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Linn Energy, LLC (LINE) Message Board

  • supernova60609 supernova60609 Dec 12, 2013 12:51 PM Flag

    Learning about the industry you're investing in

    Natural gas asset decisions - It's more than just price.

    By Tom Alley, Vice President, Generation, the Electric Power Research Institut.

    Electric power generators in the U.S. today are making fleet asset decisions that will affect the affordability and reliability of power from all plants for decades to come, and their overwhelming favorite fuel choices for new assets are natural gas and renewables. A recent report by the U.S. Energy Information Administration (EIA) projects that of the estimated 52 gigawatts of new capacity by 2015, half will come from natural gas, followed by solar, wind and then coal.

    On paper, these asset choices look easy. Domestic gas prices have fallen by more than 70 percent in the last few years due to abundant supplies. And recent estimates indicate more than 500 trillion cubic feet of natural gas are now recoverable in shale formations, raising projected U.S. gas reserves to more than a century of supply. That's good new for prices, at least for the near term.

    Coal is still relatively cheap but existing emissions regulations and uncertainty over new restrictions are keeping it far down on the list of asset options. Gas plant emissions can be as much as 70 percent less than coal, and they cost less to operate. According to the EIA's Energy Outlook 2011, total electricity production costs from a conventional coal-fired plant amount to about 9.5 cents/kWh, while a modern gas plant came in at about 6.6 cents/kWh.

    That same EIA report projects that natural gas will have the fastest growth rate among the fossil fuels from 2008 to 2035. It estimates global natural gas consumption will increase 1.6 percent per year, from 111 trillion cubic feet in 2008 to 169 trillion cubic feet in 2035.

    The bottom line is, today it's cheaper to make

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Problem with the Obama EIA figures? The high cost coal contains assumptions on economically impossible pollution control mandates. Many of which like the sulfur are simple insanity to increase the cost of energy.

      Coal is cheaper than nature gas in the real world. Whether it is smoke choked Asia or the Europeans destroying the rationality of their energy grid with 'alternatives'.

      At some point American natural gas will rise to the world price expressed in oil btus less a sizable discount for very high transportation costs. Coal in modern American plants is clean for all rational purposes. Abusing the EPA law to kill it will make real whole world pollution extremely worse.

      What will happen if Obama and the Progressives are not blocked in their delusive religion can be seen today. Look at Europe. Economic crisis and producing more co2 than before all this GW insanity is a reason to do more of it. Because it is not working.

 
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