How Much Natural Gas to Replace Gasoline?

I Took This Picture of a CNG Bus on a Recent Trip to D.C.

You may have seen the news this week that a report by the Potential Gas Committee says natural gas reserves in 2008 rose to 2,074 trillion cubic feet. The New York Times and the Wall Street Journal (via Rigzone) both had stories on it, and T. Boone Pickens issued a press release. First, from the New York Times (and this is a really good article):

Estimate Places Natural Gas Reserves 35% Higher

Thanks to new drilling technologies that are unlocking substantial amounts of natural gas from shale rocks, the nation’s estimated gas reserves have surged by 35 percent, according to a study due for release on Thursday.

Estimated natural gas reserves rose to 2,074 trillion cubic feet in 2008, from 1,532 trillion cubic feet in 2006, when the last report was issued. This includes the proven reserves compiled by the Energy Department of 237 trillion cubic feet, as well as the sum of the nation’s probable, possible and speculative reserves.

The new estimates show “an exceptionally strong and optimistic gas supply picture for the nation,” according to a summary of the report, which is issued every two years by a group of academics and industry experts that is supported by the Colorado School of Mines.

The Wall Street Journal wrote:

US Has Almost 100-Year Supply of Natural Gas

The amount of natural gas available for production in the United States has soared 58% in the past four years, driven by a drilling boom and the discovery of huge new gas fields in Texas, Louisiana and Pennsylvania, a new study says.

…the Potential Gas Committee’s study was prepared by industry geologists who analyzed individual gas fields using seismic imagery and production data provided by gas producers. The surge in gas resources is the result of a five-year-long drilling boom spurred by high natural-gas prices, easy credit and new technologies that allowed companies to produce gas from a dense kind of rock known as shale. The first big shale formation to be discovered, the Barnett Shale near Fort Worth, Texas, is now the country’s top-producing gas field, and companies have made other huge discoveries in Arkansas, Louisiana and Pennsylvania. Together, the shale fields account for roughly a third of U.S. gas resources, according to the Potential Gas Committee.

Pickens had this to say:

T. Boone Pickens Statement on Surge in Estimated Natural Gas Reserves

Today’s report substantiates what I’ve been saying for years: there’s plenty of natural gas in the U.S. I launched the Pickens Plan a year ago to help reduce our dangerous dependence on foreign oil, and using our abundant supply of natural gas as a transition fuel for fleet vehicles and heavy-duty trucks is a key element of that plan. On the same day this report is going out, diesel prices are again on the rise, squeezing the trucking industry. Now more than ever we need to take action to enact energy reform that will immediately reduce oil imports.

The 2,074 trillion cubic feet of domestic natural gas reserves cited in the study is the equivalent of nearly 350 billion barrels of oil, about the same as Saudi Arabia’s oil reserves.

A number of people have rightly pointed out that a 100-year supply implies usage at current rates. But it got me to thinking about how much natural gas it would take to displace all U.S. gasoline consumption. So in the spirit of my previous essay Replacing Gasoline with Solar Power, I will do the same calculation for replacing gasoline with natural gas. The big difference between this calculation and the earlier one is that solar power still has some technical issues to resolve (e.g., storage) and electric vehicles are not yet ready for prime time. On the other hand we are perfectly capable, today, of displacing large numbers of gasoline-fueled vehicles with natural gas.

How Much Do We Need?

The U.S. currently consumes 390 million gallons of gasoline per day. (Source: EIA). A gallon of gasoline contains about 115,000 BTUs. (Source: EPA). The energy content of this much gasoline is equivalent to 45 trillion BTUs per day. The energy content of natural gas is about 1,000 BTUs per standard cubic foot (scf). Therefore, to replace all gasoline consumption would require 45 billion scf per day, or 16.4 trillion scf per year. Current U.S. natural gas consumption is 23 trillion scf per year (Source: EIA). Therefore, replacing all gasoline consumption with natural gas would require a total usage of 39.4 trillion scf per year, an increase in natural gas consumption of 71% over present usage.

Assuming for the sake of argument that the 2,074 trillion standard cubic feet cited in the study is accurate, that the “probable, possible and speculative reserves” eventually equate to actual reserves, and that the gas is economically recoverable, that is enough gas for 53 years of combined current natural gas consumption and gasoline consumption. If you assume that only the proven plus probable reserves are eventually recovered, the amount drops to about 1/3rd of the 2,074 trillion scf estimate, still enough to satisfy current natural gas consumption and replace all gasoline consumption for almost 20 years.

We can also calculate in terms of oil imports. Right now the U.S. imports about 13 million barrels per day of all petroleum products. A barrel of oil contains around 5.8 million BTUs, but oil only makes up 10 million of the 13 million barrel per day figure. Other imports include things like gasoline (4.8 million BTUs/bbl) and ethanol (3.2 million BTUs/bbl). Scanning the list of imports, I probably won’t be too far off the mark to presume that the average BTU value of those 13 million bpd of imports is about 5.4 million BTUs/bbl. On an annual basis, this equates to 25.6 trillion scf of natural gas, which would be an increase over current natural gas usage of 111%. Going back to the 2,074 trillion scf from the study, this would be enough to displace imports of all petroleum products (again, at current usage rates and not factoring in declining U.S. oil production) for 43 years.

