X

Sign Up To Our Free Newsletter

Join Now

Thanks for subscribing to our free newsletter!

ERROR

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

  • 3 minutes Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Scientists Warn That Filling The Sahara With Solar Panels Is A Bad Idea
  • 11 minutes United States LNG Exports Reach Third Place
  • 15 minutes Joe Biden's Presidency
  • 16 hours America Makes Plans to Produce Needed Rare Earth Minerals Domestically
  • 3 hours IS SAUDI ARABIA SENDING A MESSAGE TO BIDEN
  • 16 hours U.S. Presidential Elections Status - Electoral Votes
  • 2 days Texas forced to have rolling black outs, primarily because of large declines in output from fossil fuel power plants
  • 2 days Former BP Exec "Biden not in war against oil" . . Really ?
  • 3 days Texas Supply Chain Massacre
  • 2 days Here we go - again: plug-in hybrids cost motorists more than what they were told
  • 13 hours Top Conservative Lawyer Says Trump Can Stand Trial
  • 13 hours “Cushing Oil Inventories Are Soaring Again” By Tsvetana Paraskova
  • 2 days An exciting development in EV Aviation: Volocopter
The Real Reason Why Iraq Paused Its Major Oil Deal With China

The Real Reason Why Iraq Paused Its Major Oil Deal With China

Iraq’s recent announcement of its…

3 Ways To Play The Next Commodity Supercycle

3 Ways To Play The Next Commodity Supercycle

After a lackluster decade for…

Wall Streets Sees 2,000% Growth For Booming EV Market

Wall Streets Sees 2,000% Growth For Booming EV Market

While ESG investments are gaining…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Natural Gas Is Fighting For Survival

Natural gas has been hailed as the bridge fuel between the fossil fuel economy of the past and present, and the renewables economy of the future. With renewable energy costs falling steadily and considerably, some are beginning to worry that gas is facing increasingly fierce competition amid fast-growing supply.

A recent couple of reports from a nonprofit organization promoting renewable energy suggested solar and wind, plus storage, could become cheaper than most gas-fired power plants in the United States in just 16 years.

“We find that the natural gas bridge is likely already behind us,” one of the reports said, “and that continued investment in announced gas projects risks creating tens of billions of dollars in stranded costs by the mid-2030s, when new gas plants and pipelines will rapidly become uneconomic as clean energy costs continue to fall.”

This would certainly be impressive. Solar and wind costs have indeed been falling steadily but storage is not normally included in these falling costs. Whether or not the forecast is overly optimistic remains to be seen but it does seem that renewables are gaining on gas as fuel for power plants: probably the biggest arena where fossil fuels are fighting renewables. Related: The World’s Biggest EV Market Braces For Another Crippling Blow

The second problem for natural gas is methane emissions. The main component of natural gas is a much more potent greenhouse gas than the notorious carbon dioxide and it has been garnering increasing attention from regulators and investors alike. Oil and gas investors have had a lot to worry about recently with the crusade against fossil fuels winning stronger support among governments. Investors now need assurances that the industry is strong enough to survive the double offensive from renewables and regulations.

One way to give them these assurances is by lowering costs to match the cost decline in renewables. The gas industry, at least in the U.S., has already proved it can do it, albeit unwillingly. Several times this year benchmark spot prices for natural gas in the country fell below zero because of oversupply. Renewables have a long way to go to fall into negative territory without even trying.

But such price swings aside, the gas industry both in the U.S. and elsewhere is actively looking for ways to make their product more competitive. After all, competition within the industry is intensifying, too, as global gas demand rises and companies and governments rush to respond to this rising demand. Related: Canadian Oil Prices Crash After Keystone Spill

So, one way of gaining an advantage over competitors is by lowering costs and improving production efficiency, as Nick Butler, the chair of The Policy Institute at King’s College London wrote in a recent column for The Financial Times.

Another way is by becoming renewable. Methane collected from waste and manure - a renewable sort of natural gas - is a popular source of energy in Europe, but in the United States, it has yet to establish itself as a viable alternative to fossil fuel gas. Thanks to tax incentives and improving technologies, however, companies are making increasingly wider inroads into this segment of the renewable energy industry. This would go a long way towards solving the methane emissions problem and it would certainly improve natural gas’s reputation. As for when renewables will take over, based on projections about a continued strong rise in global gas demand, chances are it will be a while.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News