Has Fossil Gas Peaked?
October 30, 2020
Yer lookin’ a little peaked..
Exxon Mobil Corp. warned it may take up to $30 billion in writedowns on natural gas fields acquired more than a decade ago, and reported a third straight quarterly loss.
Exxon is confronting one of its biggest crises since Saudi Arabia began nationalizing its oilfields in the 1970s. If the company takes the full $30 billion impairment, it will be the industry’s worst in more than a decade, according to Bloomberg data.
The company lost $680 million, or 15 cents a share, during the third quarter, compared with the 25-cent per-share loss forecast in a Bloomberg survey of analysts. The shares fell 1.6% to $32.45 at 12:09 p.m. in New York and are down more than 50% for the year.
One of the largest utilities in the U.S. put $8 billion into a bet that natural gas would dominate American electricity much like coal had before. “We really consider this to be a growth play,” Tom Fanning, chief executive officer of Southern Co., said in an interview just five years ago, as his company set on its landmark acquisition: natural-gas distributor AGL Resources Inc.
Gas looked to be on the verge of generational dominance at the time. The American fracking boom had made the fuel superabundant and cheap, hastening coal’s rapid decline, while energy from wind and solar had higher costs and lower reliability. A giant utility like Southern would naturally see gas pipelines and storage as the key to a durable and lucrative future, meeting demand that would continue to grow.
Now those expansive time horizons are in deep doubt. In fact, there are flashing signs that the U.S. power sector is approaching peak gas, with demand topping out decades ahead of schedule. “The era of robust growth in the U.S. natural gas market is likely coming to a close,” says Devin McDermott, an analyst at Morgan Stanley. “It doesn’t mean the market falls apart. It doesn’t mean gas demand falls off of a cliff. It means that we need less new supply going forward.”
Several states including California and New York already have legal mandates to reach 100% renewable or carbon-free electricity by 2050 or sooner. This is just the start.
The others have established mandatory goals below 100% or voluntary targets. All told, more than half of U.S. states have established renewable-energy targets that will push utilities away from gas.
At the local level, more than 30 cities have put in place gas hook-up moratoriums on new construction in support of all-electric buildings.
Natural gas only fulfilled its destiny as the nation’s top power source in 2016, backed by hundreds of billions of dollars invested in the creation of a gas-based economy. Renewables could take over as the No. 1 power source on the grid as soon as 2028, according to projections by McDermott and Morgan Stanley analyst Stephen Byrd.
The American gas peak will mark a critical juncture—and it may have already been reached. McDermott expects overall U.S. gas demand growth in the U.S. slow to between 1% and 2% per year through 2030 as use by power generators shrinks by 2% to 3%. Overall demand could flatline or fall slightly if the Democrats win in November, a dramatic shift after years of record growth. “It’s a gradual trend, but it does add up over time,” he says.
Blindsided by the economic fallout from the Covid-19 pandemic, Exxon Chief Executive Officer Darren Woods abruptly ditched an ambitious rebuilding effort and imposed widespread job cuts that are unprecedented in Exxon’s modern history. His top priority has been preserving a dividend that pays shareholders $3.7 billion every three months.
The firings and layoffs announced Thursday will affect 14,000 workers in the U.S. and abroad. Pandemic-induced lockdowns have crushed demand for oil, natural gas and chemicals, sending Exxon’s finances into a tailspin. Prior to 2020, the company hadn’t posted a quarterly loss in at least three decades.
Arizona utility regulators on Thursday, in a split vote, approved a plan for utilities to get all of their energy from carbon-free sources like solar and nuclear energy by 2050, bringing the state closer in line to other Western states.
The new regulations require electric utilities to get half their power from renewable energy like solar and wind in 2035. Then in 2050, they would need to supply all customer demand for electricity with either renewables, carbon-free nuclear, or energy-efficiency measures such as subsidizing low-watt lightbulbs or attic insulation for customers.
The new requirements will spur development of solar plants, battery storage and other renewables, though commissioners debated whether the rules will affect customers’ bills. Because the rules require additional energy-efficiency measures, they are likely to include opportunities for customers to save through utility conservation programs.
Arizona Corporation Commissioners approved the measure, which increases the requirements for the first time in 14 years, on a 3-2 vote. Voting in favor of the new rules were Republican Chairman Robert Burns, Democrat Sandra Kennedy, and Republican Boyd Dunn. Opposed were Republicans Justin Olson and Lea Márquez Peterson.
Climate Denial Crock of the Week 
October 30, 2020 at 10:33 pm
Encouraging, if this pans out. However, here’s two facts not mentioned:
1. The U.S. has become a big exporter of nat gas. Climate doesn’t care who burns our Nat Gas.
2. The U.S. accounts for only 13% of global emissions. Climate doesn’t care which country burns FF’s.
Only the total amount of CO2 in the atmosphere matters. The rest is hot air. Talk is cheap, alas. We’ve seen “peak oil” or “peak nat gas” has arrived – and then it hasn’t. We’ve merely added renewables to the mix of energy options, optimizing our civilization growth, encumbering new energy to support the creation and maintenance of that growth.
It’s October, and the annual minimum is atmospheric CO2 is in, as CO2 starts to rise again. Check out the latest Keeling Curve and plot it for 2 years. That minimum is again 3 ppm above last year’s minimum. It’s been rising 3 ppm per year for several years now, up from 2 ppm per year a decade ago and earlier. And… In the midst of the most wrenching global economic depression in almost a hundred years. The message looks to be, that our indirect emissions – from thawing permafrost, from crippled tropical rain forests, from drying soils… is taking over the duties of ruining the atmosphere from us.
