Everyone likes a bargain, right? Depends on how that bargain is handled. Depends on the smarts of the utility to be able to use that trend well for customers.
That is the discussion as the Energy Information Agency said that for the fourth month in a row, natural gas prices are depressed. If utilities are using natural gas to make power that could eventually result in lower electric prices.
Who might not like lower natural gas prices? Vendors who sell renewable power systems or people who want their power made only from renewable energy. That is because low natural gas prices can make renewables less competitive, so maybe less desirable in the power system.
“Gas is such a bargain that it’s being viewed less as a bridge fossil fuel, driving the world away from dirtier coal toward a clean-energy future, and more as a hurdle that could slow the trip down. Some forecasters are predicting prices will stay low for years, making it tough for states, cities and utilities to achieve their goals of being zero-carbon in power production by 2050 or earlier,” says World Oil magazine.
“A bearish conflagration ignited by plunging demand and stoked by uncertainty took gas futures prices to two-decade lows last week,” said Energy Intelligence just last week.
“Gasmaggedon” is what TreeHugger magazine (right) calls the low natural gas price. “Cheap gas means there is little incentive to invest in batteries or other storage technologies needed to go totally renewable, especially when the gas companies keep calling it a “bridge fuel” that’s cleaner than coal; the bridge just keeps getting longer and longer until the other end is out of sight.”
Public opinion versus public action can differ. When asked, people may say they want renewable energy. When an option of cheaper costs is factored in, people like to save money. There is a push-and-pull of idealism and economics.
Utility companies, in our opinion, require superior analytical skills, a track record of being able to execute on plans, and be nimble in financial resources and decision-making to take advantage of the changing fuel and energy environment. These traits are essential to represent customers well.
Natural gas has had its place in our fuels and carbon footprint. As gas has replaced coal plant power generation, emissions go down. Natural gas has a carbon print, however, just lower than coal, but more than wind, for instance. A “bridge fuel” from coal to renewables has been what natural gas is called.
With lower gas prices the question is being asked on a national basis: Will natural gas power generation become a really long bridge?