Natural Gas Harms US Economy And Won’t Solve Rising Electricity Demand

Remember the era of cheap natural gas

Yea, that world is gone

Utilities and companies may be clamoring to build new gas-fired power plants to meet rising energy demand, but no matter how much they envision gas as a solution, there’s no escaping gas’s expensive, bad-for-the-climate reality

Anyone harboring the illusion of low-cost gas is operating as if it’s still 2015. “I think people have in their minds that gas is a cheap way to generate power”, said Rich Powell, CEO of trade group the Clean Energy Buyers Association. “New build natural gas is not a cheap way to generate electricity. ” Today, gas’s economics are facing pressure on two fronts: Supply chain bottlenecks and workforce shortages have made it nearly impossible to source equipment for new gas-fired power plants in the near to medium term while also raising the costs of those plants

And gas as a fuel is becoming more expensive as global demand for liquified natural gas intensifies and the United States exports more of the fossil fuel instead of keeping it within our borders to meet American demand

The shale revolution did usher in an era of cheap gas that reshaped the U

However, in recent years, new natural gas plants have constituted a small of new capacity additions to the overall U

That’s largely because for more than half a decade, renewables have been the cheapest sources of new electricity

Canary Media A gas buildout would look different this time The big surge of new U

It turns out building gas plants is a use-it-or-lose-it skill

Gas turbine manufacturers such as GE Vernova and Siemens Energy scaled back their duction capabilities to meet lower demand, and output can’t be increased overnight

As a result, new gas turbine orders face a wait time of five to seven years before they can be dered to utilities

Energy Information Administration “Gas turbines were dead in 2022,” Siemens Energy North America President Rich Voorberg said at a recent conference, noting the company had been down to one customer

Because of these factors, not only will it take years to build more natural gas-fired power plants, they’ll also be more expensive this time around

Others agree. "We did a quote and to do the same kind of unit that had been built a few years back it would be two and a half times more today," Paul Sotkiewicz, president and founder of consultant E-Cubed Policy Associates

He’s not alone in this sentiment. "We are seeing substantial increases in the estimates for new builds, including everything from the cost of engineering, curement and construction to the cost of equipment and materials," said Bobby Noble, senior gram manager for Gas Turbine Re and Development at EPRI

The fuel to run gas plants costs more too Then there’s the other side of the coin—not only will it cost much more to build a natural gas plant in today’s world, but the fuel that plant will burn is becoming significantly more expensive

Increased natural gas demand from growing liquified natural gas exports is a primary driver for these cost increases, according to the EIA

And when demand goes up, so does the price. “It is not how both the AI and LNG export boom, both of which need digious volumes of gas, can succeed without voking price spikes,” Gas Outlook recently reported. “The explosion of (LNG) exports has up domestic energy

And has exposed American energy to increased price volatility and episodes of sharply higher prices,” said Tyson Slocum, director of Public Citizen’s energy gram

CAMERON LOUISIANA - JUNE 7: A large liquified natural gas transport ship sits docked in the

Electricity demand will increase in the coming years, although exactly what the rate of growth will be remains an open question

But relying on natural gas to fill the gap over at least the next five years appears to be both a foolhardy and highly expensive gamble

Instead, we should be increasing the pace of wind, solar, and storage buildout, as these nologies are currently the fastest, most affordable ways to add more power to the grid

Unfortunately, Congress just built a giant roadblock for clean energy

The new One Big Beautiful Bill Act repeals renewable energy incentives and puts in place overly complicated supply chain constraints, killing many of the domestic clean energy jects that had been jected to come online over the next few years

That will increase wholesale electricity costs by 74% over the next decade, according to Energy Innovation analysis

Thus, we face a scenario where we need more power quickly, can’t get the materials or staff needed to build new gas plants that would be wildly expensive anyway, and we’re taking big chunks of fast, cheap clean energy off the table

That’s a great blue for losing the AI race and making America expensive again.