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Natural gas

Introduction

station electricity source, not biopower and

intermittent alternatives such as energy from

combined-cycle

Joseph Stanislaw of Cambridge Energy

sunlight and naturally blowing wind.

generation has a

Research Associates envisions the energy

Can the unconventional energies favored

commanding

company of the 21st century operating under

by the environmental lobby to meet the emis-

two essential assumptions:

sion-reduction targets of the Kyoto Protocol

lead over the

(essentially requiring the United States to

three technologies

·

Oil, gas, and coal are virtually

reduce fossil-fuel emissions by one-third by

unlimited resources to be used in

2012) mature into primary energy sources in

most supported by

any combination.

the next decades or later in the 21st century?

environmentalists.

·

"Supply security" becomes "envi-

Or will such alternatives continue to be sub-

ronmental security." Technology

sidy dependent in mature markets and niche

has made it possible to burn all

or bridge fuels in remote or embryonic mar-

fuels  in  an  environmentally

kets? This study addresses those questions,

acceptable manner.1

The first section examines trends in fossil-

fuel supply and concludes that, contrary to

Although overshadowed by the post-

popular belief, fossil fuels are growing more

Kyoto interest in carbon-free energy sources,

abundant, not scarcer, a trend that is likely to

the technology of fossil-fuel extraction, com-

continue in the foreseeable future.

bustion, and consumption continues to

The second section investigates the "nega-

rapidly improve. Fossil fuels continue to have

tive externalities" of fossil-fuel consumption

a global market share of approximately 85

and finds that they are largely internalized

percent,2 and all economic and environmen-

and becoming more so. Thanks to techno-

tal indicators are positive. Numerous techno-

logical advances and improved practices,

logical advances have made coal, natural gas,

environmental quality has continued to

and petroleum more abundant, more versa-

improve to such an extent that increased fossil-

tile, more reliable, and less polluting than

fuel consumption is no longer incompatible with

ever before, and the technologies are being

ecological improvement. Moreover, America's

transferred from developed to emerging mar-

reliance upon imported oil should not be of

kets. These positive trends can be expected to

major foreign policy or economic concern.

continue in the 21st century.

The third section considers the econom

-

Unconventional energy technologies by

ic competitiveness of non-fossil-fuel alter-

definition are not currently competitive with

natives for electricity generation and finds

conventional energy technologies on a sys-

that a national transition from natural gas,

temic basis. Oil-based transportation holds a

coal, oil, and nuclear power to wind, solar,

substantial advantage over vehicles powered

geothermal, and biomass is simply not con-

by electricity, natural gas, propane, ethanol,

ceivable today or in the near term or

methanol, and other energy exotics in almost

midterm without substantial economic and

all world markets. In the electricity market,

social costs.

natural gas combined-cycle generation has a

The fourth section examines the eco-

commanding lead over the three technolo-

nomic competitiveness of non-fossil-fuel

gies most supported by environmentalists--

alternatives for transportation markets and

wind, solar, and biopower--even after correct-

concludes that rapidly improving gasoline-

ing for the estimated cost of negative exter-

based transportation is far more economi-

nalities.3 Where natural gas is not indige-

cally and socially viable than alternative-

fueled vehicles for the foreseeable future.

nous, liquefied natural gas is becoming a

The fifth section examines America's

substitute fuel of choice. In less developed

failed legacy of government intervention in

nations such as China and India, oil and coal

energy markets and concludes that environ-

often set the economic standard as a central-

2