What’s the Cost?

Natural gas is presently trading at about $4 per million (MM) BTU (although December 2009 is trading at almost $6). Oil is presently trading at $71/bbl, which equates to $12.24/MMBTU. Gasoline is presently trading at over $17/MMBTU. Thus, natural gas is a bargain relative to oil or gasoline. Incidentally, I just checked on seasoned wood and wood pellets, and they range from $8-$12/MMBTUs. So it is cheaper to heat your house with gas than with wood. I am not sure I would have guessed that.

While natural gas is a bargain relative to gasoline, converting a gasoline-powered vehicle to natural gas isn’t cheap. According to this source, it can cost $12,500 to $22,500 to convert a gasoline-powered car to natural gas. Honda makes a compressed natural gas (CNG) vehicle, but according to this review in Car and Driver the premium over the gasoline version is $8780. A person would need to drive an awful lot to justify that premium. However, that’s what fleets do. They drive a lot. The large price differential explains why fleets would be interested in running their vehicles on natural gas.


So, the good news is that the United States could be energy independent if the newly released natural gas reserve numbers are remotely accurate. It also appears that we have enough natural gas available that civilization isn’t going to end any time soon due to lack of energy supplies. There are three caveats. First, energy independence via natural gas could require us to spend significantly more for personal automotive transportation. Second, “possible” reserves may never materialize. Finally, a large chunk of the calculated reserves are based on shale gas, and that requires gas to be in the $6-$8/million BTU range to be economical. Still, it is a bargain compared to gasoline, and it explains why fleets are more receptive to conversion to natural gas than the general public is likely to be for their personal vehicles.

64 thoughts on “How Much Natural Gas to Replace Gasoline?”

  1. One question – We know from studying liquid fuels tha btus are only part of the equation when it comes to powering a vehicle.

    BTUs are pretty much the whole story if all you want to do is boil water, but if you have to "push" a piston, burning characteristics are equally important.

    We've heard stories about how truckers weren't too crazy about nat gas because of "lower horsepower." Is that correct, and, if it is, how much larger engine will be needed to power the standard 18 wheeler?

  2. Just wondering out loud but could we use GTL technology to convert the natural gas to liquid fuels that could be use in our existing cars? That way you wouldn't need to change all the vehicles but you would need to possibly build a lot of GTL plants.

  3. I knew if I badgered RR long enough, he would turn his sizable mental skills on natural gas with excellent result. And he has.
    Friends, this is nearly unalloyed good news. God looks after drunks, fools and the United States. Now, we have shale gas up the rear, and getting more gassy all the time.
    I never bought into doomer arguments anyway. Man is innovative, and in the Western world, endowed with capital and relative freedom. The transfer of knowledge is incredibly rapid know, girdling the globe in seconds.
    But now, with shale gas, doomer arguments look like so much sniveling.
    No, NG is not a panacea. CNG cars have less range. It won't be cheap, only cheaper. It will be plentiful.
    It ain't like filling up a V-8 with 25-cent-gas.
    But you get to put money in the pockets of guys drilling for gas in Pennsylvania and Louisiana states, instead of thug states.
    Yes, some truckers won't like it–they can stay with gasoline/diesel, but they may pay a premium at some point. I suspect liquid fuels will become a "luxury" fuel at some point, for use in airplanes and other must situations. That day may still be 50 years off.
    There is a good world ahead of us, if we just try to be productive and sensible.

  4. Man is innovative, and in the Western world, endowed with capital and relative freedom.
    Unfortunately, in the Western world, that appears to be changing, and not in a good way.

    But, you're right (Benny), our society won't collapse for lack of resources. Lack of political leadership? Now that's a different matter…

  5. Benny, I agree with you, completely, as to the silliness of the doomers. That place they inhabit must be a horrid, dark place. We "Need" Saudi Arabia, and the magic carpet bombers like a bad case of STDs.

    I'm, also, despite my above question, with you on nat gas for buses, fleet vehicles, and truck, and cars wherever possible, or practical.

    I would MUCH rather see Mack Trucks burning Louisiana nat gas, than Jihadi oil.

  6. Optimist-
    It is easy to be pessimistic about man, especially when we decide pogroms are a good idea, or that shooting at each other makes sense.
    Still, we have seen far worse leadership than Obama, and even Obama will pass from the stage before we know it.
    I remember only 10 years ago, we were a confident nation. Maybe in 10 years we will be again.
    And as bad as a Bush or Obama may be, they are not bad like Putin or Chavez. They do not limit free speech, they do not try to monopolize whole segments of the economy on behalf of cronies. Neither President preached hate. We will survive even serious mediocrity.
    The science, the innovation, the venture capitalists–they won't go away. The VC community is very robust today, much larger than 25 years ago. The Internet speeds knowledge around like lightening.
    And look at this: Somebody took a chance, figured it out, and hit shale gas, otherworldly amounts of it.
    The doom scenario, once implausible, is now out-loud laughable.
    Have a beer on me! I am in that good of a mood.

  7. Rufus-
    I have enjoyed your robust defense of your viewpoints, and I deeply admire the innovation of the ethanol crowd. I see a bright future ahead, thanks to innovative people willing to be productive. That's real citizenship.

