One of many reasons I thought that deregulating gas/electric utilities was not a good idea...but no one asked me.
Spoken like a true Yankee. I noticed you were from Chicago.
I was born and raised in Louisiana, which was and still is a large natural gas producer. I vividly recall that people in Louisiana paid MORE for natural gas than the people in the Northeast during the years of regulated natural gas. Give thanks to Ted Kennedy and other powerful politicians for the low fixed prices set for the out of state market. In-state prices were not as tightly controlled, hence the higher prices. Deregulation occurred for one simply reason: the cost of getting the gas out of the ground was higher than the sale price. It was taking several years of gas sales for producers just to recoup their costs of drilling a new well before making a profit. So what happened: no one drilled new wells. When the supply started to rapidly disappear, the politicians realized they had to allow the price to rise or the supply would go to zero. I personally saw this as a teenager in Louisiana. I would go deer hunting in some off the beaten path areas, and every once in a while I would come across a natural gas well sitting in the middle of nowhere, surrounded by pine trees and blackberry thickets. I asked someone who was in the petroleum industry if these were abandoned wellheads. He told me that most were actually viable wells, but the price of running a extension pipeline (and building a road, etc.) to the main pipe line was not economical. Once gas was deregulated, the price was allowed to rise, the roads and pipe lines were built, and a lot of these wells were brought on line. Hence end of supply shortages.
Now to present day. Fracking and more importantly horizontally drilling have allowed the smaller pockets of gas to be economically extracted. So much has come on line that the supply has greatly exceeded demand, and the price of natural gas has been very low for the last couple years. This has been a two edged sword as many utilities are closing their coal plants (and some nuclear plants) and building natural gas turbine generators, since natural gas prices are presently very low and it only emits about half the CO2 of a coal plant. The government has been pushing utilities toward this path with the ever increasing restrictions on coal plants and coal burning. The end result is a large increase in natural gas demand, but the supply so far has keep up with the demand. When the polar vortex hit, that changed QUICKLY. Several factors are at play for the present outages. The most obvious is that natural gas demand for the whole country went up sharply as the temperatures dropped. Natural gas for home heating takes precedent over electricity and industry (as it should), and so the feds ordered a cutback on natural gas supplies to non home heating customers. So a second whammy occurs in that a lot of electrical generation goes offline or is reduced. In Texas, where quite a bit of electricity is generated by wind, another whammy occurs (and apparently did occur). The wind turbine blades have to be flexible enough to withstand the stresses imposed by varying wind speeds, etc. In very cold weather, they lose this flexibility, and will become rigid enough to fail if over stressed. Hence, during a vortex event, the windmills will be taken offline to prevent blade failure. Third whammy. There is even a fourth whammy. When the temperatures get far below freezing, heat pumps don't work worth very well, and everyone has to use supplemental electrical heating. So in a extreme vortex event, electricity demand is skyrocketing, you just lost most of the wind and natural gas generation and everyone acts surprised that a lot of people are sitting in the dark.
I lived in Ann Arbor, MI for five years, and one thing that was readily apparent to me was that natural gas is much more valuable for home heating than for generating electricity. It gets freaking cold up north in winter. Every year is a "polar vortex" as my friend from Chicago will probably testify in agreement. Save the natural gas for home heating.
So what about solar. One little problem. Only 8-10 hours of sunlight a day year round, at BEST. In Ann Arbor, from Nov 1st to April 1st, you would be lucky to get two weeks total of sunny days. I learned first hand the true meaning of the phrase "cabin fever".
I constantly hear the politicians and others talks about renewables and carbon free generation, etc. But how do you instantly replace tens of Gigawatts of electricity production, so we are talking when the wind suddenly stops or the sun is not shining?
As we shut down more coal plants and nuclear plants in favor of natural gas and renewables, this is going to be repeated in more places and more often, even without a polar vortex. It will be interesting to see how this all works out.
Disclaimer: I am a nuclear engineer, so my biases are out in the open.
www.griddy.com
