A Hand Writing on the Wall for Natural Gas

The EIA has a publication, Electric Power Monthly, in which generating data is tracked.  Anyone watching the numbers in chapter 1.1, “Net Generation by Energy Source,” can see the month-by-month development of growth or decline of generating technologies.  For those watching the numbers, it is important to remember that demand is seasonal.  The proper comparison for growth is not one month to the next, but one month to the same month of the previous year, or a longer time frame versus the same time frame of the previous year.

We have seen a steady growth of natural gas generation on this basis for quite a while.  That is what happened, until September of 2016, when there was almost no growth.  But that was the last month in which natural gas generation exceeded what it had been for the same month of the previous year.  Since September 2016, every single month has seen a decline in generation from natural gas, compared to the same month in the previous year.  (Visit this EIA webpage and look near the bottom of the spreadsheet.)

And this is not just a matter of the industry not growing. It has been in consistent decline, month after month.  And, overall, the average growth has been nearly -10%.
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There is another issue that readers should consider.  After a couple of good years of growth in renewable power generation, natural gas generating capacity actually has been growing more robustly, having contributed over 53% of capacity growth this year according to the FERC Energy Infrastructure Update for October 2017.  (Visit this FERC report and go to page 5.)

This may not be good news for natural gas. In fact, it may be quite the reverse. Those natural gas plants were ordered during years of rapid growth in demand for natural gas generation, but they are coming at the very time production from natural gas is declining. This means that the plants are operating at declining capacity factors, making them less profitable to run.

The actual production of natural gas itself is increasing in the US, but this is not because of an increase in domestic use.  The notable increase is in exports.  And this brings us back to GE. The GE layoffs are not in US facilities.  They are overseas.  They are where natural gas produced in the US is increasingly headed.

The news looks grim for the polluters.  It is not just increasingly obvious that their products are killing people and causing climate change, for which they might one day be held accountable.  They are being priced out of the market by far more benign technologies.  A hand appears to be writing on the wall for natural gas.

Read more at A Hand Writing on the Wall for Natural Gas