Most Likely Fossil Fuel Future

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Which scenario or scenarios are most likely? Which is least likely? https://www.bloomberg.com/news/articles/2018-04-10/coal-dead-peak-oil-demand-five-takes-on-fossil-fuels-future

  • Oil and gas will remain key roles even post-Paris agreement.
  • Coal will survive
  • Coal death spirals as plants duke it out over stagnate demand & falling prices
  • LNG demand will continue to boom
  • Nuclear power will live to fight another day, with smaller more agile reactors

 

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I think they are all likely, minus the death of coal. It might die in the West, but elsewhere it's still got a long life to live out of necessity. 

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Nuclear power will live on, yes. Just ask France about it. And yeah, I think oil and gas, LNG included, have a good 50 years in them yet.

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Hmm. I think the least likely is that nuclear will live on--at least in the US, no one is interested in nuclear power. 2nd least likely is that coal with death spiral.

LNG demand will boom, yes. Oil is surely not dead, nor is it on its deathbed. The market will keep coal alive, in certain markets at least. 

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Most likely: LNG demand will continue to boom. Just look at Australia and the US's expansion plans. It's greener than oil, and unlike renewables, it's doable right now.

Least likely: coal dies. Many nations are completely reliant on coal. It may not hang around forever, but this is not ready to die in the near future.

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That coal will survive is unlikely. No one wants it. Some will be slow to adopt something other than coal, but coal will surely die a quick death, and soon. It will die in the US soon.

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Coal definitely has the weakest chances, at least in the long run. Others on the list are all likely.

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I disagree. Even we don't like coal it will stay among us for a long time. Maybe not everywhere but there'll be always need for it in some countries. We'll see all listed above in the future. 

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I don't see how LNG demand can continue to grow long term. The cost of pairing wind and solar to battery storage will become incredibly competitive within LNG import markets. When stored renewables achieve a blended cost below say $50/MWh in an import market, why would they continue to grow demand for LNG above say $6/mmBtu, which implies a fuel only cost of about  $48/MWh for generation from LNG?

So basically as the price of renewables plus storage fall, LNG will get priced out of import markets for power generation. Or the price would have to go so low that LNG producers fail to make money. Of course, there is demand for gas outside of power markets, but the transition forcing gas out of power markets will put a serious drag on demand growth. 

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18 hours ago, JHM said:

I don't see how LNG demand can continue to grow long term. The cost of pairing wind and solar to battery storage will become incredibly competitive within LNG import markets. When stored renewables achieve a blended cost below say $50/MWh in an import market, why would they continue to grow demand for LNG above say $6/mmBtu, which implies a fuel only cost of about  $48/MWh for generation from LNG?

So basically as the price of renewables plus storage fall, LNG will get priced out of import markets for power generation. Or the price would have to go so low that LNG producers fail to make money. Of course, there is demand for gas outside of power markets, but the transition forcing gas out of power markets will put a serious drag on demand growth. 

I guess it depends on your definition of long-term. When renewable costs are low enough, and there is sufficient capacity, LNG demand could wane. The less expensive and more available option will always win out, barring infrastructure problems.

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My vision of the future :

 

Coal will decline faster than expected. western countries will phase out coal to fight climate change  and emerging countries will phase out coal to fight air pollution . Renewables will soon be a more competitive solution. (Look what is happeing in India and China the main coal users.)

Nuclear power will decline as old nuclear plants are phased out and won't be replaced by new one, the new power plants being to expensive to compete with renewables and gas. Nuclear energy will only survive in some countries (those that produce or want to produce nukes).

Oil will continue to grow for some years but the EV revolution will erode its market share in transportation.  Oil demand will peak and then decline as the shift to electric vehicles will be massive and faster than forecasted.

LNG will grow and resist better than the other fossil fuels. But it will have to face an increasing competition from hydrogen and "green methane" that can be produced locally with renewables and don't need an expensive infrastructure (liquefaction plants, ships...)

 

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LNG is still not really cost compepetive with russian or norwegian pipe gas especially in Europe because of high cost of trasportation/regasification - about 4 $ per mbbtu at least .

Secondly lowest cost of gas production has Iran (less than 1 $/mbbtu) Russia (about 1 $). US shale gas has cost of production about 2,5 $ per mbbtu - on some fields a little bit lower  but on some of them about 3 $ per mbbtu or even higher.

 

It mean for Cheniere

cost on Henry Hub - lets say 3 $

typical additional fee for Cheniere - 15 % of that - 0,5 $

Cost of delivering gas to Europe - 4 $

Cost of delivering gas to US gasport + transport in Europe - let's say 0,5 $

 

It mean final minimal price of US LNG in Europe  about 8 $ per mbbtu - 288 $/1000 m3

 

Cost of russian gas to Europe according to World Bank 2017 5,65 $, 2018 6,50 $ 2019 6,50 $

 

Because of this I mean LNG is not cost compepetive to Russian gas.

Edited by Tomasz

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Natural gas is good for at least 100 years not including biogas and methane hydrates. It is also the least expensive and most environmentally sound solution. If you don't know about biogas and methane hydrates you can find the information on Wikipedia etc. 

I have thousands of live links on energy at https://docs.google.com/document/d/1ipd1YlcDaA_E9QtLhUXJBPiobFcRx1Rgipny9rOPJZE/edit  Scroll down past the flag. 

 

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