Abundant Natural Gas Changes Everything
[I]t is ironic also that cheap gas will completely remove the need for electricity generated by solar or wind -- much to the chagrin of environmental zealots. And all those folks hoping that energy prices would continue to rise and that electricity costs would "skyrocket" will be sorely disappointed.
But there are also extra bonus points. "Combined-cycle" gas power plants can reach efficiencies of 60% or more, compared to heat efficiencies of nuclear power plants of 35% or coal plants of 40%.
It gets even better than that. Gas-fired electricity generation is essentially non-polluting and user-friendly, and it can be placed in close proximity to wherever power is needed, making distributed generation economically feasible. For example, a large apartment building of 1,000 units could use its own 10-megawatt power plant. But once installed, it becomes possible to consider co-generation, with the waste heat used for space heating, air-conditioning, hot water, laundry, and other process-heat applications -- and even desalination. One can imagine energy efficiencies of as much as 80%, more than double what is achieved today. It would also simplify the problem of waste-heat disposal.
Cheap gas will encourage the petrochemical industry to invest $30 billion in new U.S. plants over the next five years, according to Chevron-Phillips Chemical Co. Plastics producers will get a double-boost -- from cheaper feedstock gas, the raw material for their product, and lower electricity costs. When natural gas becomes really cheap -- say, less than $2 per mcf (million cubic feet) -- it will become more like nuclear energy, where the main cost is not fuel, but the capital cost of the power plant.