180 on Natural Gas

Is there any business that is as big a political football as the energy business? And is there any part of the energy business that is subject to such wild swings of emotional hysteria as that part of the energy business associated with natural gas? I suspect that the nuclear business might be, but natural gas is close behind. Like the Wilson sisters of Heart, they are the wild sisters of the energy business.

It was well within my working lifetime, the late 1970's, that our political establishment passed laws that forbade natural gas to be burned to generate electrical power. We were sure that we were running out of natural gas and we just knew we shouldn't waste it to generate electrical power. We had plenty of coal back then. And the climate threat that we were all worked up about was nuclear winter. Sober scientific opinion envisioned glaciers over most of the United States.

Now the political establishment, as well as Oprah and Al, is worked up about global warming. In 30 years our future has changed from freezing to death to drowning when all the glaciers melt. Instead of forbidding the use of natural gas to generate electrical power, it is now being mandated.

Is this just political theater, or should we be concerned? Everybody has an opinion, but facts seem to be in short supply. The facts haven't changed in the past 30 years, but their interpretation has completely changed.

It may be political theater, but it has real consequences. Assuming $ 30/ton PRB coal delivered, it delivers a kilowatt of electricity for just under 2 cents. Assuming $ 7/MMBTU natural gas, it delivers a kilowatt of electricity for 5 1/2 cents. This is only the energy cost of a kilowatt, but it goes up over 125%.

Given today's focus on reducing CO2 emissions, the two wild sisters, natural gas and nuclear, are the only game in town for truly significant energy generation. While solar and wind are the current darlings of the energy business, a 1,000 megawatts of either take up a lot of real estate with very unattractive mechanical structures. Also you don't pull a 1,00 megawatts of energy out of an ecosystem without altering its micro-climate. How can that not become a worrisome problem in the future.