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Comment by dv_dt | Hacker News Reader

Next they should do the same with natural gas. The data on the investments of nat gas fracking make it doubtful that it will pay back even the last round of capital investment.

https://www.desmogblog.com/2019/12/17/us-fracking-shale-wood...

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As the cost of renewable power continues to drop, investing in extracting oil/ natural gas/ coal from the ground is going to make increasingly less sense. Coal has the fewest uses outside burning for power and the greatest environmental impact, so it's the most vulnerable, but oil and NG are going to come under increasing pressure.

It’s a great stocking stuffer.

It's coming; coal is unprofitable largely because it's been displaced by gas. But solar and wind are starting to gain critical mass, which could mean that natural gas craters faster than coal has. Fossil fuels are starting to look very risky.

The point of that article is that nat gas, even without additional climate externalities loaded onto it (which they should be), looks like it will turn out to be a poor investment. If we then add future analysis of climate costs onto that, they should already be as dead an investment avenue as coal.

But part of the reason why coal is a poor investment is the issue of climate change. Work on solar panels and other renewables is at least partly spurred on by the threat of climate change.

Natgas can’t and won’t die in the short term. It is necessary to balance the intermittency of renewables in electrical generation, at least until there is viable utility scale battery storage. I’m not sure there is another good alternative at the moment. Even if loads were to decrease dramatically (unlikely in my opinion) it would still set the marginal price for electricity in most areas.

There is a massive oversupply globally of natgas at the moment, which is why the long term investment outlook looks bad. It has been overproduced via copious debt, increasing efficiencies have made the extraction price very low, and it’s a pesky byproduct of oil production in some areas (and pricing reflects that in those areas with prices actually going negative at some times). Perhaps if the environmental externalities of extraction were priced in, it would be more expensive but it’s a big reason why the US has been able to retire so much coal over the past decade. Arguably this is a huge net win environmentally speaking.

Sealed nuclear reactors [1] will likely play a big role here. They are much safer and far less expensive than nuclear tech currently in operation (which dates back to the 70s or earlier). The astronomical cost of building a nuclear power plant has been a huge barrier to adoption, but that should come down significantly over the next decade.

[1] https://www.world-nuclear.org/information-library/nuclear-fu...

I hope you are right. I think nuclear power is probably the best thing that can be adopted. The new build costs are astronomical compared to natgas though and I’m not entirely sure why. We’re talking almost an order of magnitude the last time I looked - 1200/kw for gas vs 8000/kw for nuke. Gas costs have come down dramatically over the years while nuclear costs have increased. I hope this trend can reverse. Don’t know anything about the sealed reactor that you’re discussing though.

Renewable + storage, for intermittent supply, is already cheaper than a natural gas peaker plant for intermittent supply.

I think this is wrong in terms of new build cost. Especially if you take away subsidies. As far as I know, local factors aside, wind gen costs around 1500/kw without storage. Solar is similar, and gas is around 1000-1200 for a combined cycle and 800 for a simple ct (which would likely be a peaker). If I am remembering correctly, Duke energy recently completed a combined cycle plant that came in significantly under cost - around 900/kw.

If you add utility scale batteries, you’re looking at much more for renewable. I’m not sure what type of storage you have in mind though. Add to that, the capacity factors are very high for gas, while notably low for renewable. This impacts payback severely and I’m not even sure if you can sell capacity against a renewable plant - I may be wrong here.

What type of renewable are you talking about and what type of storage? Also what are the new build costs you are referencing? Or are you simply saying that a utility scale battery costs less than building a peaker?

fracking is a very expensive form of gas, versus say Qatar. Also seems to have large greenhouse effects via leakage.

It used to be, my understanding is that these days many fracking operations are viable at $40 a barrel.

The US didn't become the world's largest oil producer by producing the most expensive oil.

$40/barrel break even is still way more than most conventional oil fields. It's killed off say, tar sands and some of the more expensive off shore/arctic plays (say, like some pre-salt fields). The other thing about shale is that it tends to be short cycle (most of the production in a few years), rather than long cycle payoffs. That might be more attractive to majors avoiding risks.

Why do you care if the saudis can extract it cheaper especially considering they are the ones manipulating the supply just to increase their profits? As long as I'm going to pay 60 bucks a barrel, I'd rather pay my fellow americans especially since it is making us energy independent which hopefully means we can avoid any more stupid wars in the middle east (one can dream at least).

Plus, this doesn't even consider the environmental affects on the water supply. These fracking chemicals are poison and not contained well.

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