Peak Gas Is Coming to the U.S. Sooner Than Anyone Expected

[riversedge]

whow. I really had no idea it is peaking already.

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Peak Gas Is Coming to the U.S. Sooner Than Anyone Expected

https://www.bloomberg.com/graphics/2020-natural-gas-demand-peak/?sref=oUjKJw8m


By Naureen Malik, Brian Eckhouse, Dave Merrill and Jeremy C.F. Lin


October 22, 2020

One of the largest utilities in the U.S. put $8 billion into a bet that natural gas would dominate American electricity much like coal had before. “We really consider this to be a growth play,” Tom Fanning, chief executive officer of Southern Co., said in an interview just five years ago, as his company set on its landmark acquisition: natural-gas distributor AGL Resources Inc.

Gas looked to be on the verge of generational dominance at the time. The American fracking boom had made the fuel superabundant and cheap, hastening coal’s rapid decline, while energy from wind and solar had higher costs and lower reliability. A giant utility like Southern would naturally see gas pipelines and storage as the key to a durable and lucrative future, meeting demand that would continue to grow.

Now those expansive time horizons are in deep doubt. In fact, there are flashing signs that the U.S. power sector is approaching peak gas, with demand topping out decades ahead of schedule. “The era of robust growth in the U.S. natural gas market is likely coming to a close,” says Devin McDermott, an analyst at Morgan Stanley. “It doesn’t mean the market falls apart. It doesn’t mean gas demand falls off of a cliff. It means that we need less new supply going forward.”
Several states including California and New York already have legal mandates to reach 100% renewable or carbon-free electricity by 2050 or sooner. This is just the start.


The others have established mandatory goals below 100% or voluntary targets. All told, more than half of U.S. states have established renewable-energy targets that will push utilities away from gas.


At the local level, more than 30 cities have put in place gas hook-up moratoriums on new construction in support of all-electric buildings.


Source: National Conference of State Legislatures


Note: Colorado's 100% clean-energy requirement is for utilities serving 500,000 or more customers.

Natural gas only fulfilled its destiny as the nation’s top power source in 2016, backed by hundreds of billions of dollars invested in the creation of a gas-based economy. Renewables could take over as the No. 1 power source on the grid as soon as 2028, according to projections by McDermott and Morgan Stanley analyst Stephen Byrd.

The American gas peak will mark a critical juncture—and it may have already been reached. .........................................

[PirateRo]

1. this just means prices are going up for no real reason

The same thing happened with peak oil back in 1976. And diamond markets. Anything to artificially raise prices.

[PoindexterOglethorpe]

2. Huh? People are driving a whole lot less than usual.

I'm retired already, so a work commute didn't stop, but normally I make several long distance drives each year, which keeps my overall mileage on the car up.

At the very beginning of this year I decided to put a notebook and pen in the car to keep track of how much gas I get and what it costs. These days I'm buying gas once a month or less.

[kurtcagle]

3. This should not come as a shock to anyone

There are a fair number of benefits that come with utilizing liquid natural gas (LMG) - it burns cleaner than higher length oil derivatives, it is produced by natural processes rather than the VERY slow process of building octane and nonane chain hydrocarbons, and like gasoline, it can be readily processed into a liquid, albeit one under pressure. The problem with LNG (methane, essentially) is that it is a considerably more potent greenhouse gas than CO2 is, and without recapturing it, we're significantly exacerbating climate change.

The growing use of electric vehicles (eVs) shifts the dynamic away from a liquid focused to a battery focused technology for providing motive force. LNG made some sense for heating water (which in turn provides heat to houses in the winter) and for cooking, but the big use case that LNG companies were hoping to make them rich - providing an alternative to gasoline for cars - is now very much threatened by the rise of eVs. At best, LNG might end up being stored as an adjunct to batteries for alternative power, but even that's becoming less of an issue as battery technology is improved.

What the OP failed to make the distinction on was that this is not a supply-side issue - it's another form of peak demand. We have between 85 and 120 years worth of natural gas, more if we want to take advantage of offshore clathrates, but just as with oil, demand for LNG is dropping because we are using less as both the technology improves and the demand drops in response to slowing macroscopic growth (over the next forty years). If, as is possible, we have fusion reactors in place here in the US by 2035 (the CERN tokamak looks to go live in 2024) then demand will drop even more, largely due to the phase out of non-eVs between now and 2050.