Why Natural Gas May Never Go Extinct
Fossil Fuels: The Popular Paradigm
The harsh reality that our environment is degrading cannot elude any savvy person these days. Clean and green energies are becoming the talk of the era, but that does not mean we forget the importance of fossil fuels and the crucial role that they have been playing in our society and economy.
Fossil fuels are biological compounds made up of hydrocarbon, which can be inflamed and used as a source of energy. These materials are found deep in the earth’s crust. As such, we have to drill into the earth’s surface in order to extract them.
Many countries around the world are proactively taking measures to reduce their dependence on fossil fuels, but the reality is that the demand for energy is still rising globally. The 2019 Global Energy and CO? Status Report made some interesting revelations about the rising demand for global energy:
- In 2018, global energy consumption rose at nearly twice the average rate of growth since 2010. The growth is primarily driven by a strong global economy and increasing heating and cooling needs in various parts of the world.
- Demand for all fuels jumped considerably, led by natural gas, even as solar and wind energy saw double-digit growth.
- Higher demand for electricity contributed to over half of the growth in energy needs.
- Energy efficiency saw slow improvement. Hence, higher energy consumption, CO2 emissions increased by 1.7 percent last year and touched a new high.
From the above numbers, it’s undeniable that the general anxiety and fear that the world’s natural resources, primarily fossil fuels, will go extinct is somewhat logical. We probably utilized fossil fuels far back in the Iron Age, but it wasn’t until the Industrial Revolution that wide-scale extraction began. The practice of extracting fossil fuels wholly transformed the way humans lived and worked; humanity was then able to power up homes, businesses, and machines with the help of energy derived from coal, oil, and gas.
In the last 200 years, the consumption of fossil fuels has increased tremendously, thereby depleting fossil fuel reserves and triggering various consequences of climate change. Fossil fuel reserves are becoming harder to locate, and also such resources won’t last eternally. As the demand for energy is increasing around the globe, the pressure on these resources will undoubtedly increase in the future. But is that happening anytime soon (as per popular culture)? Perhaps no.
The Concern Over the Extinction of Natural Gas
There is absolutely no doubt that natural gas provides all the apparent benefits everyone knows about; it facilitates mobility to get to school, work, and vacation, fulfills home heating and cooling needs, offers electricity to homes and offices, and powers up almost every aspect of the economy.
Natural gas also provides the resources for making fertilizers, medicines, synthetic fabrics, plastics, electronic components, and many other household items. Water treatment and delivery systems, as well as public sanitation and safety, depend extensively on natural gas. In simple terms, pretty much everything we consume or apply on our bodies wouldn’t have existed without natural gas. No other existing energy source is as reliable as natural gas in performing the essential economic functions at an affordable price.
However, there was also strong and vehement resistance towards the use of this fossil fuel. “Keep it in the Ground” illuminates the culture of apprehension that exists when it comes to using natural gas. It is a global protest movement against the development and adoption of fossil fuel. The movement is aided by several environmental activist organizations around the world that aggressively campaign opposing governments and corporates that develop oil, natural gas, and coal. The trademark of the movement is civil disobedience, as activists and protestors intentionally disrupt to draw attention to the cause.
In the United States, the Keep it in the Ground movement started protesting the leasing of oil and natural gas on multiple-use public lands under the administration of the Bureau of Land Management (BLM). Activists participating in the protest demanded the Obama Administration bypass Congress to prohibit the leasing of oil and natural gas just the way the Administration had done with the coal sector.
For the next 18 months after making the demand to the administration, activists picketed and disrupted lease sales. This resulted in local law enforcement being called for intervention. To curb any possible danger to agency employees, the BLM implemented an online auction technology and did away from the practice of holding the lease sales in-person. The BLM protests have ended as a result, but the Keep it in the Ground movement has expanded to prevent other activities related to oil and natural gas production, particularly pipeline construction.
Will Natural Gas Run Out?
With so many activists raising their voices against natural gas, it’s common for a few questions to pop up:
- Will natural gas really vanish from the face of the earth?
