Cheap Natural Gas Heralds an Energy Revolution That Will Displace Nuclear, Coal, Wind and Solar

May 1, 2012 04:36


“[I]t is ironic also that cheap gas will completely remove the need for electricity generated by solar or wind—much to the chagrin of environmental zealots. And all those folks hoping that energy prices would continue to rise and that electricity costs would “skyrocket” will be sorely disappointed.”

 

 

By Mark J. Perry

 

 

Fred Singer writing for the Independent Institute:

“Consider the consequences of having huge quantities of cheap natural gas available. It will make new coal-fired power plants uneconomic, but it will also make new nuclear plants uneconomic. It is ironic that these two longed-for goals of radical environmentalists are being achieved simply through economics, without the need for any regulation.
But it is ironic also that cheap gas will completely remove the need for electricity generated by solar or wind—much to the chagrin of environmental zealots. And all those folks hoping that energy prices would continue to rise and that electricity costs would “skyrocket” will be sorely disappointed.”
MP:  The huge bonanza of cheap abundant natural gas is the most positive development in America’s energy outlook in 50 years as Mort Zuckerman wrote in the WSJ last November, where he also suggested that a seismic shift in the energy landscape as large as the recent shale revolution is extremely rare.  One of the profound implications of the “shale gale” is that its remarkable abundance will displace not only coal and nuclear as energy sources, but also solar and wind energy as well, as Fred Singer points out.Fortunately, “shale gas seemed to sneak up unannounced to the media and Beltway elites, even though people inside the gas industry realized several years ago what was rapidly taking place,” according to AEI’s Steve Hayward.  “One overlooked aspect of the current technology-driven fossil fuel energy boom going on in the U.S. right now is that if Washington had any premonition it was going to happen, it would surely have done something to stop it.”

Update: The chart above shows natural gas production through February as reported today by the EIA.  On a 12-month moving average basis, natural gas production in February set another all-time record and went above 2.4 trillion cubic feet for the first time ever.

HT: Warren Smith

Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota.


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