Mar 29

Poland Pledges Maximum Use Of Shale Gas

By Curve natural gas No Comments »

Poland will do its utmost to extract natural gas from its shale reserves, Prime Minister Donald Tusk said Tuesday.

“We are determined to turn the prospecting for and use of shale gas from plan into fact,” Tusk told a conference in Warsaw.

“As prime minister, I pledge personally to create the optimal conditions for prospection, scientific research and the economic framework for the use of shale gas,” he said.

“If possible, we should exploit every single cubic metre of this gas,” he added.

Poland is thought to have substantial reserves of gas trapped in shale, sedimentary rock containing hydrocarbons.

Though generally more expensive to extract than conventional natural gas, it is seen as a way to cut dependence on imports.

Poland already covers 30 percent of its gas needs from domestic natural gas sources, while over 40 percent is imported from Russia and the remainder from other countries.

Tusk said that Warsaw’s plan to exploit shale-gas was a plank of the “energy-security strategy of the whole of Europe, including Poland.”

He underlined, however, that a future shale-gas industry in Poland would have to be environmentally friendly.

Last year, Poland agreed to join a US research programme which is focused on tapping into unconventional gas resources.

Warsaw has also issued prospecting licences to international gas groups including Italy’s ENI, and reportedly to US giants ExxonMobil, ConocoPhillips and Chevron and British-Dutch group Shell.

Read the full article here.

Tagged with: • • • • • • •
Mar 28

Forbes’ Kenneth Fisher Identifies Natural Gas as Best Place to Look for Growth

By Curve natural gas No Comments »

While numerous questions remain about the fallout–both literal and figurative–of the nuclear reactor leaks in Japan, one thing seems certain: The tragic events are increasing anti-nuclear-power sentiment across the globe.

Given the renewed fears about the use and expansion of nuclear power, it’s quite possible that we’ll see many countries turn away from nuclear endeavors, increasing demand for other energy sources. And, with alternative fuels like wind and solar power still trying to build infrastructure and become more cost-effective, it’s likely that fossil fuels would be the recipient of much of the increased demand.

That’s what Forbes’ own Kenneth Fisher is saying. In a recent interview with Advisor One, Fisher says that “society will be hostile toward nuclear and utilities for a good long time. Everyone will be forced back to fossil fuels.” Green power, he says, is “dead in the water” and will only be a viable option if the government provides huge subsidies. To him, the best place to look for growth: natural gas. “The breakthroughs in [energy] technology all relate to natural gas.” he says.

Even before the Japan crisis, Fisher was writing about some of those breakthroughs. In a mid-2010 column for Forbes, he said that improvements in “fracking”–the process of injecting fluid at very high pressure into an oil, water or natural gas well to make tiny fissures in underground rock, which lets the gas or oil or water escape–would reshape our energy landscape. “While fracking is a decades-old process, it has made great technological strides in the past few years,” he wrote. “It will make and keep natural gas cheap for a long, long time. Gas that now costs $5 per thousand cubic feet at the wellhead could come down in price to $2. The consequence will be a large-scale displacement of competing energy sources by gas.”

Natural gas also offers a cleaner alternative to other fossil fuels–and we have plenty of it in the U.S., Fisher wrote. “There’s no denying that burning natural gas (methane, that is) produces less carbon dioxide per unit of energy than burning coal,” he said. “The consequence is that electric power production is going to migrate from coal to gas.”

Read the full article here

Tagged with: • • • • • • • •
Mar 14

Nuclear Renaissance Melts Down Over Japan Disaster; Natural Gas Looked to for Future

By Curve natural gas No Comments »

After more than two decades of stagnation, the global nuclear power industry was just coming back to life. Power utilities had launched proposals for more than 300 new reactors, most of them in Asia, and dozens were under construction.

Then came the Japanese nuclear disaster, shocking the world with images of two explosions at the Fukushima Daiichi nuclear plant in northeast Japan, near the epicentre of Friday’s earthquake. The disaster threatens to end the nuclear renaissance. A slowdown has already begun.

On Monday, two days after thousands of nuclear protesters gathered in Stuttgart, German Chancellor Angela Merkel announced a suspension of her coalition government’s decision to extend the lifespan of her country’s aging nuclear power stations. Investors hammered the shares of utilities with nuclear-energy exposure, among them French nuclear development giant Areva, and energy consultants and analysts predicted hard times ahead for the industry.

“The severe nuclear incident in Japan has put a global nuclear renaissance into question,” Bernstein International analyst Alex Barnett said in a research note.

