Above, interview with David Fickling, shedding some light on what the world is learning from the current shutdown of 20 percent of the world’s Liquified Natural Gas exports, a good part of which was destined for China.
Fickling points out that the vision of gas as the “bridge fuel” to renewable energy and nuclear power is flawed, due to the now-demonstrable vulnerability.
I’ve been following this narrative, as a lot of power players are following events to gauge the wisdom of future long term gas contracts. “Long Term” is a relative idea for gas, because it is historically volatile, and not usually contracted in more than 5 year blocks – as opposed to solar and wind, where the fuel cost is reliably stable (zero) in perpetuity.
A number of signs, some documented by recent posts on this page, indicate that the brave new world of LNG envisioned by grifting fracking millionaire and Secretary of Energy Chris Wright, may be bottled up in, or even sunk to the bottom of, the Strait of Hormuz.
Gas boilers, electric heaters, heat pumps, and the now-banned coal all have different costs and benefits. Installation expenses are highest for heat pumps and gas boilers, lowest for electric heaters, and free for anyone feeding their old domestic stove with firewood or illegal coal. Fuel costs are highest for gas and electric heaters, lower for coal, and lowest of all for heat pumps.
The mistake in Hebei was treating gas as a cheap option. Upfront costs for heat pumps are only about 20% higher than for gas boilers. For a local government being ordered to subsidize the installation of millions of the devices, however, that can quickly add up. As a result, many opted for gas instead.
Operating costs, meanwhile, get paid by households, and that’s where the benefits of clean power really show up. You can get a million British thermal units of heat output, roughly enough to warm a small home for two days, for about $5 of electricity if using a heat pump, compared to $10 using coal and $15 for gas.1 That’s not even counting the health benefits to households from reduced pollution and living in less icy homes, let alone the climate cost.
That’s particularly the case where energy is involved. An initial rush to install heat pumps in Europe and the UK, after the Ukraine war cut off Russian gas supplies, has stalled, That’s thanks in part to short-sighted regulation that makes boilers cheaper to run, despite being less efficient. (Domestic gas doesn’t pay for its carbon emissions, even though renewable-powered electricity typically incorporates a carbon price because of the structure of the power market.)
Rather than work to fix this, leaders have treated it as a license to start backtracking on all manner of green policies. The US retreat from clean power has been even more violent, and every bit as ruinous to America’s hopes to remain at the technological frontier.
By counting on gas as a bridge between coal and renewables, policymakers have raised costs on individuals and discredited the very idea of transitioning to clean power — in China and elsewhere. The conflict in the Middle East is revealing again what a shaky bridge that is. It’s time to discard it for good.
Of course the major advantage of gas over coal to heat people’s homes (and possibly the only one) is that the combustion products of gas—which are still bad—are not nearly as unhealthy as the PM2.5 and other particulates and poisons that come from burning coal.