Re: “But the reality is that natural gas simply has overwhelming advantages as a fuel...”
I agree. Those advantages are environmental prejudice, bureaucratic prejudice, and judicial prejudice.
As simple raw materials, coal and natural gas have almost identical costs per BTU.
But the upstream and downstream costs for coal are tens of billions of dollars higher because of hysterical and extremist regulation.
A brief anecdote...
In the 1950s I recall being on the open air observation deck of the Board of Trade Building in downtown Chicago with my Dad. The clear blue sky was filled with fly ash the size of potato chips, and you could clearly smell the steel mills in Gary, IN, about 30 miles to the south.
Thirty years later, I was splitting my time between Rochester, MN and Iowa City, IA. Both cities had downtown coal fired electrical plants. In the late 1980s - thirty years ago! - there was no smoke, no odor, and no coal dust anywhere. And coal was definitely king.
Strip away the extremist regulations and judicial rulings that have been layered onto the price of coal for the last 30 years, and coal would cost half as much natural gas, and in business, cost is the only “advantage” that ever matters.
I foresee two huge price risks coming for NG, by the way:
(1) NG is currently under $3. What is the viable life span of a tight shale NG well at $3? I actually don't know, but I'd be surprised if its more than 1 or 2 years. Bottom Line - unless the price of NG increases, there will definitely be supply issues in the near future.
(2) It is just a matter of time before some federal judge certifies an earthquake risk or earthquake damage lawsuit for a tight shale well or field. Never forget that NG hit $18 (!) in 2005, BEFORE tight shale and earthquake risk.
Thanks for your multiple comments, Warthog.
Although I was not persuaded by your argument, I am giving you an A+ for condescension.
We will just have to agree to disagree.
You choose to ignore all of the technical advantages of natural gas and blame things on "prejudice". But those prejudices arose for a real reason. Coal is simply a filthy fuel and produces toxic wastes, both gaseous and solid.
That isn't going to change.....ever. It is inherent in the nature of coal itself and its means of production. The added technology to overcome those problems simply costs a good deal of money, both to install and run.
The folks who actually drill for and produce the gas wells don't see a supply problem developing in the near-term future.
The Netpower consortium's new gas turbine system can source it's btu's from NG or producer gas from coal. Sour natural gas can be burned without pre-treatment directly from the well. All of coal's pollutants after the gasification process are passed through the turbine, captured within the condensate of combustion produced water, and then separated out as chemical feed-stock. All the CO2 can be captured; but, if not captured the system could run between 1 to 1.5 percent more efficient. Operation before making a pipeline connection for disposition of CO2 is possible.
Operating upon natural gas the system is about 59-61 in overall efficiency while performing CO2 capture. The rub concerning coal as a fuel source is that overall efficiency with bituminous grade will be about 50%, still an increase of 12 points above current coal fired fleet average. There is no release of combustion products into the atmosphere--all combustion products are captured--so no after-hand remediation is required.
Capitol cost for a NG fired commercial plant is pegged at about $300 million for a 300-megawatt capacity plant. The long term cost of electricity (LCOE) over the lifetime of the natural gas fired plant based upon NG at $2.85 per million btu, is $41 per megawatt hour. For coal LCOE is $64/MWh with coal at $1.73/MMBTU. These figures are based upon 2013 energy information resources, and ignore cost reductions possible by sale of pure CO2 (coal vs NG 2:1 ratio CO2) and the other gases available from the Air Products plant.
Long term price trend of coal adjusted for inflation from 1947 to 2007. Sharp rise in price after oil embargo early 70's, and at the beginning of a crude oil price rise 2005, before NG price decoupled from the price of crude oil.