“This should slow the development of nuclear power,” said Ira Helfand, a member of the board of Physicians for Social Responsibility in the United States. “These reactors are inherently dangerous. They contain the equivalent of 1,000 nuclear bombs.”

The Japanese disaster “will put new nuclear development on ice,” said Toronto energy consultant Tom Adams, the former executive director of Energy Probe. He said the nuclear industry was already facing challenges, noting that vast shale gas resources in North America and other parts of the world were starting to make cheaper gas-fired plants the electricity generators of choice.

The 8.9 magnitude Japanese earthquake was many thousands of times more powerful than the one that hit Christchurch, New Zealand, last month. It severely damaged the Fukushima reactor complex, operated by Tokyo Electric Power Co. (Tepco). The site’s three operating reactors shut down as planned when their motion detectors sensed the shock, but the cooling systems designed to remove heat from the core failed.

In Austria, Environment Minister Nikolaus Berlakovich urged “stress tests” on the European Union’s power plants. In Germany, Ms. Merkel announced a three-month suspension of plans to extend the lives of her country’s 17 nuclear reactors while her government fast-tracks a review of nuclear safety and policy. France, the biggest user of nuclear power, urged calm along with Britain, arguing that nuclear safety standards have increased and that most of Europe is not geologically prone to earthquakes.

Decades after the Three Mile Island accident and the Chernobyl disaster, memories of the incidents had faded and nuclear power was making a comeback. The revival was driven by soaring fossil-fuel prices and the scientific acceptance that carbon dioxide output, a notable byproduct of coal-fired plants, was accelerating the pace of global warming. Countries that had slowed or ended nuclear development, including Sweden and Finland, reversed course. In the United States, 16 new plants are in the proposal stage, according to the World Nuclear Association, though only two are under construction.

The nuclear revival seemed assured, as billions of dollars of investments in design, engineering and construction were committed. In an interview in Moscow in February, Russian billionaire industrialist Oleg Deripaska said he saw a bright future for nuclear development “because only nuclear could provide a real solution” to global warming.

But nuclear energy and emerging alternative sources of energy carry high costs, critics point out.

“Neither new nuclear, coal with carbon capture and sequestration, wind nor solar are economic,” said John Rowe, CEO of Exelon, in a speech on March 8 in Washington. One of the biggest U.S. power companies, with 17 nuclear plants and a broad portfolio of hydro, wind and solar facilities, Exelon says gas plants are the future.

“Natural gas is queen. It is domestically abundant and is the bridge to the future,” Mr. Rowe said. He noted that new conventional and shale gas discoveries have increased U.S. gas supplies by about 60 per cent, making the United States the world’s third largest gas producer, after the Middle East and Russia.

Shale gas could alter the European energy mix, too. Shale gas has been found in Poland, Germany, Ukraine and a few other countries. Exxon Mobil, ConocoPhillips and Chevron are working on shale exploration projects in southeast Poland.

Source: Globe and Mail

Tagged with: • • • • • • •
Feb 24

Natural Gas, Key For Europe’s Greenhouse Gas Emission Target For 2050

By Curve natural gas No Comments »

Natural gas should play a key role in reaching Europe’s 2050 climate targets in the most cost-efficient manner, according to a report published today by the European Gas Advocacy Forum (EGAF).

Statoil participates in the EGAF together with a number of other key gas players. The EGAF report addresses how Europe can reach the target of at least 80% reduction in its carbon dioxide emissions in 2050.

“Europe is facing a huge challenge as the energy demand is growing while carbon emissions need to be reduced,” says Rune Bjørnson, senior vice president for Natural gas in Statoil.

“The EGAF report presents a roadmap where one of the main measures is replacing coal with natural gas in the power sector in the next decades. This will cater for immediate and major emission cuts, and is a realistic and cost-efficient way of reducing climate emissions in Europe.”

Natural gas is cost competitive, CO2-emission are up to 70% lower than those of coal, it is based on known technology and provides a robust and predictable power supply.

Source: offshoreenergytoday.com

Tagged with: • • • •
Feb 17

Driven by U.S. Investments, Shale Natural Gas Grows Into an International Energy Market Heavyweight

By Curve natural gas, shale gas No Comments »

Shale gas, natural gas produced from shale formations, has the potential to dramatically impact global energy markets, according to “Global Shale Gas Technologies and Markets” by leading industrial research firm SBI Energy.

