Sunday, September 19, 2021

It's all connected: The natural gas market and its casualties

Natural gas was supposed to be the so-called bridge fuel to the low-carbon renewable energy economy. It was abundant, cleaner to burn than oil and coal, and more and more available to anyone who wanted it as a global market in liquefied natural gas (LNG) blossomed and boomed.

But this season it is looking increasingly like that metaphorical natural gas bridge is going to come up short. And, the effects are starting to ripple throughout the economy, not only in the natural gas markets themselves, but also in the electricity and agricultural markets.

First, there are the obvious signs in the natural gas market. In both North America and Europe natural gas prices have bounded upward. In Europe gas import prices have zoomed up more than 400 percent in the last year from $2.86 per million BTUs (MMBtu) to $15.49 per MMBtu. (A million BTUs is roughly equivalent to the U.S. measure of a thousand cubic feet or mcf.)

Sunday, September 12, 2021

Taking a short break - no post this week

I'm taking a short break this week and expect to post again on Sunday, September 19.

Sunday, September 05, 2021

A moving target: Hardening our infrastructure against climate change

As fires continue to rage in the American West, as swaths of Louisiana including New Orleans remain without electricity as a result of Hurricane Ida, and as flood damage resulting from the remnants of that hurricane continue to dog New York City and the Northeast, we are already hearing calls for "hardening" our infrastructure. Hardening means making our infrastructure more resilient in the face of disaster, both natural and man-made. That supposedly means making our electrical grid more resistant to wind, improving drainage and sewer systems to prevent flooding, and upgrading roads and bridges to prevent them from washing away.

While hardening infrastructure seems like a good idea, there are two major obstacles. One is obvious: It is much easier to harden infrastructure when building it from scratch. Upgrading any piece of existing infrastructure means working within the limitations of that infrastructure and replacing and adding parts in ways that are less expensive but also less ideal than rebuilding. While some of Louisiana's electrical grid might be rebuilt from scratch, very little electrical infrastructure elsewhere will be rebuilt since upgrading will be far less expensive. The same holds true for water and transportation infrastructure.

The second obstacle may not be so obvious: Climate, the primary reason for hardening, is a moving target. The planet has not simply reached a new stable state. Rather, climate change itself is changing, that is, it is getting worse over time. First, the rate of human-caused emissions of climate destabilizing carbon dioxide, the main greenhouse gas, continues to rise. We are adding more carbon dioxide every day at ever higher rates. Second, that trend has resulted in continuously rising concentrations of carbon dioxide in the atmosphere. Third, there is