  8. RR — that's pretty much the same calculation on gas demand we had about 15 years ago. The US could definitely run for a while on natural gas, but read the fine print:

    "Estimated natural gas reserves rose to 2,074 trillion cubic feet … This includes the proven reserves compiled by the Energy Department of 237 trillion cubic feet, as well as the sum of the nation’s probable, possible and speculative reserves."

    While there is undoubtedly a lot of gas around, not much better than 10% of that big number is stuff you could take to the bank. Caveat emptor.

    Some other points — it is inefficient to buy a gasoline vehicle and convert it to natural gas. Costs extra, and provides an unsatisfactory vehicle. Even commercially-produced NGVs tend to be vehicles which are built for gasoline, then taken off the end of the assembly line & converted to NGVs.

    Much better to build dedicated Natural Gas Vehicles from the ground up — cost would be very comparable to a gasoline vehicle if built on a large scale, and vehicle performance would be similar too.

    But it can take 10-20 years to turn over the vehicle parc. This would be a long term venture.

    And let's not underestimate the costs & difficulties of rebuilding the entire retail distribution network to support the changeover to NGVs.

    Looked at purely rationally, the smart approach would be to help currently under-vehicled nations (e.g China, India) to expand their transportation system using NGVs and natural gas filling stations from the get go. Takes those countries out of future competition with the West for oil, and avoids the huge cost of throwing away the massive investment the West has in gasoline. Think of this in the same light as the West buying carbon offsets from the Third World, except that it actually makes sense.

    Most rational of all would be to persuade populous oil exporting countries with indigenous gas to build NGV manufacturing plants, use their own gas to fuel their own NGVs, and keep exporting oil to the countries that already have lots invested in a gasoline infrastructure. Countries like … Iran & Iraq.

    You can begin to see why that venture I was involved in 15 years ago died!

  9. “I launched the Pickens Plan a year ago to help reduce our dangerous dependence on foreign oil, and using our abundant supply of natural gas as a transition fuel for fleet vehicles and heavy-duty trucks is a key element of that plan.”

    A year later we now know that the Pickens Scam had nothing to do with renewable energy. From last year’s press release.

    “With wind, there's no decline curve.”

    I am not suggesting Pickens is stupid. He is business man peddling his product. Stupid is buying into a scam to make others richer. We need a calculation of the number of stupid people with money that will switch to NGV.

  10. For those interested in petty matters like the prospect of paving over entire swaths of countryside with drilling pads, or inflammable tap water: Bluedaze: DRILLING REFORM FOR TEXAS.

    I took the current consumption of NGVs in the US and multiplied:

    "50 million CNGs would be more along the lines of 15 tcf. 100k vehicle fleet consumes 30,093.57 mmcf, multiply by 500 for 50 million vehicles/15,046,785 tcf. There are ca. 90 million solo commuters in the US according to the last broad vehicle survey, 135 million commuters total, 250 million cars, 200 million registered drivers." Post

    Thanks for the # crunching, Robert. Pleased to have hit a number roughly in the same neighborhood. The Alternative Fuels and Advanced Vehicles Data Center: Alternative and Advanced Vehicles has info on NGVs for the curious.

    Do gas stations utilize NG? Would think central heat wouldn't be critical for those little mini marts; thus perhaps hooking up lines to the stations will be an added up-front cost, and fuel retailing is already severely marginally economic as it is. Also, what would be the added drain on the grid from all those compressors cramming molecules down to 36k psi all day?

  11. “With wind, there's no decline curve.”

    This sounds like Pickens. His idea was to replace all gas fired power plants with windmills which would free up his natural gas holdings and investments to make him money fueling the new "natural gas economy"

    While he bought up increasingly precious water rights through his wind farm leases to tap the Edwards aquifer.

    "There's no decline curve" is "double-speak" for "We will burn the nat has in our cars instead of at the power plant."

    Pickens says nat gas will be used as a "transition fuel". To what ?

    Pickens suggests…… "the hydrogen fuel cell"

    Which would undoubtedly use natural gas as the hydrogen source.

    Smart business man……….

    A great American patriot delivering us from foreign oil ?

    I doubt it.


  12. How much nat gas do we use for ethanol? I thought I saw an estimate a couple years back that it was about 1% of US nat gas consumption? Is it closer to 2% now??

  13. reference information searches for the serious–

    westport innovations web site, with special emphasis on JVs with OMVL-SpA, HYUNDAI; WEICHAI POWER SYST[China].
    engine application- DAIMLER, MACK,PACCAR,others. web search same/similar topics. NGVAMERICA; a similar worldwide site exists.

    for future NG sources, search METHANE HYDRATES, with special emphasis on recent data from Gulf of Mex


  14. I'm going to use 30,000 btus of nat gas per gallon of ethanol. The real number is probably, at present, a touch higher than that, but it's an easy number to work with, and some ethanol is produced using coal, and biomass so it should come out close.

    So, 30 scf X 11 Billion gallons this year = 330 Billion scf.

    330 B/22 T = 0.015 or about 1.5%. Yep, pretty close.

  15. I AM making allowance for forty percent of the nat gas represented in the fertilizer being applied to the DDGS. I'm applying All of the nat gas at the refinery to ethanol.