“Declining production from depleting conventional gas resources in many parts of the world, combined with rising global demand for energy and natural gas has caused dramatic increases in the price of crude oil and natural gas over the better part of the decade. This has both driven demand for shale gas and improved the economic viability of shale gas developments,” says Shannon Shuflat, SBI Energy analyst and co-author of “Global Shale Gas Technologies and Markets” alongside Akash Shah.

According to Shuflat and the report, the response to these factors has been an astounding twelve-fold increase in the recorded global production of shale gas from 2000 to 2010. SBI Energy estimates that global shale gas production grew at a compound annual average rate (CAGR) of nearly 50% per year from 1,002 billion cubic feet in 2006 to 5,042 billion cubic feet in 2010.

Presently, the success of shale gas production in North America, and particularly in the United States, has triggered the exploration of shale gas resources around the world. Shale gas exploration is occurring in China, India, Poland, Germany, Spain, France, the United Kingdom, the Netherlands, Australia, Austria, Sweden, Switzerland, Italy, Hungary, Romania, Ukraine, and Argentina, among other nations seeking to lower-carbon fuels while also ensuring energy security and economic development. An earlier start and aggressive action to date indicate China, Poland, and India will likely emerge as the first producers of shale gas outside of North America.

“The confluence of growing natural gas demand and breakthrough technological advancements has made investments in shale plays attractive in recent years. Advancements in horizontal drilling and hydraulic fracturing technologies have enabled the achievement of high rates of gas production from deep, low permeability shale formations. These breakthroughs have facilitated access to some of the largest undeveloped gas resources in the world,” says Shah.

Despite the severe global economic recession over the past two years, growth in shale gas production volume has continued unabated. However, the wellhead production value of global shale gas has not kept pace with production volume growth because natural gas prices have declined steeply since the recession hit in the latter half of 2008. Lower realized wellhead prices notwithstanding, the global value of shale gas production grew by nearly 35% per year from $6.4 billion in 2006 to over $21 billion in 2010. The global value of shale gas production is expected to grow by 12% annually to ultimately exceed $37 billion in 2015 and further by 9% annually to more than $56 billion in 2020.

Tagged with: • • • • • • •
Feb 08

Big Oil Bangs The Drum for Natural Gas Search

By Curve natural gas No Comments »

Oil prices may have stormed back into the headlines by crossing the ominous $100 a barrel threshold in recent weeks. But while this has happening the world’s largest oil and gas companies have been banging the drum for an altogether less newsworthy fuel–natural gas.

ExxonMobil, Royal Dutch Shell and now BG Group have been arguing that significant changes are afoot in the unglamorous world of natural gas that could have a big impact on patterns of energy consumption, carbon dioxide emissions and the balance of power in volatile energy markets.

The big driver of this shift is supply. Energy companies have done a remarkable job in recent years of finding vast quantities of natural gas, possibly adding more than a hundred years of supply of the fuel.

A boom in production of natural gas trapped in shale rock has already transformed the fortunes of the U.S. Just a few years ago, North America was grimly looking at the prospect of growing dependence on foreign gas. Now it’s sitting on so much of the stuff that people are seriously discussing export projects.

In other parts of the world, notably Australia and southeast Africa, new projects are starting and new discoveries being made that will be feeding growing Asian markets by the middle of this decade.

There is disagreement over the impact this will have. The International Energy Agency, which represents the interests of major energy consumers, says there will be a global gas glut lasting until 2020, leading to low prices for much of the decade.

But (not surprisingly) Shell, ExxonMobil and BG Group, all big producers of natural gas, disagree. Rather than swamping the market, they say the extra supply will stimulate greater use of gas either because it is cheaper, more secure or less carbon intensive than other energy sources.

Shell is the biggest promoter of the green credentials of natural gas.

“The quickest and cheapest way to cut CO2 emissions from the global power sector is to grow the presence of natural gas,” said Shell’s exploration chief Malcolm Brinded in a speech late last year. This is because natural gas produces less than half the emissions of coal for the electricity generated.

Brinded added: “Natural gas capacity is also considerably faster and cheaper to install than other new build sources of electricity.”

Shell has argued that the European Union could save half a trillion Euros while still meeting its ambitious target to cut CO2 emissions by 80% by 2050, if only it switched from promoting renewables and nuclear and instead focused on swapping coal for gas.

The sudden abundance of natural gas has also caused a substantial shift in its reputation as a reliable fuel source. Just a few years ago, many governments perceived natural gas as the weapon Russia would use to take over the world. The boom in gas production in a stable, friendly country like the U.S., and the hope it could be repeated elsewhere, has lessened those fears.

