Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Long-term natural gas supplies should meet growing demand in coming decades, study finds

22.09.2003


Sudden price spikes have led to speculation that the United States is facing a critical shortage of natural gas. But a new study by Stanford University’s Energy Modeling Forum (EMF) concludes that gas supplies are likely to meet growing demand in coming decades, if policy-makers are able to strike a balance between environmental protection and the need for new energy sources.



"Recent volatile natural gas prices do not foreshadow a pending, long-term crisis in future natural gas supplies," said Hillard Huntington, EMF’s executive director and co-author of the study. "Industry will respond with more investment, and demand will respond to higher prices - provided that market participants are given the opportunity."

According to Huntington, the study is unique because it compared the results from seven different expert modeling teams on multiple market scenarios. The results were reviewed and evaluated by a working group of 45 experts from various universities, government agencies and corporations.


Wild prices

In its report, the EMF working group noted that the current uncertainty in the natural gas market is based on wild fluctuations in gas prices during the past three years. For example, the price of gas jumped from about $3 per million British thermal units (Btu) in January 2000 to nearly $8 per million Btu a year later. By January 2002, the price had plunged to about $2, then tripled to more than $6 in January 2003. The price has since dropped to about $5.

"Prices spiked in both 2001 and earlier this year when short-term seasonal bursts in natural gas consumption outstripped the industry’s current capacity to deliver natural gas in the winter months," the authors wrote.

According to the report, future price spikes could be prevented by constructing more gas storage facilities, building up inventories and implementing longer-term contracts. The result would be greater price stability, which in turn would provide much-needed incentives for private investment in new resources and reduce the need for expensive government-subsidized projects.

Balanced policies

In the longer run, the study concluded that direct subsidies for expensive projects are not necessary to maintain investment and supplies. Far more effective would be better integration of energy, environmental and land-use policies to avoid higher future prices.

Natural gas is considered the cleanest fossil fuel, producing nearly 50 percent fewer carbon dioxide emissions than coal. But concerns about the environmental impact of drilling in Western states, along with restrictions on building terminals for imported liquefied natural gas, have limited supplies, according to the EMF study.

"The United States needs to avoid a situation where industry and power plants shift strongly to natural gas for environmental reasons, but where regulations on Western land use and on siting import facilities restrict investment," the authors maintained.

Projected demand and supply

Both companies and the government will need to plan for a range of possible natural gas market outcomes, according to the EMF modeling experts. Total projected consumption could grow by an average of 0.8 to 2.8 percent per year between 2002 and 2020, depending upon market conditions. Higher growth in the economy and electricity demand will increase natural gas consumption and its price. More competitively priced supplies from Canadian and Alaskan frontier areas and liquefied natural gas imports will reduce natural gas prices and also increase consumption. Lower drilling productivity or lower world oil prices will decrease consumption.

Technological advancements in coal, nuclear and other energy sectors could reduce demand for natural gas, the authors wrote. However, the report found that renewable technologies, such as wind and solar power, will have a relatively minor impact on natural gas markets in the next 20 years but could become important alternatives in following decades.

Investments in new natural gas supply resources and technologies play a critical role in these projections, the authors found. Coalbed methane, sandstone reservoirs (known as "tight sands") and other less traditional sources of natural gas will become increasingly important in meeting the demand. International trade also will become more prevalent in U.S. markets, either as liquefied natural gas or as direct imports from Canada.

Price competition

If recent government projections are correct, natural gas prices will remain very competitive with other fuels, the authors said. However, the working group also examined other market conditions, where the prices of other fuels would challenge natural gas in different regions and end-use consumption sectors. When natural gas prices move higher, industrial facilities and powerplants consider coal, oil, renewable energy, and overall energy efficiency.

These demand adjustments are critical for more stable natural gas prices. If environmental policies allow demand to shift away from more expensive natural gas, they will help to limit natural gas price increases.

After removing the effects of inflation, the projected price of natural gas in 2020 could be as low as 58 percent of today’s level or as high as 118 percent, depending upon the model and scenario: "Higher natural gas prices result when oil prices are higher, drilling productivity is lower or economic growth is higher."

The Energy Modeling Forum was established in the Stanford School of Engineering in 1976 to help improve the use of modeling for understanding complicated energy and environmental public policy problems. A list of EMF sponsors is included in the report.