- If yes, then when?
The danger revolving around fossil-fuel supplies has less to do with depleting resources and more to do with how much we can recover at an affordable cost. Believe it or not, humanity can find some solace in the fact that our fossil fuels probably won’t run out so soon, at least not in the sense that these resources will be exhausted.
At our current rate of usage, the world has oil and natural gas reserves to suffice for at least 60-90 years. Although the total volume of oil and natural gas isn’t increasing, we cannot deny that our ability to locate and extract natural gas from new sources is expanding almost every single day.
The world now produces natural gas from coal seams and deposits that are located miles beneath the surface of the earth. Not to forget, extraction processes are already in place in the deep ocean, hundreds of miles from the shore and in water deeper than 10,000 feet.
In the next six decades or so, all the oil companies are expected to drill and pump away oil and natural gas. As a matter of fact, thousands of oil wells producing in the world today will still be going. But oil companies may become smaller and will be extracting almost exclusive and unconventional oil, for example, tar sands and oil shale. Extraction of such mineral demands more sophisticated equipment, more technology, and costs more. Nonetheless, it is a perfectly viable option in the near future.
The critical point here is that oil and natural gas are essential commodities with very limited alternatives. The market price of oil will continue increasing high enough to bring more expensive oil and natural gas production on line. The relationship is simple: the lesser the amount of oil left, the more money will be sucked out of every drop.
Natural Gas is Promoting Renewable Energy
For around nearly a decade, the conventional knowledge of the energy sector has been that natural gas is on the way up. Coal is considered dirty, and it’s proving expensive to use. However, some believe it’s time to hop on to renewable energy. To get fossil fuel in the present and carry it forward to the renewable future, humanity needs a bridge.
Natural gas is believed to be that bridge, a medium-to-lower hazardous emissions relative to coal while working on scaling up renewable sources of energy. In fact, the transition from coal to natural gas is a big part of why emissions in the United States have reduced considerably in the past few years.
As a bridging component between fossil fuels and renewables, natural gas seems to have a sustainable and comfortable future. Firstly, it will most likely replace coal and nuclear “baseload” plants. This will lead to the growth of renewables to supply the remaining power since it provides flexibility. So natural gas can fill in the gaps where variable renewables like wind and solar energy fall short. By playing these multiple roles, natural gas will most likely outlive coal and establish itself well into the later part of the 21st century, meaning it will enjoy a slow exit.
Around 2015, just five years into natural gas’ rise to power, certain complications for this theory began to emerge. First, wind and solar costs plummeted so fast that they are now slashing the price of new natural gas in an increasing number of regions. Also, batteries, which can support variable renewables, are reducing the need for flexibility of natural gas and started getting cheap faster than expected. The change happened so quickly that certain limited circumstances showed solar+storage or wind+storage to be cheaper than new natural gas plants for all the same roles they play.
The cost of natural gas power is linked to the commodity price of natural gas, which is always volatile. On the other hand, the price of storable renewable energy is tied only to technology costs, which are reducing considerably.
Recent forecasts indicate that by 2035, it may be cheaper to construct new renewables+storage than to continue operating existing natural gas plants. This means that natural gas plants built today could become uncompetitive, “stranded assets” before their expected lifespan, pushing ratepayers and investors towards premature decommissioning.
The new natural gas power plants are made in two types. Combined-cycle gas turbines (CCGT) run two successive cycles. The first cycle is burning natural gas into a jet engine, and then tapping the waste heat to power a secondary steam generator. This is considered less expensive, more efficient, and runs more often. Open-cycle gas turbines (OCGT) are considered less efficient and produce extensive power but have a good speed. Since they help during peaks in power demand, they are called “peakers.”
Beating CCGT is primarily a matter of reducing costs by using wind or solar energy once they get cheap enough. Beating peakers requires being flexible, fast, and controllable. For that, storage becomes a crucial element.