In its 2030 energy forecast last month, ExxonMobil predicted a shift toward natural gas by businesses and governments precisely because it is so reliable and affordable.

BG Group, in its long-term strategy update Tuesday, was particularly bullish, predicting gas demand will grow 3% a year between now and 2020.

“The increase in demand by 2020 will be equivalent to more or less the entire current North American gas market,” said BG Chief Executive Frank Chapman. Once you take into account the need to offset the natural decline in production from existing resources, more than two North America’s worth of new gas supply will be needed to meet this demand, he said.

A big part of this growth in natural gas demand could come at the expense of oil, Chapman said. As emerging economies develop, they will stop using expensive, dirty oil to fuel their homes and businesses and substitute it for cheaper natural gas. BG Group estimates that between 2010 and 2020, natural gas consumption could expand by up to 260 billion cubic meters a year at the expense of oil.

A switch of this magnitude could shave 4.4 million barrels a day off projected oil demand growth over the next ten years. To put this into perspective, BP recently estimated that total global liquids demand–oil, biofuels, natural gas liquids–will grow by 16.5 million barrels over the next 20 years. So a shift of this magnitude would surely affect the price of oil.

Unsurprisingly, Chapman saw all this as an opportunity rather than a problem. He reckons $2 trillion of new investment will be needed over the next nine years to meet these forecasts. Who wouldn’t want a piece of that action?

Source: Wall Street Journal

Tagged with: • • • • • • • • • •
Dec 14

Environment-Friendly Natural Gas Fuel Of Choice

By Curve Environment, gas, natural gas No Comments »

Environment-friendly natural gas will take the spotlight as the world grapples with the ill-effects of greenhouse gases, which threaten to sharply increase the earth’s temperature.

Energy experts in one voice highlight the pro-environment qualities of natural gas, which helps mitigate the effect of greenhouse gases.

Among all the fossil fuels, natural gas – as well as being the cleanest and most controllable at the point of use – is also the most environmentally-friendly, producing the lowest carbon dioxide (CO2) emissions per unit of energy.

Depending on the quality of fuel, the combustion of natural gas results in at least 25% -30% less CO2 than oil and at least 40%-50% less than coal, according to the International Gas Union (IGU).

The CO2 emissions can be further reduced by using natural gas in high efficiency applications such as in gas turbine based electricity generation. Natural gas, thus, offers unique advantages in terms of greenhouse gas benefits.

The replacement of the coal, which emits higher levels of carbon dioxide, with natural gas will help mitigate greenhouse gas emissions, experts say.

The gas business is also the pioneering industry in the area of CO2-capture and –storage (CCS) that is expected to be an important technology for mitigating climate change.

The twin energy carriers- electricity and hydrogen – both CO2-free at the point of end-use – can be produced from natural gas with CCS ensuring low emissions.

The IGU said about 41% of current global energy-related CO2 originates in electricity generation.

Electricity’s role is expected to increase steadily also in future as more and more countries are industrialised.

It is a widely published fact that some 1.6bn people – about one in four of the world’s population – live without access to electricity.

Unlike electricity, it is not known with any degree of precision how many people globally lack access to clean burning natural gas.

An indication is that in 2006, the European Union with 200mn households had 105mn customers connected to the gas grid, giving coverage of about half the population.

In the US, natural gas is used in 61% of the 160mn households.

In Japan, about 27mn households (out of a total of 52mn) have access to natural gas.

These three regions with about 14% of global population are known to have the world’s most developed and dense gas-grids.

Few other countries and regions are anywhere near this gas-grid coverage at the present time.

The use of natural gas as a fuel for vehicles, the IGU said, is increasing rapidly around the world. It is projected that this end-use sector will increase ten-fold, to 65mn vehicles by 2020.

The degree to which natural gas has succeeded in gaining a favourable public and policy attention regarding climate change mitigation varies from country to country and from region to region, the IGU says.

Where natural gas and coal compete in a growing market, the opinion will often be in favour of natural gas. Elsewhere, attention is turned more in the direction of energy efficiency measures or various forms of renewable energy to the detriment of all fossil fuels, including natural gas.

The nuclear industry is also experiencing a renaissance due to the threat of climate change.

Source: Gulf Times

Tagged with: •
Dec 08

Major Oil Companies Increasingly Future On Natural Gas With Old Oil Fields Producing

By Curve natural gas, Oil Fields No Comments »

The major oil companies are increasingly betting their futures on natural gas, with older oil fields producing less crude and newer ones either hard to reach or controlled by unfriendly nations.