###
CONTACT: Mark Shwartz, News Service: (650) 723-9296, mshwartz@stanford.edu
COMMENT: Hill Huntington, Engineering: (650) 723-1050, hillh@stanford.edu
EDITORS: The study, "Natural Gas, Fuel Diversity and North American Markets," is available on the Web at http://www.stanford.edu/group/EMF/publications/.

Mark Shwartz | EurekAlert!
Further information:
http://www.stanford.edu/group/EMF/publications/.
http://www.eia.doe.gov/
http://www.naturalgas.org/

More articles from Power and Electrical Engineering:

nachricht Producing electricity during flight
20.09.2017 | Albert-Ludwigs-Universität Freiburg im Breisgau

nachricht Solar-to-fuel system recycles CO2 to make ethanol and ethylene
19.09.2017 | DOE/Lawrence Berkeley National Laboratory

All articles from Power and Electrical Engineering >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: The pyrenoid is a carbon-fixing liquid droplet

Plants and algae use the enzyme Rubisco to fix carbon dioxide, removing it from the atmosphere and converting it into biomass. Algae have figured out a way to increase the efficiency of carbon fixation. They gather most of their Rubisco into a ball-shaped microcompartment called the pyrenoid, which they flood with a high local concentration of carbon dioxide. A team of scientists at Princeton University, the Carnegie Institution for Science, Stanford University and the Max Plank Institute of Biochemistry have unravelled the mysteries of how the pyrenoid is assembled. These insights can help to engineer crops that remove more carbon dioxide from the atmosphere while producing more food.

A warming planet

Im Focus: Highly precise wiring in the Cerebral Cortex

Our brains house extremely complex neuronal circuits, whose detailed structures are still largely unknown. This is especially true for the so-called cerebral cortex of mammals, where among other things vision, thoughts or spatial orientation are being computed. Here the rules by which nerve cells are connected to each other are only partly understood. A team of scientists around Moritz Helmstaedter at the Frankfiurt Max Planck Institute for Brain Research and Helene Schmidt (Humboldt University in Berlin) have now discovered a surprisingly precise nerve cell connectivity pattern in the part of the cerebral cortex that is responsible for orienting the individual animal or human in space.

The researchers report online in Nature (Schmidt et al., 2017. Axonal synapse sorting in medial entorhinal cortex, DOI: 10.1038/nature24005) that synapses in...

Im Focus: Tiny lasers from a gallery of whispers

New technique promises tunable laser devices

Whispering gallery mode (WGM) resonators are used to make tiny micro-lasers, sensors, switches, routers and other devices. These tiny structures rely on a...

Im Focus: Ultrafast snapshots of relaxing electrons in solids

Using ultrafast flashes of laser and x-ray radiation, scientists at the Max Planck Institute of Quantum Optics (Garching, Germany) took snapshots of the briefest electron motion inside a solid material to date. The electron motion lasted only 750 billionths of the billionth of a second before it fainted, setting a new record of human capability to capture ultrafast processes inside solids!

When x-rays shine onto solid materials or large molecules, an electron is pushed away from its original place near the nucleus of the atom, leaving a hole...

Im Focus: Quantum Sensors Decipher Magnetic Ordering in a New Semiconducting Material

For the first time, physicists have successfully imaged spiral magnetic ordering in a multiferroic material. These materials are considered highly promising candidates for future data storage media. The researchers were able to prove their findings using unique quantum sensors that were developed at Basel University and that can analyze electromagnetic fields on the nanometer scale. The results – obtained by scientists from the University of Basel’s Department of Physics, the Swiss Nanoscience Institute, the University of Montpellier and several laboratories from University Paris-Saclay – were recently published in the journal Nature.

Multiferroics are materials that simultaneously react to electric and magnetic fields. These two properties are rarely found together, and their combined...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

“Lasers in Composites Symposium” in Aachen – from Science to Application

19.09.2017 | Event News

I-ESA 2018 – Call for Papers

12.09.2017 | Event News

EMBO at Basel Life, a new conference on current and emerging life science research

06.09.2017 | Event News

 
Latest News

Rainbow colors reveal cell history: Uncovering β-cell heterogeneity

22.09.2017 | Life Sciences

Penn first in world to treat patient with new radiation technology

22.09.2017 | Medical Engineering

Calculating quietness

22.09.2017 | Physics and Astronomy

VideoLinks
B2B-VideoLinks
More VideoLinks >>>