    One caveat. About 15%, or so, of the ethanol comes from wet grind mills, and they use more nat gas. However, they have a more robust set of coproducts including some that that would be produced, anyway, and can not be substituted for by corn.

    1.5% is probably pretty close.

  16. John, I am certain that Pickens or anyone else is not going to reduce dependence on foreign oil with NG. Folks like to debate the potential for solving energy problems with a series of bad choices while ignoring good choices.

    Clearly NGV, HFCV, BEV have applications that make them good choises. GTL and ethanol is the obvious path for using NG to reduce oil use.

  17. Here's an interesting thought experiment: If 1.5% will get you 700,000 bbl/day. Thirty times that, or 45% would get you 21 Million barrels/day, or a little more than ALL the oil we use.

    .45 X 22 Trillion = 9.9 Trillion

    Perhaps we just want to replace the 70% of oil that's imported; that would be 6.93 Trillion cu ft.


  18. Lotsa new shale gas coming on line? I'm with a few folks herein saying convert this CH4 methane via GTL into liquds. Then integrate those liquids seamlessly with existing peak-oil refined petroleum fuels now in global use.

    Now then, what liquids?

    What might value-add $2 produced methane or stranded methane or flare gas into $14-$17 wholesale liquids? Any ideas?

    It won't be F-T synthetics hydrocracked from paraffin with huge CO2 footprints… It won't be Benny or T.Boones idea of 3,600 psi nat gas at the corner pumps. Boom!


  19. I thought natural gas MUST be the fuel of the future — and the patriotic one at that — when I saw the date in the corner of your CNG bus photo: fourth of July, 2009 !!!

    Then I realised I was reading it as European format 😉

  20. NG vehicles could be made for nearly the same price as gasoline vehicles for sure. There's nothing technical challenging about it these days.

    Range remains somewhat a challenge because the BTU/ft3 is poor for NG (and can we move over to kJ please). 🙂 Liquid HCs like gasoline and diesel having amazing properties that have driven their dominance.

  21. "I'm with a few folks herein saying convert this CH4 methane via GTL into liquds."

    Too expensive. The economics for GTL only work when you have a very large supply of cheap natural gas. That usually means stranded gas, and a large enough field to run a GTL plant for 25 years.


  22. "reference information searches for the serious .. for future NG sources, search METHANE HYDRATES

    No, fran. You just failed a simple test of seriousness.

    Anyone person who buys the line that mankind can go into deep water under stormy seas, use lots of energy to strip mine the sea bed on a huge scale & get down to the layer of putative methane hydrates, and then use even more energy to get the methane out of the clathrates, and do all of that safely & with no significant impact on the environment — that person does not meet the basic test of seriousness.

    People who are serious about energy, who understand that fossil fuels are finite, and who understand the almost unbelievable scale of the power required for 6.5 Billion people, do web searches on NUCLEAR FISSION.

  23. Great post. It's interesting that there are no substantial objections in the comments.

    So there are really no technical obstacles and the only serious non-technical obstacle is the threat of low oil prices.

    And of course we have another ace up our sleeves as well: coal. Using coal-to-liquid processes we could probably do without foreign oil for 100 years.

    I still think the end game should be nuclear fission to H2 fuels cells. Batteries are just a distraction unless an earth-shattering breakthrough occurs. Wind seems to have a place, but there's currently no good solution to the fact that wind just stops blowing sometimes.


  24. I have a friend who converted his old chevy pick up truck to run on propane. He did it himself, and if I know him, the conversion kit didn't cost very much. I don't think nat gas is any different.

    He did it to avoid emmission testing back in the late 90s. When the emission testing went away, he switched back to gas. He is the kind of guy who knows his vehicle inside and out, does all mechanical work himself and wouldn't let anyone else do any work of any kind on it.

    I will ask him about the cost on Monday.

  25. No, Kinu. You just failed a simple test of seriousness.

    Anyone serious about energy understands the difference between stationary and transportation fuels.

    And those who are only serious about energy are just shallow thinkers.

    NG has some important uses as feedstock for the modern world especially making fertilizer. In the 70s, it was suggested by many that using NG to make electricity should be criminal. Corn was rotting on the ground in Indiana because it could not be dried. Twenty five years later we are dumping milk on the ground in California because there is not enough NG to make electricity.

  26. “I will ask him about the cost on Monday.”

    DM, ask you friend what he would charge to install NG a conversion kit in other cars considering the cost of insurance to cover criminal and civil liabilities.

  27. Mercy-
    You have it right.
    The cynical, skeptical side of me is beginning to seriously wonder who are these people who keep insisting we must import Mideast oil, and that energy is becoming a very scarce commodity?
    Mideast powers have long retained major PR (spin machines) in the United States. Who knows how money flows through financial intermediaries, to buzz makers, columnists, even websites. Always the message is that energy is scarce, and we have to get oil from Mideast thug states.
    Sasol has been doing CTL for years. We have several lifetimes of NG under our feet. As the great Kinu point out, we can build nuke plants, or mini-nuke plants at will. Yes, we can build solar and wind at will.
    So why must we import Mideast oil for generation after generation?
    Bush seemed an obvious puppet or sycophant of the King of Saudi Arabia. But what is Obama doing. Seems like nothing.
    At least Energy Secy Chuis high on nuke power. Maybe something will jell here.

