Natural Gas Facing Some Of The Same Headwinds Coal Faced Ten Years Ago [View all]

[hatrack]

The former vice president’s efforts to walk a tightrope on gas reflect the fossil fuel’s precarious place in the economy. For now, it’s an essential part of American life. Biden has been careful not to make an enemy of the industry, especially in the key battleground state of Pennsylvania, home to the largest U.S. shale-gas field. His policies may even, in the short-term, support the gas market.

But in the long run, the fuel may prove economically and environmentally untenable within the power sector, a key market for producers. Biden’s climate plan would only accelerate that outcome, with massive investments in wind, solar and battery storage giving those energy sources a leg up. And his goal of a carbon-neutral grid would severely curb, if not destroy, gas’s share of the pie in favor of cheaper, cleaner renewables. “Decarbonization isn’t a debate — it’s a fossil-fuel death sentence,” said Kevin Book, managing director of ClearView Energy Partners. “It means a resource is going off the grid. That is the inevitable implication.”

Gas, like coal a decade ago, is facing economic headwinds. While it’s still the nation’s dominant fuel source, it’s less competitive against renewables than it used to be. Solar and wind are now cheaper than gas-fired power in two-thirds of the world, according to a BloombergNEF report. In the U.S., solar and wind are already less expensive than even the most efficient type of new gas-fired turbine, Lazard Ltd. said Monday.

EDIT

The economics put gas in a roughly similar position as coal in the years before President Barack Obama took office. In coal’s case, Obama hastened its decline by imposing new environmental regulations that made coal plants more costly to operate – notably the 2012 Mercury and Air Toxics Standards that limited toxic emissions from plants, and the 2015 Clean Power Plan that curbed carbon emissions. A Biden administration could take a similar tack, imposing new — and more stringent — limits on greenhouse gas emissions from power plants. He could also reinstate and possibly strengthen Obama-era rules curbing methane leaks from gas infrastructure, which were repealed by President Donald Trump. Both have the potential to drive up the cost of gas-fired electricity, without banning the fuel.

EDIT

https://climatecrocks.com/2020/10/19/gas-looking-like-coal-just-before-the-crash/#more-62469