT on Fri, 27th Sep 2013 4:21 am 


    Welcome to the new reality, of diminishing returns.

    If you are hoping to be ‘off the grid’ for any length of time, look into Edison Battery ‘technology’. We still don’t have anything better, than the tech from 1901.

    Thanks to, I believe it was DC, that taught me about this. Expensive, but well worth the long term investment.

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