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America at Energy Crossroads, Part 2

October 26, 2012

America is at a crossroads: Either we will use fossil fuels, of which the U.S. has in great abundance – or will we pursue a so-called clean energy strategy that threatens our standard of living?

Part 1 explained why wind and solar aren’t up to the task of providing low-cost electricity.

This will examine the role of NGCC power generation using natural gas.

Increasing natural gas usage will face four obstacles.

  • Will increased usage increase the cost of natural gas and thereby increase the cost of electricity to consumers and threaten the construction of new chemical plants in the U.S.?
  • Will increased usage require building new pipelines, and thereby increase the cost of natural gas and electricity?
  • Will increased usage require new storage capacity?
  • Will increased usage result in “curtailment”, where NGCC power plants are shut down?


Existing NGCC units use approximately 6.9 trillion cubic feet of natural gas per year (Tcf/y), which is about one third of current total U.S. natural gas usage and production.

Building the needed additional NGCC plants will approximately double the use of natural gas for generating electricity, which, in turn, brings total usage for all purposes to around 29 Tcf/y7, probably slightly more due to population growth and conversion from oil to natural gas for home heating. Demand is highly cyclical, with peaks during the winter, so that storage capacity is required to smooth supply.

Total supply, without considering increased natural gas usage by industry, will have to be increased by about one third.

The cost of natural gas may increase as the result of additional demand from electricity generation AND industrial demand as new chemical plants are built.

Fracking has made it possible to meet this increased demand. If the Sierra Club8 has its way, and if the EPA continues its assault on fracking, the natural gas bonanza will evaporate, demand will outstrip supply and costs will increase.


The U.S. currently has over 300,000 miles of natural gas pipelines.

The Interstate Natural Gas Association of America (INGAA) estimated that 61,000 miles of new pipelines would have to be built at a cost of $161 Billion if demand increased by 6.6 Tcf/y.


As of April 2009, EIA reported roughly 400 underground gas storage fields in operation.

There are basically three types of storage:

  • Depleted oil or gas reservoirs, 326 sites
  • Salt caverns, 31 sites
  • Aquifers, 43 sites

Depleted reservoirs are mostly single-turn sites, where they are filled and drained once each year. Multi-turn sites provide for filling and withdrawal several times during the year, and are more flexible.

Salt caverns are mostly along the Gulf Coast. Aquifers are nearly all in the Midwest (Iowa, Illinois and Indiana).

The following states and areas lack easy access to storage sites: Most Central Plains states, plus Missouri, Wisconsin, Arizona, Nevada, Idaho, and all Southeastern, most Mid-Atlantic, and all Northeastern states.

In addition, several major pipelines do not have access to storage sites.

These conditions create two problems:

  • Lack of flexibility makes it difficult for NGCC plants to accurately and cost effectively schedule deliveries
  • New NGCC plants may lack easy access to storage in many areas of the country

The first will increase operating costs and the cost of electricity.

The second requires investments in new storage capabilities, to the tune of approximately $12.5 billion9 that will eventually increase the cost of electricity to consumers.


During periods when natural gas may be in short supply, natural gas is curtailed first to large users, including NGCC power plants.

Pipeline and local distribution companies will do practically anything to prevent home owners from losing their supply of natural gas. The impetus for this is to keep homes warm, but also to preclude the very costly process of going from neighborhood to neighborhood, and home to home, to close distribution valves, possibly purging lines of air, then reopening valves at each meter and turning on pilot lights.


The fact is, in either energy strategy, more natural gas plants will be built, but the cost of electricity will be different.

However, it wouldn’t be necessary to build approximately 60 NGCC plants at a cost of $55 billion if coal-fired power plants didn’t have to be replaced because of EPA regulations.

Our energy crossroads is a choice between using our abundant natural resources, oil, natural gas and coal, or restricting our use of coal, limiting our supply of oil from North America and curtailing production of natural gas.

In the first instance, we open federal lands and the outer continental shelf to drilling, fracking is allowed with states, not the EPA, providing oversight and letting free markets decide whether coal or natural gas, including any needed additions to supporting infrastructure, provides the least costly electricity.

In the administration’s clean energy strategy, the use of coal is prohibited, drilling is restricted and fracking is curtailed, thereby ending our abundant supply of low-cost natural gas. The cost of electricity to homeowners and industry rises as the cost of natural gas increases and more expensive wind and solar generated electricity is used. New chemical plants won’t be built because of the high cost of natural gas.

The choice is between a vibrant economy with low-cost electricity and ample oil from North America – or a stunted economy, with high cost electricity and oil imported from Venezuela and the Mideast.


7. This is consistent with the results of a study (table 2) by the Aspen Environmental Group for the American Public Power Association in 2010.
8. Robin Mann, Sierra Club President said:

“Fossil fuels have no part in America’s energy future – coal, oil and natural gas are literally poisoning us. The emergence of natural gas as a significant part of our energy mix is particularly frightening because it dangerously postpones investment in clean energy at a time when we should be doubling down on wind, solar and energy efficiency.”

9 Interstate Natural Gas Association of America, 2010 study.

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