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The natural gas futures

Massachusetts Institute of Technology (MIT) has published a report on the future of natural gas as an energy source in the same line that has already released reports on nuclear power, coal and photovoltaics. You can download it here .

As the topic of energy is a favorite of this blog, and we've spent some s recent entries confrontation natural gas - renewable, I will summarize what I find most striking about the report or relevant .

natural gas as an energy source "bridge" to a low carbon economy

The authors focus their estimates in 2050, and consider natural gas as a source of energy bridge to a low carbon world. This World "low carbon" will consist of renewable, nuclear and fossil gas and coal, but the latter equipped with technologies of "carbon capture and storage (CCS)

This is striking because many feel that the energy" bridge "would have to be nuclear, ruling out in advance gas because fossil energy. The MIT report makes clear that this view is not realistic, given the maturity of technology-based power generation and availability of gas reserves, which classifies as sufficient for the present century.

The importance of natural gas, according to the report of MIT, is expected reduce emissions of CO 2 significantly, but as long as massively replacing the most inefficient coal plants by Combined Cycle Gas. More specifically, the report says that natural gas will replace hard coal in electricity generation in 2050, provided that emissions of CO 2 are priced enough to accomplish the following:

• countries Industrialized reduced by 50% by 2050
• developing countries to reduce it by 50% by 2070

also assumes price reductions options: renewables, nuclear and CCS (the latter technologies, by the way, are being incipient and still is far from clear their economic viability and even technology in some cases).

Reservations

On the issue of reservations, the report attaches great importance to gas "unconventional", whose reserves, just harvested, is estimated higher than conventional ( tight gas, coal bed methane, gas shales ) or much higher (carbohydrates). About hydrates are large uncertainties regarding technology exploitation, but not on earlier. The report focuses enough on gas shales (associated with rocks), the main environmental problem is exploitation. For MIT, however, environmental problems related to unconventional gas (mainly pollution of surface and groundwater) are "manageable, but challenging."

Interaction with renewable power generation

The report warns that the introduction of much intermittent renewable generation could have an undesirable effect in the short term : to reduce gas generation could force the boot "on base" for central coal, and thus undermine, paradoxically, the CO 2 .

On the problem of intermittency of renewables and in alertábamos this entry, and its effects on gas stations also are discussed in this other . This risk is even greater (this is what I say, not the report of MIT) in systems that are committed to the basic nuclear energy , as seems the case in our country (at least judging by the statements by some, because then the reality is stubborn ...).

In the long run, however, the report's authors predict a world in which the get to be renewable "energy base" , in which case the gas serve to modulate demand, ie serve as support for renewable peaks, running in short periods of time . This requires regulatory structures that ensure the reliability of the system and install the necessary gas capacity, ie to ensure the profitability of the gas stations though they have a running time.

As we said in our posts linked above, this problem is already happening here and now, although renewable energy is not based on the English system (it is, still, nuclear, hydro and water in good years), enter the pool almost as if they were, it is preferential entry standard, which moves gas combined cycle to work only a few hours to cover the intermittency of renewables, becoming unprofitable to plants that were built to work many more hours. That is the problem that MIT wants to see resolved in the longer term, through regulatory measures.
also in other countries without sufficient nuclear generation, this problem can cause the entry of coal plants to meet basic demand, producing the opposite effect, as well alert MIT.

Transportation

One thing I particularly striking is the limited role the report gives the natural gas in the transport sector . Although among the measures recommended to advise governments remove administrative obstacles to the use of gas in transport, in fact almost dismiss it as a global solution for transportation, citing the high cost of converting cars to enable them to consume gas.

say that catches my attention because, although I had always considered this alternative as "low resolution" until now had never read an opinion as qualified as the almost-discarded clearly. Do not forget that transportation is the great workhorse of the use of petroleum, a problem not solved, and it passes gas might also be a "bridge" to a private world of electric vehicles, for example. Given that technology is known and long used in many countries (Argentina, India ...) its widespread implementation would never be as expensive or difficult as the mass deployment of electric vehicles.

However, despite possibly much against the minimal reduction of CO 2 that occurs in the substitution of liquid fuels by natural gas in vehicles, only 25%, much less than when you replace coal with natural gas in a power plant .. . why I say that if the goal is a low-carbon world, this solution is "a little solution." Although countries have implemented and will continue to upgrade it.

supply and geopolitical

It is important to comment need to change the operation of global natural gas market, mainly to make it clear liquid.

who does not know much about may not give you an idea of \u200b\u200bthe importance of this point, and the enormous differences between the market oil and gas. Try to summarize a bit:

The oil market is very liquid, there are many boats sailing around the world crude oil at all times, which often change hands several times based on interests and needs of buyers and sellers. The international prices of crude and products are known and are open to consultation for the whole world. It is true that many mysteries remain, like how much oil is left and who has it, and especially how conforms the price and who and how it affects him at all times (say, mid-long term, the trend in prices is explained well enough mediente curve supply and demand. In short, however, myriads of small variables and decisions affecting the variability, which is very similar to random motion). But for anyone who needs to buy or sell crude oil or products, rules of operation of the market are reasonably clear for everyone: Any operator can buy a boat of crude, or resell send anywhere as it nears its destination, and agree on the price of the transaction: there is a market spot sufficiently developed.

In natural gas, however, this is not true. Understand that natural gas historically was considered a byproduct of oil without economic value, and burned at the wellhead without any use. According to many countries began to use natural gas, he began to assign economic value, but to make it effective it was necessary that the site was near the demand, because a pipeline is very expensive and the technology to liquefy and transport natural gas in boats were still emerging. Were imposed in this environment, supply contracts closed long-term relationship between a producer and a buyer of gas, which would allow recovery the cost of developing the transport infrastructure to the point of consumption, often with clauses "take or pay" whereby the buyer pays what he was going to consume, consume it or not.

is, therefore, a contract market closed, where there is hardly the spot market. Gradually, as they develop the LNG (liquefied natural gas) as the distances do not allow the construction of pipelines, and proliferate in our oceans LNG vessels, is expected to start generating a spot market similar to the oil, with daily prices open to everyone and no "hidden" in private contracts.

For natural gas have the weight it deserves as an energy source for global use, of course MIT considers this necessary, as well as to recommend that this objective is part of the agenda of foreign affairs U.S. government ... which, if we review recent developments and switched to Obama from Bush and the oil and gas, is not very reassuring ...

industrial policy

Finally, the report makes recommendations relating to "industrial policy" that it is worth noting as they also are burning in our country and in many others.

While on the one hand encourage encourage through tax incentives, subsidies or regulation setting it up source of energy to replace coal, warn of the danger of these policies if not measured very well. Summarizing much, ideas would be two:

• not favor one energy source which in turn measures harm to another, especially if both pursue similar goals in terms of efficiency and emission reduction.
• implement a "cost of CO 2 " for all, and that each hold your candle stick ... and no long-term subsidy.

Simple, right?