  28. Benny writes:
    Several lifetimes of NG under our feet

    100 years is several lifetimes?
    53 years, if we replace gasoline with NG, is several lifetimes?
    43 years, if we replace all oil imports from thug states like you want to, is several lifetimes? Maybe if it's a dog's life. I'm hoping to make it to at least 80 years old, myself.

  29. I have a friend who converted his old chevy pick up truck to run on propane. He did it himself, and if I know him, the conversion kit didn't cost very much. I don't think nat gas is any different….

    I was under the impression that LPG (liquefied propane or butane) was relatively easy to compress and store as a liquid, while methane has to be stored under high pressure, still as a gas. Is this reflected in a higher cost of conversion?

  30. How about nat gas as a railroad locomotive fuel? Stick one or more tank cars behind the power units…space should be much less of a constraint with trains than with cars or trucks.

  31. "Anyone serious about energy understands the difference between stationary and transportation fuels."

    One can only hope so, Kit. Natural gas is one of those interesting fuels that can (in specific circumstances) be used for either stationary or mobile uses.

    Probably the largest transportation use of natural gas today is to drive the ships that carry Liquified Natural Gas — the engines run on the boil-off from the LNG. But that won't help the activist who wants to drive from Pennsylvania to Washington DC to chant "No Blood for Oil" at a rally (if you remember the Wall Street Journal report).

    The large-scale 24/7 solution to our energy situation with existing technology is lots of nuclear power plants generating electricity and heat (stationary uses), and using some of that nuclear power to "mine" liquid (transportation) fuels from coal, tar sands and oil shales.

    Of course, this is based on a proper scientific understanding of the scam that is alleged Anthropogenic Global Warming. We can oxidize carbon for a long time without any worries about Al Gore's evil fantasies coming true.

    There is another element just as important as getting behind the use today of nuclear fission & mining of liquid fuel — that is continuing scientific research.

    We can keep the entire human race going at a good living standard with nuclear power for a millenium or two, but we need to use that time to develop the technologies human beings will need for the post-fossil, post-fission world.

    Serious people look at human history and realize that before plentiful fossil energy, there was slavery — the original form of "green" energy. Serious people realize that past is prologue — unless we quit wasting our limited resources & short time on dead end wind factories and solar dreams.

  32. MR. KINUACH…–

    two comments:

    begin, may6 entry,2009 gom jlp, legII.

    your commentary reminiscent of similar heard 30+ years ago, re–NAT GAS locked in shale.

    but then who knows the future.


  33. David said:

    "How about nat gas as a railroad locomotive fuel?"

    I think most of our freight trains are diesel- electric hybrids, They use a big V-12 or V-16 two cycle diesel engines which operate in combination with a generator to make electricity.

    The trains are powered by four large electric traction motors mounted in the bogey. The electric motors do all the work to turn the steel wheels. The diesels run in a relatively narrow rpm range since they are just used to make electricity. They are series hybrids and the diesel engines are not connected to the wheels in any way,

    Pure diesel engines were abandoned because of transmission problems although the Germans ironed out some of the kinks and do run pure diesels.

    The Japanese are beginning to go to Electro-diesels where a large bank of batteries is used to store electricity so that the diesel motor does not have to be run while the train is in the switch yard. The traction motors can just be run off the battery pack. The newer electro-diesels also use regenerative braking.

    The diesel motors for the gen sets are overbuilt for reliability sake and are pretty expensive, I don't know if it would be economical to switch to natural gas run generators or not.

    Nat gas might burn a little cleaner but some of the so-called pollution problems from diesel are eliminated with the new electric-diesels where the diesel engine need not be turned on while in the switch yard.

    Some of our passenger trains are pure electric as in Europe, Japan, etc.


  34. Clee-
    Oh, maybe I get a little carried away. On the other hand we have just started scratching the surface on shale. There seems to be otherworldly amounts of it, and we don't know if we will find more, if we look, now that we know how to get it. Some say there is another layer on top of the Hayneville field, just as big.
    And who is to say in 40 years we won't learn something new.
    Besides, if oil does become expensive, I expect more PHEVs and high mpg cars than CNG cars. On top of that, we just built out LNG port facilities, and NG strikes globally are going nuts.
    My point I think is still valid; We have gobs and gobs of NG.
    There is no doomsday scenario that makes sense, less it be we all fall down and cry. NG is not a panacea, but it is a viable option. We wil take that option when it makes sense. At more than $80 a barrel, I think we will see fleets convert. At $120 a barrel, ordinary cars.
    The vexing reality is that we may get repeated oil price collapses along the way. However, I think one more price spike, and it is game over for the oil thus states.
    Who in his right mind wants to depend on a Chavez, Iraq, Iran, Libya, Saudi Arabia, or Putin for their energy. This is thug's row.


  35. So Kinu, you want to put nuke plants in the middle of coal fields? You sound like the California fools who want to put solar in Alaska.

    The overarching advantage of nukes is the elimination of transportation of fossil fuels. The farther you have to ship coal, the more economical a nuke is. The reason Japan and France have a large mix of nukes is because they have to import fossil fuel.

    “No coal, no NG, no choice!”

    In the US we have lots of choices. If you look at where new nuke plants are being propose in the US it is distant from the coal fields.

