There’s folks in Europe trying desperately to sell the idea that we are “RUNNING OUT!!!” (cue village idiot running around with big frizzy hair and a BBQ lighter stuck in it, rapidly pulling the lighter trigger…)
Well, we are NOT running out. In fact, the “trouble with coal” is just that we have too damn much energy supply. Hundreds of years of it. If and when price gets too high (for any of the competing fuels of coal, gas, oil), we break out the tools to make more available, then prices become too low and shut down exploration. In an ideal world, that would stabilize at a constant rate of exploration and production matched to the rate of decline of existing fields, but discovery (of fields or of methods) is not a continuous process, it is a point process, so the system ‘rings”…
This has been known almost forever. The Railroad Commission of Texas was set up to attempt to stabilize the boom / bust nature of oil “way back when”. It was OPEC before there was an OPEC and in some ways served as the model for OPEC when oil went more global.
The Railroad Commission of Texas (RRC; also sometimes called the Texas Railroad Commission, TRC) is the state agency that regulates the oil and gas industry, gas utilities, pipeline safety, safety in the liquefied petroleum gas (LPG) industry, and surface coal and uranium mining. Despite its name, it no longer regulates railroads.
Established by the Texas Legislature in 1891, it is the state’s oldest regulatory agency and began as part of the Efficiency Movement of the Progressive Era. From the 1930s to the 1960s it largely set world oil prices, but was displaced by OPEC (Organization of Petroleum Exporting Countries) after 1973. In 1984, the federal government took over transportation regulation for railroads, trucking and buses, but the Railroad Commission kept its name. With an annual budget of $79 million, it now focuses entirely on oil, gas, mining, propane, and pipelines, setting allocations for production each month.
Then along came the shale oil and natural gas booms… outside of The Railroad Commission of Texas and outside of OPEC.
Now natural gas is incredibly cheap. How cheap? Well, first some “units stuff”. Coal and gas here in the USA (where it is cheapest much of the time) is measured in “Million BTU” chunks. It is a convenient size, so all you folks afflicted with “One size never fits” SI units, get over it. How big is a MMBtu?
will let you turn it into whatever you want. It is 10 therms (what my gas bill from PG&E prices) or 1,055,000 kJoule (so a kJoule is almost the same as a MMBTU… It is also about 293 kiloWatt-hours and about 36 kg of coal (though various types of coal move that around a lot). For natural gas, it is roughly 1000 cubic feet ( 970 of ‘standard’ cubic feet). In short, it’s a lot of energy.
How much does it cost right now?
has natural gas prices, both historical and present. There is a spike about 2003 to near $18 / MMBtu, then a broader topping peak in 2006 at $15, convincing folks it was worth it to “do something”, then all over the continent folks started developing the harder to produce gas (via things like fracking and coal seam gas and more). The price now? The 5 prices are the days of the week for each week:
Henry Hub Natural Gas Spot Price (Dollars per Million Btu) Week Of Mon Tue Wed Thu Fri 2016 Apr-18 to Apr-22 1.76 1.94 1.94 1.96 1.92 2016 Apr-25 to Apr-29 1.97 1.97 1.88 1.88 1.89 2016 May- 2 to May- 6 1.91 1.94 2.03 2.05 1.86 2016 May- 9 to May-13 2.01 2.01 2.01 2.01 1.96 2016 May-16 to May-20 1.91
So bouncing around near $2 / MMBtu. How big is a gallon (US) of gasoline? Well, the modern stuff is diluted with alcohol, so not as valuable as it once was, but roughly:
Fuel: liquid, US gallons GGE GGE % BTU/gal kWh/gal HP-hr/gal Cal/litre Gasoline (base) 1.0000 100.0% 114,000 33.41 44.79 7594.0 Gasoline (conv., summer) 0.9960 100.4% 114,500 33.56 44.99 7624.5 Gasoline (conv., winter) 1.0130 98.72% 112,500 32.97 44.20 7496.5 Gasoline (ref. gasoline, E10 1.0190 98.14% 111,836 32.78 43.94 7452.4 [...] Gasoline (regular unleaded) 1.0000 100.0% 114,100 33.44 44.83 7594.0
About 0.11 MMBtu. Since gasoline is presently running about $2.50 / gallon, you can see that it is about 10 x as expensive as natural gas in bulk industrial quantities.
How about coal? Well, coal is driven by price competition against the alternatives, and now by the heavy hand of government destruction via regulation, and what is that price now?
Average weekly coal commodity spot prices dollars per mmbtu Week Week ago 04/15 04/22 04/29 05/06 05/13 change Central Appalachia 12,500 Btu, 1.2 SO2 $1.69 $1.69 $1.62 $1.62 $1.62 $0.00 Northern Appalachia 13,000 Btu,<3.0 SO2 $1.79 $1.79 $1.68 $1.68 $1.68 $0.00 Illinois Basin 11,800 Btu, 5.0 SO2 $1.34 $1.34 $1.34 $1.34 $1.34 $0.00 Powder River Basin 8,800 Btu, 0.8 SO2 $0.53 $0.53 $0.53 $0.53 $0.53 $0.00 Uinta Basin 11,700 Btu, 0.8 SO2 $1.62 $1.62 $1.62 $1.62 $1.62 $0.00
For high sulphur, low density, Powder River coal, it is 53 ¢ / MMBtu, or roughly a nickle / gallon of gasoline equivalent. Even low sulphur coal is priced 30 ¢ / MMBtu under natural gas due to the hand of regulations. Even there, it is 17 ¢ / Gallon Of Gasoline equivalent.
In any kind of sane world we would be converting natural gas and coal to gasoline. The technology for both is well proven and used in South Africa today. (At one time Mobile Oil in New Zealand converted their natural gas to gasoline, but I believe that project was abandoned when OPEC crashed prices to drive out the competition).
There is exactly zero non-political reason for anyone anywhere on the planet to be paying insane prices for energy, as is happening in the UK and Europe.
Now one could speculate as to why prices are so high… Ever since the start of the Texas Railroad Commission and later OPEC, the single goal has been to drive prices higher and stabilize them there. The families made rich off of oil and coal have not forgotten, nor gone away; yet now they support the “Green Movement” heavily. Think just a moment… Could it possibly be that they have simply found another vehicle to drive consumer payments “way high” for something that is literally “cheap as dirt”? Hmmm?
The raw material from which most of USA electricity is made runs about 190 / 293 ¢/kW-hr or well under a penny. Yet PG&E with summer time of day pricing wants $1 each for it in the Central Valley of California (but “only” 19 ¢ headed for 35 ¢ each other times…)
The simple fact is that we have no shortage of energy supplies at dirt cheap prices.
What we do have is a manipulated sewer of crony capitalists, government graft, organized monopoly cartels, and a long history of “screw the public”. The Green Blob and “Global Warming” scare as just the latest embodiment in a very old game….