Direct-Use Natural Gas Needs a Free Market Too (‘deep decarbonization’ easy target for elimination in new policy era)

“The basic strategy of deep decarbonization is to ‘electrify everything’ because, theoretically, someday soon, wind and solar could affordably displace all fossil fuels. The analytical basis of such beliefs, however, comes up radically short.”

“Alternatives to electricity should also be given a fair chance to compete for consumers—free of regulatory bias.”

“The economics of natural gas direct use is also superior to natural gas via the electric grid because it is far less capital intensive.”

The Rolling Stones song playing in the background during President-Elect Trump’s victory speech contained an important message to the American People:

“You can’t always get what you want. But if you try sometimes well you might find you get what you need.”

Something else the American people need is the continued right to choose natural gas for their homes and businesses. Under President Obama, natural-gas direct use was slowly but surely being eliminated under the guise of “Deep Decarbonization,” which is integral to the “Paris Accords.”

The basic strategy of deep decarbonization is to “electrify everything” because, theoretically, someday soon, wind and solar could affordably displace all fossil fuels. The analytical basis of such beliefs, however, comes up radically short.

What does mandated substitution from gas to electricity cost consumers and the economy? Where is the economic feasibility analyses that can be independently scrutinized and debated? Why “bet the farm” per U.N. dictates?

Hopefully, going forward, at least an open debate can begin. Alternatives to electricity should also be given a fair chance to compete for consumers—free of regulatory bias. Otherwise, we will continue down the same path as we have been taking under Obama: the energy equivalent of ethnic cleansing, under which consumers are able to choose so long as that choice is electricity.

A prime example of such theories in regulatory action is the U.S. Department of Energy’s ongoing efforts to ban traditional (non-condensing) natural gas-fueled furnaces, boilers and water heaters. And again, the analytical justification for such actions are sorely deficient.

The bottom line is that American consumers are getting ripped-off under the guise of “energy efficiency” and, in the process, our economy is being undermined by giving electricity a virtual monopoly over energy in this country based upon the illogical hope that renewables will somehow stop global climate change.

Here are the facts: Natural gas delivers about four Quads more energy to U.S. consumers than electricity:

Table 1: Quads of Energy Delivered to Select Sectors of End-Use Consumption

Note:  A Quad is a unit of energy equal to a quadrillion (10¹⁵) Btu

The following table converts Quads into Dollars and compares gas and electric revenues for residential, commercial, and industrial sectors (again using EIA data):

Table 2: Cost of Energy Delivered to Select Sectors of End-Use Consumption

Having both revenue and Quads for electricity and natural gas for these three end-use sectors, costs per Quad can be calculated and compared.

Table 3: Cost of Energy per Quad Delivered to Select Sectors of End-Use Consumption

Rule by rule, DOE is still chipping away at consumer choice and the underlying economy. In the process, DOE is lessening competition by forcing higher (more expensive) levels of efficiency on gas products while basically leaving much less efficient (on a full fuel-cycle basis) electric resistance appliances “off the hook.” Simultaneously, DOE is waging an unauthorized war against non-condensing appliance venting systems under the guise of energy efficiency.

As an example, in the Midwest, replacing one electric water heater with a natural gas water heater reduces CO2 emissions 2 to 5 tons (depending upon EPA’s eGRID location) and the customer saves $400-$800 annually in utility costs. These emissions reductions and utility savings also occur, on average, across the U.S.

Meanwhile, electric rates have increased over 50% in these Midwest service territories over the past decade while natural gas rates have decreased. Electric rates will continue to climb as electric utilities embrace expensive renewables and shutter low cost coal plants; in comparison, natural gas is cheap, plentiful and will remain so over the next decade. The economics of natural gas direct use is also superior to natural gas via the electric grid because it is far less capital intensive.

Dear Trump Energy Team: Please contact me directly for additional information: mekrebs@charter.net

——————-

[1] http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_2

[2] Derived from Natural Gas Annual Respondent Query System (EIA-176 Data through 2013): http://www.eia.gov/cfapps/ngqs/ngqs.cfm?f_report=RP1