    A prototype of smaller modular HTGR is being designed for DOE for the purpose of providing energy as Kinu has suggested. However, we are talking 2025 before it will be a reality. It will never be a reality as long as gas NG can be harvested for $4/MMBTU.

  36. It would be cheaper, around $8,000 USD, to switch exisiting cars to all electric. Yes the range is not that great, but new batteries can get over one hundred miles per charge. That should be more than enough for ninety-nine percent of commuters. For cross country trips, the US still has the most expansive railway system in the world. Or better yet install charging highways like Japan is doing. Natural gas busses can get those around who can not afford to convert their cars.

    Contrary to widespread belief, according to Department of Energy research conducted at Pacific National Laboratory, 84% of existing vehicles could be switched over to plug-in hybrids without requiring any new grid infrastructure.

    Save the natural gas for heating and public trans.

  37. "You sound like the California fools who want to put solar in Alaska."

    Hey! Common ground! We both agree, Kit, that the people of California have been very foolish since the 1960s – in their energy choices and in many other ways.

    But poor choices catch up with you in the end, as Californians & others are finding out.

  38. The $50 billion mistake Californians made was letting that gang of jackanapes named Enron control our energy markets….

  39. "The $50 billion mistake Californians made was letting that gang of jackanapes named Enron control our energy markets…."

    I just watched the Enron documentary today for the first time. I didn't realize the extent that they had manipulated the market. I can understand a bit better why Californians are suspicious of oil companies and the idea that they might manipulate the market.


  40. Great post Robert. I don't know the affiliations of the organization that produced the reserves report. Natural gas reserves are notoriously difficult to quantify with such new technology.

    However, I give them the benefit of the doubt for now.

    Natural gas is a great transportation fuel (especially for urban areas) wasted as a stationary fuel source producing electricity.

    The calculation of $4 per million BTU would likely rise a lot when natural gas beceomes more of a transportation fuel and the price to the consumer would vary considerably from location to location as transporting and storing natural gas are very expensive.

    However, natural gas would still be a better solution than most of the other oil alternatives out there.

  41. I just hate solar power because solar PV cells make it possible for me to get satellite TV.

    Yup, solar PV. …."Just another useless "toy"

    Ding Dong ….

    Anybody home upstairs? "


  42. Kinu the historical problem in California and the rest of the west coast in general is that there was a surplus of hydro power and that there was no penalty for bad management.

    In the 60s and early 70s California was actually a leader in nuclear power. The predictions for how much electricity would be needed turned out to be high. California was also able to import really cheap coal generations from other western states.

    Lot of people saw the California crisis coming as early as the late 80s including me. Making electricity is hard work. Scamming greedy people is easy work. ENRON was not a utility in California. To produce electricity you need power plants and fuel. The idea that the day ahead market would provide cheaper electricity only works if the PUC lets the new more efficient power plants gets built.

  43. RE: The idea that the day ahead market would provide cheaper electricity only works if the PUC lets the new more efficient power plants gets built.

    What it the efficentcy percent of the best new power plants and their design? Is the delay NIMBY concerns? We can't even get a train station built here in Southern NH. I can't imagine the grief trying to a new power plant.

    Also: Khosla continues to plug away with his investments.


  44. Takchess I will give you three examples of how the company I used to work for would make large profits selling electricity cheaper than the local regulated utility could make it.

    This company would develop the NG fields and process the gas. It would develop and build the pipe lines to deliver the gas. It would site, design, build, own, and operate a standard design CCGT. The marketing end would sell 20 year contracts.

    The first example was in New England. Around Thanksgiving in the late 90s, the company made a public announcement that they were going to build CCGT plant and have it on line to meet summer demand. I am thinking these guys are nuts since it was less than 2 years since all the players had merged to form the huge multinational company. I was wrong, the plant was on line my May. That summer the governor of Mass sent workers home on hot days to conserve to prevent rolling blackouts. A close call.

    The second example was a CCGT in Texas. It took a year from permit application to making electricity at a greenfield site. Texas had adequate reseves for a growing economy.

    The third example in California is replacing a 50 year old 1000 MWe SCGT with a 2000 MWe CCGT that used the same amount of NG. Twice as much electricity at half the environmental impact. If ever there was an environmental ‘no brainer’ this was it.

    However, it took 3 years to get the permit. Every month our CEO would send a letter to Governor Davis begging him to intercede to prevent a crisis. Finally we got a permit and permission to take the old 1000 MWe SCGT in May. First, none could predict it would be 106 in SF the first week of June. Second, 2 large power plants in the west had fires that took these plants off line for months. Then there was NG pipe line explosion in New Mexico. Not enough NG was put in storage for a drought year.

    Then there was the drought. Looking at hydro records, 2 out of 10 years the west coast system can not produce anywhere near capacity at the same time demand increases because of hot weather. Rolling backouts.

    The lesson to be learned is that when the people who make electricity tell you they can not make enough, maybe you should listen. Of course, like RR you can listen to those do not make electricity and blame ENRON.

  45. Oh, come on, Kit! You're not suggesting ENRON is blameless, are you? Ever heard the famous "Burn, baby, burn" phrase?

    Of course, CA officials and Gov. Dimwit Davis did their best to make things worse…

  46. Well, yes! Maybe Optimist can explain the responsibility of ENRON to supply electricity to California? It is a little like blaming TV for your kids not being able to read.

