Monday, July 30, 2012

Natural Gas - A Different View

One of my colleagues sent me a very interesting post which was the opening statement of David L. Greene, Oak Ridge National Laboratory to a committee looking into the uses of Natural Gas.  While I am a big supporter of natural gas in transportation I think it is always good to get a balanced view to any topic.  I have a saying I live by: "Nothing is ever as good as it seems and nothing is ever as bad as it seems".  This is almost always true when there is a "gold rush" into anything.  It was true of the Internet boom in the late '90s, turned out to be true in a devastating way with real estate and now, most likely, it is true in the natural gas boom.  Here are a couple of points:

  • Those who think NATGAS will remain wildly below the world price just because it is drilled here in the US may need a lesson in global economics.  Fuel / Oil is a very fungible commodity and because gas can be liquefied it can and will be exported if there is an arbitrage opportunity. 
  • In order to keep up with emissions requirements and total GHG reductions, the entire infrastructure (if built) for NATGAS would need to be dismantled by 2050.  I cannot vouch for the accuracy of this statement however it is right in line with what I have heard before which is NATGAS is somewhat of a "bridge" fuel.  It does not satisfy our overall objective to get to sustainable fuels and renewable energy.  But, and this is a big but, how long / far will the "bridge" be?  If you assume 2050 as this article does then it probably does not make sense to build it.  However, if you assume longer then it should be built.  This requires forecasting, a crystal ball and a bit of luck.  None of which I can do very well or possess. 
  • The differences in energy in NATGAS v. Diesel means a wholesale transition is highly doubtful.
The conclusions of the article are right in line with what I have been advocating all along:  Conversion to alternative fuels, such as NATGAS, are engineering questions and should be dealt with in this fashion.  A shipper needs to identify specific locations, specific applications and then decide type of fuel, truck etc. etc.  

The future is going to be highly complex as there will not be a "one size fits all".  Unfortunately, that takes 10X Thinking and we, as a species, tend to see the future through a rear view mirror.  We want a new fuel source to replicate the structures of oil and that, I can forecast for sure, will not happen. 

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