They are focusing more than ever on natural gas because it burns cleaner than oil and is gaining traction as a fuel for transportation. The latest move came Tuesday, when Chevron made a $4.3 billion deal to buy up natural gas fields in the Northeast.

Earlier this year, Exxon Mobil bought XTO Energy to become America’s largest producer of natural gas. And Royal Dutch Shell expects natural gas to make up half its total global production in two years.

“If you look at most of the big developments now, they’re not about oil, it’s gas,” said Oppenheimer & Co. analyst Fadel Gheit.

The world will continue to run on crude oil for years to come, but even with new discoveries, oil production is expected to flatten out during the next few decades, according to the latest estimates from the International Energy Association.

Far down the road, Gheit believes, Exxon and Shell will lead the energy industry into a new era where oil companies devote most of their efforts to producing natural gas. The Energy Information Administration expects worldwide natural gas production to increase 46 percent from 2007 to 2035, compared with a 30 percent increase in world production of crude and natural gas liquids.

Gas is becoming more attractive to the oil companies because it’s more accessible. While OPEC controls most of the world’s oil reserves, it controls less than half of the natural gas reserves.

In the United States and Europe, natural gas is primarily used to heat homes. About three in five American homes use it for heat. And more and more power plants are using it to generate power. Natural gas is used to generate 23 percent of electricity in the U.S., up from 16 percent a decade ago.

If the country focuses more on reducing greenhouse gas emissions in years to come, the trend should accelerate. Natural gas emits less carbon dioxide than other fossil fuels.

Natural gas is used in small amounts for transportation in the U.S., mostly for city buses and garbage trucks. The oil industry is pressing Congress to add financial incentives for trucking and freight companies to convert their fleets.

Until recently, Big Oil watched the rise of U.S. natural gas from the sidelines, and smaller companies drilled into underground layers of shale. New techniques allowed companies to drill parallel to the ground and hit previously tough-to-reach deposits, helping them tap ever larger bounties of shale gas.

Production costs fell. Drilling rigs started popping up along America’s shale-rich regions in Appalachia, Texas and North Dakota. Experts now say the U.S. is sitting on enough natural gas to last the country for the next century.

This year, Big Oil jumped in. Exxon bought XTO for more than $30 billion, immediately making it America’s largest natural gas producer. XTO so far has helped Exxon increase its natural gas production by 50 percent.

Then Shell agreed to buy East Resources Inc. for $4.7 billion, and China’s state-owned offshore oil and gas company, CNOOC Ltd., invested $2.16 billion in oil and gas fields owned by Chesapeake Energy.

Production jumped to 1.94 trillion cubic feet in August, the highest monthly total since January 1973, according to available government data.

“Production is screaming,” said E. Russell Braziel, managing director of BENTEK Energy, which tracks natural gas prices in the U.S.

The U.S. now holds about 3.82 trillion cubic feet of natural gas in storage, about 10 percent more than the average over the past five years. And the industry keeps pumping more out of the ground.

There are challenges. The same low prices that make the assets affordable have caused some companies, namely ConocoPhillips, to pull back on production. Natural gas has dropped about 24 percent this year.

And people near shale rigs complained that groundwater supplies were contaminated by the industrial chemicals used in the drilling process. The Environmental Protection Agency is studying the possible effects on drinking water and the public health.

Still, most of the big companies continue to press ahead with multibillion-dollar acquisitions.

“When the market is weak, that’s when it’s time to act,” Argus Research analyst Phil Weiss said.

Source: Mining Exploration News

Tagged with: •
Dec 06

Fiat & Chrysler Ditch Hybrid Cars In Favor Of Natural Gas

By Curve hybrid cars, natural gas No Comments »

In the search for the next green car many automakers have pinned their hopes on hybrid technology. The combination of a gasoline engine and battery pack system has had the attention of car buyers with hybrids like Toyota’s Prius to Chevy’s new Volt. Fiat, however, is betting on natural gas to help them grab a part of the green car market in the US.

Fiat’s beef with hybrid cars is all about money. Instead of sinking a lot of cash into developing new technology like batteries, why not use their knowledge of cars powered by natural gas to crack the US market? After all, the US is the world’s largest producer of natural gas, the fuel is pretty cheap to produce, and it is cleaner than regular gasoline.

The Italian automaker has a long history of using liquefied natural gas (LNG) or compressed natural gas (CNG) to power their cars. Fiat has locked up 80% of the consumer based market in Europe by promoting the technology through flex-fuel type cars that operate via natural gas as well as gasoline.

