Natural gas bubble collapse may take NIMBY with it

By Pam Boschee, Managing Editor

Just how long can the NIMBY (not in my backyard) stance prevail?

The recent deluge of warnings and alarms about the collapse of the natural gas bubble suggests that we’re reaching the end of the rope as far as bowing to the NIMBY stance.

No one wants new power plants of any kind (in fact, many people aren’t thrilled about existing power plants, which in many cases have been in the same location for decades), substations, transmission towers or development of resources within their sight line or within earshot. In the case of development of remote resources, many people are opposed even though thousands of miles separate them from the “impact”. Many of those same people may never before have been aware of the existence of those resources.

However, everyone wants–no, make that demands–low cost, high quality, uninterrupted power.

Putting aside for the moment the status of the U.S. natural gas supply, I’d like to focus on this unwavering dichotomy. Opposition seems to have escalated to the point of zero tolerance for infrastructure development. Almost any solution gets shot down.

Nuclear. Generates about 20 percent of the nation’s electricity supply. However, vetoed due to concerns about operating safety and disposal of radioactive waste. Three Mile Island, Chernobyl and the prolonged debate over Yucca Mountain have most likely precluded the construction of any new nuclear power plant in the U.S. until, well, the “Jetsons” become reality. It’s likely that tourists will be routinely traveling in space long before we see another nuclear power plant. National Public Radio reported in June that the Soviets already have plans to host two space tourists per year for the nominal fee of $20 million each.

Coal. Generates 50+ percent of our electricity. Many see it as a necessary evil. Viewed as dirty–a pollution problem. Our generation section this month (see page 19-20) shows how new clean coal technologies offer solutions to remedy these problems. Regardless of your opinion, however, it remains comparatively low cost and abundant.

Renewables and hydropower. Generate 9 percent of electricity. Controversy flows from dams’ effects on fish populations and diversion of water resources. Renewables, such as wind generation, also find opposition in terms of environmental impact on wildlife and land use, as well as complaints about noise resulting from the turbine’s blades spinning in the wind.

Fuel cells. Yes, even the hydrogen economy, by some estimates at least several decades away from practical application, is under scrutiny. A recent Science article reported that a hydrogen economy could create bigger, longer-lasting ozone holes over the earth’s poles. Leaks (about 10 percent of all hydrogen manufactured) from its production, storage and transport could increase the amount of the gas in the atmosphere, which would worsen ozone depletion. Current losses are already greater than this.

So, I’ve returned to the topic that initially sparked this manifesto.

Natural gas. There are strong economic, efficiency and environmental reasons to use natural gas in the generation of electricity. However, the natural gas bubble of 10 to 15 years ago or so appears to have burst. Prices remain above the $5 per MMBtu mark and probably won’t be dipping back to $3 anytime soon. And the forward price curve for natural gas traded in futures markets is today at an all-time high. Supply is tight but thanks to a somewhat flat demand resulting from mild weather and a sluggish economy, no real crisis is at hand.

The challenge in tapping additional reserves has been kicked up a notch. The comparatively easy-to-find, easy-to-develop reserves are sputtering. Now, the hard (and more costly) work must begin.

New, undeveloped areas are being targeted for exploration and production. Many of these reserves will be tougher to access and will require longer distance transport. Liquified natural gas (LNG) imports are being eyed and new receiving terminals are being discussed.

It’s obvious there will be no easy–or perfect–solution. Controversy is a mainstay. And it may be time for energy companies to make customers aware of this.

The Oklahoma Energy Resources Board offers some lessons for utilities. Voluntarily funded by Oklahoma’s oil and natural gas producers and royalty owners, the OERB is dedicated to restoring abandoned or orphaned oil sites and educating the community on the contributions of the oil and natural gas industry. What they’re really accomplishing is commendable: putting a positive spin on Superfund site clean-up. Their Web site proclaims, “4,768 sites have been voluntarily restored by us since 1995.”

We could squabble about the use of “voluntary,” but it helps illustrate my point of how they deliver their message. Their TV commercials feature soft-spoken, grateful landowners, usually standing in amber waves of grain.

Utilities need to get their messages out to customers about what it’s going to take to keep the lights on. The challenge will be to turn the downside (everything the public opposes) into a perceived sacrifice or altruistic gesture by the energy company–a la OERB.

Energy companies need to promote their own images–perhaps landowners surveying their horizons, which include transmission towers running across the fields in artistic diagonal patterns; homeowners contentedly grilling in their backyards, while an aerial view shows a substation located in their neighborhood.

It’s time to puncture the consumer’s bubble. NIMBY, no more.

Pam Boschee

Previous articlePOWERGRID_INTERNATIONAL Volume 8 Issue 4
Next articleEnron, creditors reach tentative agreement

No posts to display