In many cases, the “Levelized Cost of Energy” (LCOE) from some renewable sources is already lower than that of a lot of fossil fuels, even without taking into account subsidies and environmental benefits. Wind energy is the cheapest energy of all renewables, and utility-scale solar is competitive with natural gas.
Meanwhile, storage is now moving within gas peakers. Also, it’s worth noting that compared to peakers, batteries are faster to build. They can also offer a range of other services to the grid, like voltage support and frequency regulation. This makes them faster and more precise compared to natural gas plants, as they can help reduce grid congestion and avoid new infrastructure expenses.
Has the US Benefited from Natural Gas?
The Keep It in the Ground is justifiable to some extent, but those who wish to stop all oil and natural gas production are somewhat failing to face the reality. If they got their way into America, the country would just have to import natural gas from outside, sending more than $350 billion overseas. What’s perhaps more damaging is their desire to deny that nearly one billion people across the globe who lack access to electricity as enjoyed in the developed world.
This is the reason why Western Energy Alliance is associated with the American energy success story. The country thus represents the exploration & production (E&P) or “upstream” wing of the sector that discovers, develops, and produces oil and natural gas across so many western states.
For more than a decade, the US has witnessed a “Shale Revolution” due to innovation, and western producers have played their role. They have helped make the country the dominant power in the global energy market. Also, western states are reaping tremendous benefits that boost the climate, aid allied nations, and uplift local communities.
The United States has been able to show the world a way to reduce greenhouse gas (GHG) emissions, thanks to natural gas. The country has made remarkable progress without depending on heavy-handed federal policies like a carbon tax, cap-and-trade, or the Paris climate accord. In the United States, carbon dioxide emissions fell roughly by 1.7 percent in 2019, thanks to a sharp decline in coal-fired electricity.
While the reduction of carbon emission is impressive, the United States also benefits from leveraging the most technologically sophisticated and environmentally sustainable production methods. Local regulators and companies work collaboratively to reduce emissions of harmful greenhouse gases and air emissions from the oil and natural gas industry even as the production of natural gas has jumped over the last decade.
With the help of advanced drilling and extraction technologies, the United States became the leading producer of oil and natural gas. The country has not only reduced its dependence on foreign sources of energy but has also reduced the dependence of its allies on unfriendly sources. The country is already a net exporter of natural gas, and its petroleum exports continue to achieve great milestones.
Perks to Communities
The creation of employment and the subsequent growth in the economy is one of the biggest contributions made by the western E&P industry. In just 13 states, the industry supports millions of jobs and generates whopping sums towards annual economic impact. It supports rural communities across the West with substantial tax revenues. This fund is channelized towards schools, highways, safety, and other vital public services and enables additional economic activity across different industries such as agriculture, travel and tourism, and manufacturing.
Natural Gas Reserves
Natural gas amounted to 23 percent of total energy demand but rose at a rate of 4.6 percent in 2018. It had the second-highest share of total electricity generation at 23 percent, or 6,091 TWh.
So the questions that most people ask are: how much natural gas reserve does the United States has, and how long will it last?
As of January 1, 2018, about 7,124 trillion cubic feet (Tcf) of total world reserves of gross natural gas was estimated. However, the U.S. Energy Information Administration projects in the Annual Energy Outlook 2019 that there were about 2,459 trillion cubic feet (Tcf) of technically recoverable resources (TRR) of dry natural gas in the US as of January 1, 2017.
Considering the current rate of natural gas production and known reserves, the US natural gas reserves can last for about 52.8 years. The country will still have fossils like natural gas and coal remaining by the time oil reserves become exhausted in 2052. However, if we level up gas production to compensate for the scarcity of oil, then those reserves will only give an additional eight years, thereby extending the usability to 2060.
Nevertheless, countries should realize that burning gas negatively impacts the environment because of carbon dioxide emission. They will have to use highly sophisticated machines for both vertical and horizontal drilling and extraction of natural gas and have years of results backing their abilities to perform this task. If there is judicious consumption of resources across the globe and nations join hands for the larger cause of environmental sustainability through policy-making, then they are less likely to face a crunch of natural gas.