Natural Gas Growth In The US -- October 26, 2015

This is really cool, again something I wouldn't have known about, much less thought about, had I not blogged. Something called the "NERC" divides North America into eight regions. Most of the regions are multi-state / multi-province, but a couple of them are pretty much just one state, e.g., Texas (TRE) and Florida (FRCC). I assume the latter is based on something other than just economics / customer base.

Be that as it may. 

These are three very, very interesting graphs taken from a Seeking Alpha contribution today.

The first graph is projected natural gas-fired generation increase by region (note that only four regions are broken out; the fifth ("rest of the US") consists of the other four regions which includes the midwest (two sub-regions, not very many people), the northeast (a lot of faux environmentalists, looking more and more like the EU) and Florida.

Based on the graph, it looks like the following:

• the western region has a few coal plants to retire, and a bit of wind competition when it comes to NG in the short ter, but by 2025, the writing is on the wall: natural gas will be needed in huge amounts (I wonder if this doesn't correspond to nuclear plants reaching the end of their programmed life?)
• the Texas region takes off in 2025; probably simply due to growth, residential and commercial
• the southeast region has the largest number of coal plants to retire; certainly no wind competing; maybe nuclear plants retiring, also (I don't know)
• the Indiana-Ohio-Pennsylvania corridor as well as the rest of the US appear to simply mirror growth (and/or the loss of nuclear plants)

What stands out most but doesn't necessarily surprise me is the growth in the southeast, which by 2040 passes all the other regions. The "rest of the US" which includes the northeast, the continental midsection, and Florida, plateaus.

But again, look at the most interesting part of that graph. For all intents and purposes, the WECC is California. For all intents and purposes, for this discussion, nothing else matters in the WECC. Just California. Look at the amount of NG growth projected for "California." It's the only region that is still (very, very slightly) negative in 2020 and then surges, surpassing all other regions in the US. Even those who still read Dr Seuss can see that. It's incredible. It would be interesting to see an in-depth analysis of why that will occur -- perhaps the California bullet train is going to use a lot more electricity than we imagine -- and all those EVs. Or maybe it's the retirement of nuclear energy plants.

The second graph is of less interest and I hate the 3-D effect; it's hard to see the actual tops -- when I see this kind of graph it suggests the author might be trying to hide something (or just make the graph look more interesting).

It's easy to see that coal pretty much holds its own, despite all the headwinds. But speaking of wind (headwinds and tailwinds), look at the growth of intermittent energy, from about 0.42 to almost exactly 0.8 (a 90% increase -- rounding, intermittent energy doubles between now and 2040. Natural gas, on the other hand jumps from almost exactly 1.20 to 1.70 or something like that -- again, the graph is hard to read -- (about a 40% increase). So, intermittent energy doubles, and natural gas jumps about 40% -- compared to themselves. But compared to each other, a jump of 0.38 TkWhs vs a jump of 0.5 TkWHs is (0.5-0.38 / 0.38 = a 30% increase in natural gas over intermittent energy -- if I'm saying that correctly, and if I'm doing the math correctly -- both big "if's."  But I think the point is made.

Finally, the third graph considers the relative price of alternative/alternate forms of energy. This interests me the least. There are too many factors that impact this. The accountants can manipulate these figures too easily. The graph includes "all building and operating costs over the lifetime of the plants" which is a big, big area to manipulate the data. And then, of course, how does one even begin to factor in the tax creditors and giveaways for intermittent energy? For the archives I will post it, but it doesn't mean a lot to me. I think one can compare solar with wind but that's about it. The cost of geothermal does not matter; it is a niche source of energy, although the northeast (US) may grow it's Canadian geothermal base.