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The American Petroleum Institute (API) wants you to
know why natural gas has become more expensive. Although there are "ample
supplies" of this relatively clean burning and efficient fossil fuel, the "vast
majority" of new electricity-generation capacity in the U.S. is natural
gas-fired. It's been that way for the last 10 years and the trend will probably continue – at least if supply can keep up with demand, and integrated gasification combined cycle
(IGCC) technology for coal remains
immature.
But understanding natural gas prices is a bit more
difficult than rehashing Economics 101. Compared to coal, natural gas prices are
highly volatile. The cost of electricity generation is higher, too, which means that
natural gas is more expensive for powering base loads. Then there's the matter
of transportation. Although the cost of shipping coal can exceed the cost of
mining it, coal doesn't require a pipeline (although coal can be "shipped" as slurry).
The API notes that planned increases of liquefied natural gas (LNG) will
integrate the U.S. into a "world market", but what about LNG demand from Chinese
industry?
Is natural gas the fossil fuel of North America's
future?
Sources: API
and Global
Business Insights
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Re: The Fossil Fuel of the Future?