  47. By colluding with power producers
    The tapes, from Enron's West Coast trading desk, also confirm what CBS reported years ago: that in secret deals with power producers, traders deliberately drove up prices by ordering power plants shut down.

    "If you took down the steamer, how long would it take to get it back up?" an Enron worker is heard saying.

    "Oh, it's not something you want to just be turning on and off every hour. Let's put it that way," another says.

    "Well, why don't you just go ahead and shut her down."

  48. Actually, there was adequate electricity supplies in California during the rolling blackouts. It's just that Enron kept the electricity from getting from the producers to the customers by creating phantom congestion on the transmission lines.
    The traders said Enron held the transmission rights on Path 26, a key transmission line connecting Northern California to Central California and also connecting to Path 15, a major bottleneck grid pathway in Northern California.

    In fact, the dozen traders said they began manipulating California's power grid beginning in February 2000 and continued until the spring of 2001. The traders said the practices they engaged in resulted in two days of rolling blackouts in Northern California in the summer of 2000.

    On June 14 and June 15 that summer, when a heat wave swept through Northern California and pushed temperatures above 100 degrees, the traders said Enron clogged Path 26 with power, essentially creating a bottleneck that would not allow power to be sent via Path 15 to Northern California.

    "What we did was overbook the line we had the rights on during a shortage or in a heat wave,'" one trader said. "We did this in June 2000 when the Bay Area was going through a heat wave and the ISO couldn't send power to the North. The ISO has to pay Enron to free up the line in order to send power to San Francisco to keep the lights on. But by the time they agreed to pay us, rolling blackouts had already hit California and the price for electricity went through the roof."

  49. I love how the brown states like to point their dirty fingers at California and say that all our issues are due to our "wacky" environmental ways. Thanks to all of those that posted the TRUTH above, especially regarding the collusion material. If one of the best friends of "KennyBoy Lay" had not had been running this country there would have been some investigation that would have uncovered some seriously unethical dealings which are still costing Californians dearly while affording criminals in TX and other places even bigger mansions behind closed gates.

    Oh, but I digress. What I was wanting to say is that if you've done much traveling around the world these days you've probably noticed big old tanks filling up 1/3 of the taxi's trunk. These are CNG tanks. I'm going to go out on a limb and say that your average Turkish taxi cab has not had any $12000 spent on it to make it run on CNG. I would be surprised if we couldn't convert a significant portion of our transportation fleet to CNG.

  50. I love how the brown states like to point their dirty fingers at California and say that all our issues are due to our "wacky" environmental ways. Thanks to all of those that posted the TRUTH above, especially regarding the collusion material. If one of the best friends of "KennyBoy Lay" had not had been running this country there would have been some investigation that would have uncovered some seriously unethical dealings which are still costing Californians dearly while affording criminals in TX and other places even bigger mansions behind closed gates.

    Oh, but I digress. What I was wanting to say is that if you've done much traveling around the world these days you've probably noticed big old tanks filling up 1/3 of the taxi's trunk. These are CNG tanks. I'm going to go out on a limb and say that your average Turkish taxi cab has not had any $12000 spent on it to make it run on CNG. I would be surprised if we couldn't convert a significant portion of our transportation fleet to CNG.

  51. Clee you are incorrect and just repeating what journalists cut and paste from each others stories. In fact the problems in California predate ENRON by 10 years. I was test director at a power plant in 89 and was scheduled to shut down the plant. The test was delayed when the governor refused to order rolling blackouts.

    Congestion on California transmission lines were well known for many years. If it is hard to get a permit to build a power plant, it is 10 times harder to get a new transmission line built.

    Jeff, if you are looking to hold someone criminally responsible; look up S. David Freeman. He was GM of LADWP and before that SMUD. At the time, no large city got a higher amount of electricity from coal than LA. LADWP got 75% of its electricity from coal. LADWP was the biggest gouger in California. Of course S. David Freeman was standing on the California capital steps pointing at Texas because he was hoping that no one would notice his role.

    If you live in California and are blaming out of state investors, you may be surprised that biggest gougers were all public power. It is a matter of public record. Why has no California paper listed who sold electricity to whom and for how much?

  52. Kit P.,
    In my 4:52 PM post, I (and the journalist) was repeating verbatim what an Enron employee said on tape, (as traders phone calls are required to be taped), as was arduously transcribed by the Snohomish Public Utility District. If those quotations of the trader were wrong, I think Enron would have sued.

    In my 5:05 PM post, I was repeating a quotation attributed to an unnamed Enron trader. That's not as solid a source, but if an Enron trader says they caused the rolling blackouts in California, and explain in detail how they did it. I believe them over your vague protestations.

    Sure California could use more electricity generating capacity, and more transmission capacity, and sure the poorly-written deregulation legislation allowed for gaming of the system, but if it weren't for the scheming of the traders creating phantom congestion, there would have been no need for the rolling blackouts of 2000-2001.

  53. With all do respect Clee you are repeating newspaper accounts. I am providing you my recollection of events as I viewed them from within the electricity generating industry in Washington but with extensive ties to California.

    “I believe them over your vague protestations.”

