Thursday, December 03, 2009

Gas Rising

The Climategate scandal has surely halted, if not reversed, the movement toward reducing carbon emissions. One beneficiary of the change in the political climate may be natural gas producers, who have been beset by recently falling demand.
Natural gas stockpile levels rose again to a new record high last week, the government said Thursday.

The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states grew by 2 billion cubic feet to about 3.84 trillion cubic feet for the week ended Nov. 27.
If human-caused ("anthropogenic") global warming turns out to be unimportant or a mistake or a hoax, the wind will be taken out of alternative-energy and nuclear-energy development. And of the two leading methods of generating electricity in the United States, natural gas produces far less pollution than coal:
The average emissions rates in the United States from natural gas-fired generation are: 1135 lbs/MWh of carbon dioxide, 0.1 lbs/MWh of sulfur dioxide, and 1.7 lbs/MWh of nitrogen oxides. Compared to the average air emissions from coal-fired generation, natural gas produces half as much carbon dioxide, less than a third as much nitrogen oxides, and one percent as much sulfur oxides at the power plant.
Recent estimates put U.S. reserves of natural gas at 2,000 trillion (!) cubic feet, roughly a 90-year supply at the current rate of U.S. consumption. Coal is the source for nearly twice as much power generation as second-place natural gas. Look for gas to rise in the coming years.

Chart from Department of Energy

[Disclosure: 1-2% of my portfolio is invested in natural-gas companies and ETFs.]

[Update - 12/4/09: today's Washington Post has an article on U.S. natural gas reserves and technological advances in the extraction thereof. It appears that the "90-year supply" above was a bit understated: "The United States is sitting on over 100 years of gas supply at the current rates of consumption" said British Petroleum CEO Tony Hayward.]

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