Americans already know about the U.S. natural gas revolution based on shale, with production up from 58 Bcf/day in 2008 to 75 Bcf/day today. This incremental increase has been so large that, if standing as its own nation, our shale gas production surge since 2008 alone would be the world’s 3rd largest natural gas supplier in the world, behind Russia and the U.S. in supplies not from shale. This has enabled a huge shift in natural gas demand throughout the U.S. economy. Gas is an increasingly attractive fuel to help cut greenhouse gas emissions: gas is scalable, cleaner, cheaper, abundant, more flexible, and reliable.
When combusted, natural gas emits 30% less CO2 than oil and 45% less than coal and has lower levels of nitrogen oxides, sulfur dioxide, and particulate matter. Aeasily the projected fastest growing U.S. fossil fuel, rising 1% per year, natural gas is the key source to a more sustainable energy future. Natural gas will be essential to allowing wind and solar power to assume a more significant role in our energy mix by backing up their natural intermittency. Although this is an added cost for wind and solar that is typically not included in costs estimates by those promoting renewables. The combined cycle gas turbine (CCGT) technology makes gas an especially attractive fuel for electricity generation, able to be built in just 1-2 years, with lower initial investment and thermal efficiencies that can reach above 60%.
The EIA’s projection shows that natural gas could supply 33% of U.S. electricity by as early as 2020, compared to 27% in 2014. And under the “Clean Power Plan” natural gas will become the primary fuel for electricity. The Clean Power Plan places an essentially non-retractable bet that wind and solar energy will provide 55% of our incremental power by 2030. But these two sources have never produced even 5% of America’s electricity, and cheaper gas will be what compensates for shortfalls. The IEA’s projection that U.S. gas power capacity will increase nearly 20% by 2030 seems conservative. The EIA’s average levelized costs for plants entering service in 2020 have gas plants at just $75 per megawatt hour, far below its main competitors. Since 1995, 75% of new power capacity has been gas-fired units. Gas prices for power generation was just $3.23 per Thousand Cubic Feet, a 40% drop year-over year.
In the industrial sector, the 2nd largest demand source, more gas will be in step with the sector’s overall growth, as the shale boom and low-cost natural gas feedstocks are fueling a $150 billion dollar industrial resurgence in the petrochemical industry. Importantly, manufacturing are the jobs that we want to create: manufacturing jobs are higher paying and the industry has a larger “multiplier effect” than any other major economic activity – $1 spent in manufacturing generates $1.35 in additional economic activity.
And the natural gas industry is constructing and reconfiguring infrastructure to support the changes in its rapidly expanding market. For decades, gas pipelines have run south (production centers) to north (demand centers), but the two key shale plays in Pennsylvania (Marcellus) and Ohio (Utica) have “changed the game.” Since 2012,”takeaway” pipelines (that get gas out of production areas) in the Northeast region have accounted for about 55% of transmission pipeline capacity additions in the country. Per the EIA“32% of natural gas pipeline capacity into the Northeast could be bidirectional by 2017.” Fact is…public opinion strongly supports more pipeline projects (see herehere).
Rising U.S. Natural Gas Demand by Sector

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