Update on US natural gas, coal, nuclear, and renewables

On August 6, I wrote a post called Making Sense of the US Oil Story, in which I looked at US oil. In this post, I would like to look at other sources of US energy. Of course, the energy source we hear most about is natural gas. We continue to be a net natural gas importer, even as our own production rises.

Figure 1. US natural gas production and consumption, based on EIA data.

Figure 1. US natural gas production and consumption, based on EIA data.

US natural gas production leveled off in 2013, because of the low level of US natural gas prices. In 2013, there was growth in gas production in Pennsylvania in the Marcellus, but many other states, including Texas, saw decreases in production. In early 2014, natural gas prices have been higher, so natural gas production is rising again, roughly at a 4% annual rate.

The US-Canada-Mexican natural gas system is more or less a closed system (at least until LNG exports come online in the next few years) so whatever natural gas is produced, is used. Because of this, natural gas prices rise or fall so that demand matches supply. Natural gas producers have found this pricing situation objectionable because natural gas prices tend to settle at a low level, relative to the cost of production. This is the reason for the big push for natural gas exports. The hope, from producers’ point of view, is that exports will push US natural gas prices higher, making more natural gas production economic.

The Coal / Natural Gas Switch

If natural gas is cheap and plentiful, it tends to switch with coal for electricity production. We can see this in electricity consumption–natural gas was particularly cheap in 2012:

Figure 2. Selected Fuels Share of US Electricity - Coal, Natural Gas, and the sum of Coal plus Natural Gas

Figure 2. Selected Fuels Share of US Electricity Production – Coal, Natural Gas, and the sum of Coal plus Natural Gas, based on EIA data.

Coal use increased further in early 2014, because of the cold winter and higher natural gas prices. In Figure 2, there is a slight downward trend in the sum of coal and natural gas’s share of electricity, as renewables add their (rather small) effect. Continue reading

A Few Insights Regarding Today’s Nuclear Situation

The issue of nuclear electricity is a complex one. In this post, I offer a few insights into the nuclear electric situation based on recent reports and statistical data.

Nuclear Electric Production Is Already Declining

Figure 1. World nuclear electric production split by major producing countries, based on BP’s 2012 Statistical Review of World Energy. FSU is Former Soviet Union.

According to BP’s Statistical Review of World Energy, the highest year of nuclear electric production was 2006.

There are really two trends taking place, however.

1. The countries that adopted nuclear first, that is the United States, Europe, Japan, and Russia, have been experiencing flat to declining nuclear electricity production. The countries with actual declines in generation are Japan and some of the countries in Europe outside of France.

2. The countries that began adopting nuclear later, particularly the developing countries, are continuing to show growth. China and India in particular are adding nuclear production.

The long-term trend depends on how these two opposite trends balance out. There may also be new facilities built, and some “uprates” of old facilities, among existing large users of nuclear. Russia, in particular, has been mentioned as being interested in adding more nuclear. Continue reading

The Growing Part of the World in Charts

Some parts of the world pretty much sailed through the 2008-2009 recession, while other parts of the world had huge problems. The part that sailed through the recession is what I call the “Growing Part of the World.”

I thought it would be interesting to see how the countries in the “Growing Part of the World” have behaved over the long term with respect to a number of variables (energy, GDP, and population). I compare these countries to two other groups of countries which did not fare as well during the 2008-2009 recession:

  1. European Union 27, United States and Japan
  2. Former Soviet Union (FSU)

Together these three groups equal the whole world, which is why I call the Growing Part of the World “Remainder” on my charts.

Figure 1 (below) shows that GDP growth rates have been quite different over the long term for the three groups, with the growth rate of the Growing Group higher than that of EU, US and Japan. The FSU’s growth rate has been more variable. Thus, it is not just during the 2008-2009 recession that the groups were different.

Figure 1 – Annual per cent increase in real GDP by area, based on USDA Economic Research Service data. “Remainder” corresponds to the Growing Part of the World.

The charts I have prepared show huge differences in variables besides GDP growth: in population levels, growth rate of population, and types of energy used, for example. The amount of energy for each unit of GDP varies widely, as does the pattern over time. While the FSU and the “EU, US & Japan” grouping show lower energy consumption for each unite of GDP over time, the Growing Group in total does not.

At the end of this post, I explain the reasons that why the Growing Part of the World seems to be doing so much better than the world economically and offer my view of what its prospects are for the future.

Continue reading

Uranium supply update

Will uranium supply be adequate for planned nuclear electricity? This question has seen sharply differing views. The purpose of this post is to give an update, showing where we are now.

The supply situation is recently looking better, partly because of an increase in uranium supply from Kazakhstan and partly because of cutbacks in plans for new reactors in response to the Fukushima accident. Reactors are very long-lived, however, and providing sufficient long-term uranium supply when oil supply is declining due to peak oil may be a challenge.

Figure 1. World uranium production and demand (Graph by World Nuclear Association)

Continue reading

The Context of Hubbert’s Peak in World Oil Forecast

(Note: This is a post I wrote which is published in today’s ASPO-USA newsletter.)

Recently when I was reading some of the papers M. King Hubbert wrote, one thing struck me was the context in which he made his forecast regarding how world oil supply would peak and decline. He made this forecast in the context of having plenty of other fuel supply from other sources already developed, to offset this decline.

The three graphs shown in this paper are from Hubbert’s 1956 paper, Nuclear Energy and the Fossil Fuels. Based on Figure 30, it is clear that he expected nuclear energy to raise total energy production to a very high level, even before fossil fuels began to decline.

In his 1962 report, Energy Resources – A Report to the Committee on Natural Resources, Hubbert writes about the possibility of having so much cheap energy that it would be possible to essentially reverse combustion–-combine energy plus carbon dioxide and water to produce new types of fuel plus water. If we could do this, it would be possible to fix our high CO2 levels and produce lots of fuel for our current vehicles, even without fossil fuels. Continue reading