I'm officially naming the explosion (heh) in natural gas production as the The Big Thing for 2011. Although I was impressed at the time I first heard of it, it continues to create huge side-effects that wil rock our world.
- NG exploration has helped the steel and construction industries.
For example, estimates of Pennsylvania job creation due to increased shale gas production since 2009 range from 44,000 to 72,000. In Bradford County, Pa., the 2009 unemployment rate of 10 percent has been halved because of Marcellus Shale gas development. New York’s economically depressed Southern Tier is also benefiting from gas field development in nearby Pennsylvania. Case in point: RB Robinson Contracting, Inc., a family construction business in Candor, N.Y., had eight full-time employees in 2009. Today, it provides full- and part-time work for 120 people.
Ohio’s steel industry has also felt the economic impact of the revival of shale production. More than 400 workers in Youngstown are constructing a new $650 million steel mill for Vallourec & Mannesmann Holdings, Inc. It will annually produce a half million tons of seamless steel well tubing used in drilling and “fracking” natural gas wells. U.S. Steel is spending $95 million to expand and upgrade its tubular steel mill in Lorain, Ohio, and Timkin is spending $50 million on a similar project at its Canton mill." [More]
- NG is replacing coal and oil (especially in the East)for electricity.
Natural gas will replace coal as the leading fuel for generating electricity in the U.S. by 2025, when it will also become the world's No. 2 overall fuel source thanks to its abundance and a drive for cleaner-burning energy, according to the latest long-term outlook from Exxon Mobil Corp. [More]
Here in the US, NG will become the #1 electricity fuel even sooner: 2019. And while it is not a panacea for carbon emissions, it does have big advantages in transportation, distribution, and its own environmental plusses.
- NG may be pulling the plug on wind farms even with their subsidies. I'm not counting this as a plus, just acknowledging I was wrong about the effect of more NG. I thought peaker plants would help to stabilize the grid with lots of fickle wind turbines and their fluctuating output, but it seems it's easier to just build the NG generators.
General Electric saw a drop in demand for its wind power turbines to around half of its 2009 sales levels as power companies turned to natural gas for cheaper alternative energy forms, the company said on a conference call. GE is the top supplier of wind turbines for some of the nation’s largest wind power farms — huge swathes of land dotted by giant windmills that use the wind to generate anywhere from 1 to 3 megawatts of power per windmill. Each turbine and wind farm typically carries enormous upfront capital costs that can take several years before the power company can recoup its costs. [More]
- NG could spawn more basic chemical production, as it is an excellent feedstock for all kinds of basic chemical needs.
Officials in Appalachian states are hoping the natural-gas boom will attract more than just controversy to their economically struggling region. Pennsylvania, Ohio and West Virginia are offering tax breaks and incentives to "ethane crackers," or the multi-billion dollar plants that start the chain of making ethylene, a basic feedstock for chemical plants, reports Gabriel Nelson of Energy and Environment News.I still am not sure how this will play our for transportation fuel, but this close the the East Coast, where oil is still used for home heating and electricity, replacing both with NG could dampen demand for oil enough to keep gasoline prices lower than might be expected. This is not good news for ethanol, and would seem to cap upside potential to the mandate.
No ethane cracker has been built in the U.S. since 2001 because natural-gas prices were too high, and most production was sent overseas. Since new deposits, such as those in the Marcellus Shale, have been tapped, crackers are now cheaper in the U.S. than anywhere except the Middle East. The U.S. ethane supply has grown by 25 percent over 10 years, and because it's harder to transport than methane, cracking plants must be located close to drilling sites. Nelson reports if ethane supplies stay at current levels, petrochemical companies will spend over $16 billion on pipelines and crackers. [ More]
I'm OK with that possibility, especially since we can't seem to match our predictions for corn production, and it is rapidly becoming clear cellulosic ethanol is a joke.
Like I predicted. [Apologies for shameless, gratuitous self-congratulation, but getting something right happens soooo rarely...]