"America's Most Underrated Energy Reality: Low and Lower Cost Natural Gas"

 Source:

https://www.realclearenergy.org/articles/2021/03/19/americas_most_underrated_energy_reality_low_and_lower_cost_natural_gas_768331.html

"There may be no bigger ignored energy reality than that of low-cost natural gas.

In 2020, for instance, Henry Hub national prices averaged just $2.05 per MMBtu, their lowest in decades.

And this came as U.S. gas production dropped and demand stayed quietly on par with 2019 levels despite the economic devastation of Covid-19.

... Low prices for U.S. gas truly are a great thing.

Gas is now second to sister fuel oil and supplies 33% of our energy – and 40% of our electricity, double the share of second-place coal.

Low and stable natural gas prices have benefitted families and helped businesses reduce costs, saving a family of four, for instance, $2,500 per year since 2007.

This is most important for lower-income and communities of color because electricity is the most indispensable form of energy.

Low-cost energy might be our most vital weapon in the pursuit of racial justice: as a percentage of income, poorer Americans spend three to five times more on energy than wealthier ones do.

Even before Covid-19, nearly a third of Americans struggled to pay their energy bills.

And low-cost energy is the key to growing our economy.

It frees up more money for the consumer spending that constitutes almost 75% of U.S. gross domestic product.  

... Every time the Department of Energy’s National Modeling System peers into the future, it sees lower and lower priced natural gas.

Such low prices over the long-term will make market penetration more difficult for politically favored but naturally intermittent wind and solar power.

Electrification can only increase the need for gas because it could increase our power demand 65% or more.

Since the shale revolution took off in 2008, the U.S. has added about 130,000 MW of gas capacity, a 33% increase for state-of-the-art generating units built to stand for generations.

... It typically goes unmentioned, for instance, that ... many of our windiest and sunniest locations have already been taken.

But more wind and solar development actually depends on low-cost gas: gas is dispatchable and the backup for their natural intermittency.

More gas gives wind and solar a commercial chance.

For example, the U.S. now has some 530,000 MW of gas generation capacity, versus less than 2,000 MW of battery storage, with most of that able to run for only a few hours before needing a recharge.

From an environmental perspective, low-cost gas is crucial because fuel switching in most markets still pivots on gas versus coal – that is, higher-cost gas will simply mean turning to higher-emission coal.

Policymakers should take note: Americans will not tolerate higher-cost energy.

... Even through the calamity of Covid 2020, U.S. gas production dropped only 1%.

 Looking forward, new U.S. gas production will easily outpace our demand growth to keep domestic prices low.

The U.S. fracking industry (i.e., shale), for instance, which now supplies 85-90% of our gas, deploys evolving technologies to “do more with less.”

Consolidation in the business is complementing deep-pocketed bigger companies with smaller, more agile, and technically advanced ones, creating a synergy that will continue to cut costs.

Break-even prices dropped 30% last year, as belt tightening in the industry has excited Wall Street.

This boom in U.S. gas production, bringing lower costs, will have even more countries shopping for American gas.

After starting exports of shale from the contiguous 48 states in February 2016, the U.S. now exports gas via LNG to over 40 countries.

We operate six export terminals holding 11-12 Bcf/d of capacity.

A new one is slated to start up in October, and our build-out is wisely ongoing: the global LNG market is expected to double to ~100 Bcf/d by 2040.

All of this comes as the International Energy Agency has credited U.S. gas usage for the American feat of cutting CO2 emissions faster than any country in history.

And low-cost gas has allowed us to avoid the overbearing regulations and expensive energy that has plagued Europe via the failed Kyoto Protocol.

The strong environmental performance of “more gas” explains why new Energy Secretary Jennifer Granholm supports LNG exports.

American gas is critical to lower CO2 emissions in coal-dominated Asia.

With some 520,000 MW of new coal generation in the works globally (equal to about half of China's total coal capacity), U.S. LNG is integral to the goals of the Paris Agreement on climate change. "