As you’re sitting there in your dark house, wondering if the reading on the thermostat inside will fall as fast as the freezing rain outside, the energy issue most on your mind at the moment is not the future of America’s portfolio of generating, transportation fuel and heating resources.
Your focus is much more on the short-term future, as in, “Are the lights and furnace ever coming back on?”
Nor are you likely to have much appreciation for the fact that the natural gas you can’t burn because you have no electricity (if your house is set up that way) is priced at levels much lower than recent years and, to hear some experts tell it, likely to stay there.
But there’s nothing to focus the mind on how wonderful the conveniences of modern industrialized civilization are quite like being deprived of them for hours, or days. So as we thaw out and enjoy some warm meals, it is worth pondering what fuels we’re going to rely on to maintain that comfortable lifestyle, and what we’re going to be paying for them.
One of the leading energy stories of the moment is what’s been happening with natural gas. The development of shale gas reserves has not only driven down prices but reversed plans for natural gas shipments. Proposals for import terminals of liquefied natural gas (including some highly controversial projects in Oregon) have been rewritten as LNG export facilities. So awash in gas will we be, the theory goes, that we’ll have enough to affordably supply our own demand and make money selling the surplus to other countries.
It’s a lovely warming thought (although not as warming as having an actual lit furnace), but there’s a chillier alternate scenario out there.
The U.S. Energy Information Administration recently issued a report cautioning that increased exports of natural gas could lead to higher domestic prices. How much and how fast depends on the pace of export growth, but the report notes that there’s likely to be a spillover effect on electricity prices, since natural gas is becoming increasingly important as a fuel for running power generators.
The broad issue of energy imports and exports has been fraught with contention for years – think of the debates over Alaskan oil – and it’s becoming even more so now – think of the fights in this state over proposed coal terminals at Bellingham and Longview.
The idea of exporting U.S. natural gas has escaped the same furor for the moment, but don’t expect that to continue. A huge question is whether the U.S. will really get all the gas it’s counting on to supply both domestic and export markets. It’s not that the gas isn’t there, or that it’s not recoverable. But the environmental battles over fracking, water resources, pipeline construction and the like threaten to tie up development of many reserves for years, leaving that gas where it is.
Natural gas is also being asked to do a lot more. It will be called upon to replace coal-fired power generating capacity that is retired (such as TransAlta in Centralia) and to reinforce the grid when wind turbines aren’t turning. It’s also among the options under consideration as a transportation fuel (it’s already in use for some fleets). And natural gas remains an important industrial fuel and feedstock, whose consumption will grow as the economy rebounds.
Between higher demand and supplies that don’t grow fast enough to keep up, what gets squeezed? Prices, and the consumers and businesses paying them. Natural gas holds great promise, but there is risk in forcing it to promise what it might not deliver.
Then again, the public’s fuming about those prices might also be a promising, if difficult to harness, renewable source of energy.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.