    That is fine Clee, it is your choice. I am kind of used to folks who get their info from journalists not believing me. Snohomish PUD was not one of the gougers. There are suing because they got swindled. Did power get withheld from a small NG in Washington state cause rolling blackout in California? Sounds kind of absurd to me. Clee you do know a power plant can not be in both Washington State and California at the same time?

    I did observe that when the large the large nuke plant in Washington State tripped off line rolling blackouts occurred in California. Cause and affect! I did observe the various emergency orders the Washington State governor made to send power to California. I did observe the job that were lost in Washington State because aluminum companies could make money selling electricity to California.

    One more thing I did not observe, people in California doing anything about the problem except blame out of staters. My favorite quote came from our socialist gougers in Canada. The head of PowerX said the next time California has a problem, California better have cash.

  54. Snohomish, Washington sued Enron, which let them get a hold of the Enron tape, which let them painstakingly transcribe all of it, including the sections not directly relating to Washington power, including the sections where Enron traders boast amongst themselves about the money stolen from California.

    The shutting down of a steamer plant out of state does not preclude traders from having also caused rolling blackouts in California in June 2000 as the traders themselves explained in their own (not journalists) words.

    Here's more from the transcripts, this time regarding the rolling blackouts in California on January 17, 2001, in part caused by Enron conspiring to have a plant in Nevada shut down.

    Bill: Ah, we want you guys to get a little creative.
    Rich: OK.
    Bill: And come up with a reason to go down.
    Rich: OK
    Bill: Anything you want to do over there? Any –
    Rich: Ah-
    Bill: Cleaning, anything like that?
    Rich: Yeah, Yeah. There's some stuff we could be doing.
    Bill: That’s good.
    Rich: Right.
    Bill: It’s supposed to be, ah, you know, kinda one of those things.
    Rich: OK, so we’re comin’ down for some maintenance, like a forced outage type thing?
    Bill: Right.
    Rich: And that’s cool.
    Bill: Hopefully….
    Bill: So you got a—so you’re checkin’ a switch on the steam turbine.
    Rich: Yeah, and whatever adjustment he makes today, is probably—tonight, is probably not gonna work, so we’re probably gonna have to check it tomorrow afternoon again.
    Bill: I think that’s a good plan, Rich.
    Rich: All right.
    Bill: I knew I could count on you.

    Californian's don't just blame out-of-staters. They also blamed Gov. Gray Davis enough to oust him in a recall election. But I think it's fair to blame out-of-staters when they use fraud to push CA over the edge it foolishly stands on. There's plenty of blame to go around.

  55. I will explain again Clee. Drive over to Santa Cruz. You will see a 2000 MWe CCGT power plant. That plant was off line in June of 2000 although California authorities had planned for it to be on line. However, Duke Energy (the company that I worked for at the time) did not get a permit to start refurbishment until May. Also the 900+ MWe nuke plant Ranhco Seco (where I also worked when it closed) had not been replaced. Without drastic action, rolling blackouts were inevitable in June 2000. Your governor failed to do his job.

    If you would like to tell me what large steam plant in Washington State was gamed by ENRON, I would be interested. It was I do.

    I have some more bad news for naïve Clee. Yours and my Senators and Congress lie to you in testimony on the floor of congress. Yes it is called lying by omission. It is very interesting to me the info that Senators Feinstein, Cantwell, & Wyden did not provide. Do this for me Clee, look up how much electricity LADWP sold in the grid and how much they got paid.

    Which large power plant was off line in Las Vegas? Las Vegas is another place that I have worked a lot. I do recall being in Las Vegas during rolling backouts. I went to a big casino for lunch with my wife. I notices that the parking lots were on. I stopped by security and ask them to turn of because rolling blackout were occurring in California. When we came out, the packing lot lights were out.

    Please do not get me wrong. I am not trying to defend ENRON. It is important to understand the root cause of problems to prevent them from reoccurring. The way to prevent rolling blackouts and fraud is to have an adequate generating capacity. We should keep building wind and other renewable energy capacity but we should not be fooled into thinking if others sources like nukes and fossil are needed too.

  56. Kit it is really ironic that you think your "recollection of events" has more credibility than Clee's newspaper accounts. His statements on what Enron said and did are part of the public record, which came out during the trials of Skilling and Lay.

  57. The trials of Skilling and Lay were not about California. In fact, Lay had retired and only came back to save the company he had built. I will again point out that ENRON was not a California utility.

    I will also point out that newspapers are not public records. My observations are frequently different than what journalist report. One example was a blackout in Stockton which was PG&E territory. The cause was a failure in the distribution system. The system fault was detected by the properly maintained electrical equipment. As a result, pumps tripped and our power plant shutdown. The public record shows a clear cause and effect. PG&E blamed SMUD and that is what was reported.

  58. It will be very embarrassing if we have to listen to anyone at this year's ASPO in Denver, continuing to make the case for geological peak North American NG.

    What we should address immediately are the myriad hurdles to accessing this vast resource base–at scale. Water, infrastructure, and so forth.



  59. I run a natural gas conversion company in India, since 2005.
    I can convert a natural gas vehicle to run on CNG with state of the art equipment for as low as 1000k usd and upto 2200 usd max.
    We do Diesel conversions for 2500 usd.
    -Viraj shah

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