While Fiat has hinted about adding natural gas engines to Chrysler’s current lineup, it seems that their latest move may be targeting the commercial market. 55% Of natural gas based light commercial vehicles in Europe are Fiats, a number that includes everyday transport vehicles like delivery vans or postal trucks. Instead of relying on the 1,300 natural gas stations in the US, these fleets could be managed through a single fueling point at a regional hub or central office.

LNG or CNG engines aren’t as dirt cheap as their gasoline cousins but they are still cheaper than the average hybrid motor. There’s only a $3,000 difference between the cost of a gasoline based car when compared to one powered by natural gas. Fiat estimates that the additional cost for a hybrid car is about $8,000.

Fiat and Chrysler don’t have solid plans yet to bring natural gas cars and trucks to the US, but they will soon join the natural gas vehicles association in Washington D.C. The duo may only be in the planning stages but they’ve hit on an important change in consumers; MPG is the new MPH. Corporations and everyday consumers are more concerned with the intrinsic value of their car rather than how fast it travels. Until there’s a strong infrastructure for EV’s, car buyers and fleet managers will be looking for affordable options rather than dealing with high gas prices.

Source: Tainted Green

Dec 05

Natural Gas: Cheap and Chic In Climate Talks

By Curve natural gas No Comments »

As countries gather in Cancun, Mexico to figure out a coherent plan to reduce greenhouse gas emissions, you can bet that natural gas will get plenty of attention. That’s because natural gas production has boomed – to the point of oversupply by some estimates — and it’s less polluting than coal, the devil in the climate change fight.

The U.S. could see 21 percent of its electricity in 2011 coming from power plants running on natural gas, and that stake will likely grow to 40 percent by 2035, according to a study released Monday by the engineering and construction firm Black & Veatch in Kansas. At 40 percent, natural gas will become the dominant source of electricity for the country. At the same time, renewable electricity such as wind and solar could account for 4 percent in 2011 and 11 percent in 2035. Hydroelectricity will add another 7 percent to the pie in 2011 and 6 percent by 2035.

The projection is much more bullish about natural gas’s role in the country’s electricity supply than the U.S. Energy Information Administration’s outlook, which was published in May this year and is set for an update later this month. The EIA said natural gas accounted for 21 percent of the sources in 2008 and, depending on the pace of renewable energy generation, policies and pricing, it could still account for 21 percent in 2035. The EIA sees renewable electricity taking up 17 percent of the supply in 2035 (including hydro).

Natural gas has won fans in recent years as the U.S. struggles to figure out its short- and long-term energy policies, particularly in the context of reducing greenhouse gas emissions. Successes by natural gas producers to extract the fossil fuel from shale formations in North America have positioned natural gas as a reliable, long-term source of energy. That makes it appealing to lawmakers who like to use “energy independence” as a rallying cry for their causes, even though the term really should refer only to oil, which has no direct impact on electricity generation.

So much natural gas has been flowing through distribution pipelines that T. Boone Pickens, a natural gas evangelist and investor, told Bloomberg last month that he was in no hurry to invest in natural gas because no good profit can be made from it.

“Natural gas is oversupplied and you’re looking at a $4 to $4.50 natural gas next year. 2011, you have to shut down some of these rigs because they are not making money. You’ll have to have $6 gas to make money off of a lot of the wells being drilled,” Pickens said.

The glowing profile of natural gas is sometimes seen as a threat to renewable electricity development. The rational is that utilities will favor investing in natural gas-fed power plants to help them meet goals to reduce carbon emissions and do so at the expense of investing in renewable energy. Coal-fired power plants generate twice as much emissions as the natural gas variety, an MIT report said.

Black & Veatch’s Mark Griffith doesn’t believe natural gas will have that big of an impact on renewable electricity development. He pointed out that utilities are building solar and wind farms – or signing contracts to buy those sources of electricity from power producers – because they have to comply with state mandates. Over half of the states in the country have policies (renewable portfolio standards) that require their utilities to buy and sell certain amount of renewable electricity.

However, natural gas prices do have an impact on prices for renewable electricity. California, for example, has used the wholesale prices for natural gas-based electricity to calculate some of the incentives for solar energy. “If you are talking about (renewable portfolio standards), then natural gas price is a factor, but it’s not a driving factory of how many megawatts will get built,” said Griffith, a managing director at Black & Veatch. But lower natural gas pricing could lower the amount of profits made by renewable energy developers, he added.

Source: Gigaom

Previous Entries Next Entries
preload preload preload