When I reported on the electric utility industry 25 or 30 years ago for the Rochester (NY) Democrat and Chronicle, natural gas was regarded as a premium fuel—an ideal fuel in that it burned cleanly, without emitting pollutants, but costing much more than any of the alternatives.
Nuclear power was the cheapest fuel, followed by coal and then oil. But nuclear power plants were the most expensive to build, followed by coal-fired plants, then by oil-fired plants with natural gas plants the cheapest to build. So the logic was that you would want nuclear power for your base-load generation—the power you would want turned on all the time, year in and year out. And you would want natural gas for your peaking power, the power you would turn on to meet peak demands, such as for air conditioning on the hottest day of summer and electric heat on the coldest day of winter.
I’m now reading energy expert Daniel Yergin’s new book, The Quest: Energy, Security and the Remaking of the Modern World, and Yergin says all that is out of date. Natural gas is now cheap and abundant and, in his view, the fuel of the future for the electric power industry and much else.
Yergin wrote:
Natural gas is the fuel of the future. World consumption has tripled over the last thirty years, and demand could grow another 50 percent over the next two decades. Its share of the total energy market is also growing. World consumption on an energy-equivalent basis was only 45 percent that of oil; today it is about 70 percent.
The reasons are clear: It is a relatively low-carbon resource. It is also a flexible fuel that could play a larger role in electric power, both for its own features and as an effective—and indeed necessary—complement to greater reliance on renewable generation. And technology is making it more and more available, whether in terms of advances in conventional drilling, the ability to move it over long-distance pipelines, the expansion of LNG onto much larger scale, or, most recently, the revolution in unconventional natural gas.
Back when I was reporting on the industry, natural gas was transmitted in pipelines. That’s why the Reagan administration objected to Russia’s Gasprom exporting natural gas to Western Europe; officials feared the Soviet government would be in a position to cut off supplies.

Click to enlarge.
There was an emerging trade back then in liquified natural gas, or LNG, but this was in its infancy. LNG involves cooling natural gas down to minus 260 degrees Fahrenheit, at which it turns into a liquid with 1/600th the volume of the gas. Yergin described how availability of LNG has created a world market in natural gas, led by Qatar, which shares access with Iran to the world’s richest natural gas field, right in the middle of the Persian Gulf. Other LNG exporters include Oman, Abu Dhabi, Algeria, Libya, Egypt, Nigeria, Equatorial Guinea, Malaysia, Indonesia, Brunei, Australia, Russian Sakhalin, Alaska, Trinidad and Peru.
The necessity to keep LNG at such incredibly low temperatures makes it seem like an unforgiving and dangerous technology. Yergin didn’t address safety issues, but the Wikipedia article on LNG indicated a good safety record to date.
What Yergin calls “unconventional” natural gas is extraction of natural gas tightly locked into strata of shale by means of a technology known as hydraulic fracturing—a technology which, some of us here in upstate New York believe, creates a danger of water pollution, minor and not-so-minor earthquakes and destruction of the rural countryside. Yergin did not deal with these objections. I imagine he would say that this is no worse than coal mining, oil drilling or any other type of fossil fuel extraction.
Coal is the most undesirable source of energy. The mining of deep coal is one of the most dangerous occupations. Coal miners have a high death rate in mining accidents and black lung disease. Surface mining is destructive to the environment. Coal is the worst source of pollution. Coal emissions cause respiratory disease and acid rain. And coal is a major contributor to global warming.
Yet coal is what the United States may have to fall back on if all else fails. Yergin pointed out that the United States has a quarter of the world’s known reserves of coal, about the same as Saudi Arabia’s known reserves of oil. The United States together with China, another coal-rich nation, are working on technologies to burn coal cleanly. One such technology is carbon capture, which would remove carbon from the smoke as it goes up the stack, and make it useful, or easily disposable.
I always thought of nuclear energy as a dangerous technology that is possible to operate safely. The Chernobyl disaster showed the cost to human life when a nuclear power plant was operated without proper precautions. Yet the excellent safety record of the U.S. and French nuclear power industries convinced me that, with proper safeguards, these dangers could be averted. And, as Yergin noted, the increasing efficiency of nuclear power plants has been the equivalent of a whole new source of energy in itself. I agreed with President Obama’s plan to bring about a rebirth of nuclear energy in the United States.
The Fukushima catastrophe in Japan called my assumptions into question. The catchphrase, “Nobody could have predicted…”, is a common excuse for negligence and failure. But I do not think the Japanese were negligent. As far as I know, they did everything a reasonable person could have done to ensure safety and reliability. Nobody could have predicted an undersea earthquake would create a tsunami that would inundate the plant and destroy all its backup systems.
So this leaves natural gas. I still think it would be best to put off hydraulic fracturing for natural gas as long as possible, in hope that more benign technologies will appear. If not, the gas is not going to go away. It will be more valuable in the future than it is now. If there is no choice but to go ahead, New York and other states should enact a severance tax, similar to what Texas, Alaska and other states have for oil. If we are going to put the countryside at risk, we should be getting something back in return.
Click on Daniel Yergin | Official Website for Yergin’s home page.
Click on Daniel Yergin Examines America’s ‘Quest’ for Energy for a link to a National Public Radio interview with Daniel Yergin on hydraulic fracturing for natural gas. [Added 3/24/12]
Click on Hydrofracking and carbon caps for an earlier post of mine.
Click on Liquified natural gas wiki for a Wikipedia article on LNG.
Click on Qatar Economy | Economy Watch for more about Qatar’s natural gas industry and the source of the map below, which shows world exports and imports of LNG and pipeline nature gas.
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