October 31, 2020 at 10:39 am
all good points, but my bet is that, just as the collapse of coal began in the US, the collapse of gas will do the same.
It starts with voting for a candidate with an actual program for moving a clean energy agenda.
By the way, while the emissions from permafrost are real, they are an order of magnitude less than
human emissions, and all my conversations with methane experts affirm that humans remain, by
far, the largest control on emissions.
I’ll be posting more on this from Jeff Severinghaus, who has recent, relevant data from ice
cores supporting this.
November 5, 2020 at 7:18 pm
Too bad we let the Democrats cheat the only POTUS candidate with an adequate plan out of the nomination, and then put up a POTUS candidate and a slate of Senate candidates instead who are so—fill in your choice of descriptions—tepid? corporate? right wing? (All are true)—that even opposing a rabidly mentally ill fascist and a party of insane people, the presidency’s a tossup, they actually lost seats in the House, and the Senate will continue to block action on any of our crises.
How can we not recognize that as a dire problem that negates any chance of preventing catastrophe unless we reject it?
The gray Democrats collaborated on decades of gerrymandering and voter suppression—with silence if not actively (eliminating Dennis Kucinich with gerrymandering, cementing incumbents’ place…)
I wonder if people here will join in calling for the necessary peaceful overthrow of the US government when (if Biden wins) he and they once again betray us all by ignoring progressives, appointing right wingers to every post and refusing to take any of the actions necessary to avoid increasing oligarchy and climate cataclysm… or if there will just be more excuses made for them. The delaying tactic of a carbon price isn’t even on the table without the Senate in the hands of blue-tinged oligarchs instead of red-tinged ones. It’s extremely unlikely the Senate will be flipped in 2 years; more likely to lose seats if Biden wins. Waiting another 4, according to science and most experts who have weighed in, will be too long to save much of what we love. What will the position of Crock of the Week be when we’re on the cusp of completely losing our ability to avoid the end of civilization in our lifetimes.
October 30, 2020 at 10:45 pm
“more than half of U.S. states have established renewable-energy targets that will push utilities away from gas.”
Is this the populous states or the low-pop states?
October 31, 2020 at 10:41 am
includes California and New York, and my state of Michigan, so definitely the big influential states moving in that direction.
October 30, 2020 at 11:25 pm
The Hill 10/29/20
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Maryland, North Carolina, Virginia partnering on offshore wind energy development
“Harnessing the power of offshore wind is key to meeting the urgency of the climate crisis and achieving 100 percent clean energy by 2050.”
https://thehill.com/policy/energy-environment/523403-maryland-north-carolina-and-virginia-partnering-on-offshore-wind-energy-development
October 31, 2020 at 12:54 am
North Carolina . . . 9th State of the United States by population
Virginia . . . . . . . . 12th State of the United States by population
Maryland . . . . . . . 19th State of the United States by population
source : https://en.wikipedia.org/wiki/List_of_states_and_territories_of_the_United_States_by_population
October 30, 2020 at 11:30 pm
Nikkei Asia
October 28, 2020
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South Korea joins Japan in making 2050 carbon-neutral pledge
“The announcement comes two days after Japanese Prime Minister Yoshihide Suga declared the country will strive to become a carbon neutral society, with zero net emissions, by 2050. ”
https://asia.nikkei.com/Spotlight/Environment/South-Korea-joins-Japan-in-making-2050-carbon-neutral-pledge
October 30, 2020 at 11:32 pm
Reuters
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Japan’s new climate goals lift prospects for crippled nuclear industry
There are currently only two reactors operating, down from about 50 before the 2011 earthquake and tsunami that caused the meltdown in Fukushima.
https://uk.reuters.com/article/us-climate-change-japan-nuclear/japans-new-climate-goals-lift-prospects-for-crippled-nuclear-industry-idUKKBN27F0C4
October 30, 2020 at 11:33 pm
Reuters/Trust
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Climate pledges from Asia send ‘extremely important’ signal, says U.N. climate chief
Recent pledges by Japan, South Korea and China to go carbon-neutral within decades will have real impact, says U.N. climate chief
https://asia.nikkei.com/Spotlight/Environment/South-Korea-joins-Japan-in-making-2050-carbon-neutral-pledge
October 30, 2020 at 11:35 pm
AFP
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Last major Aussie bank ditches coal, in fresh blow to sector
Australia’s ANZ became the country’s last major bank to walk away from thermal coal investments Thursday, delivering a fresh blow to a sector facing export market upheaval and widespread public hostility.
https://www.bangkokpost.com/world/2010535/last-major-aussie-bank-ditches-coal-in-fresh-blow-to-sector
October 31, 2020 at 1:18 am
I’m not impressed by nations “pledging” this or that.
When the banks and investment giants switch, that’s cause for celebration.
October 31, 2020 at 10:41 am
exactly. follow the money.
November 1, 2020 at 3:55 pm
There’s only one competitor the gas industry is worried about — nuclear:
In my view, we should not squander all our gas reserves in the 21st century to make electricity. We should use nuclear. Gas is important for other things besides energy, like plastics.
November 5, 2020 at 9:28 pm
At least 30 states, Puerto Rico, & DC have high-RE electricity plans.
It has to be more than 50; they have to be 100% or more; and they have to consider both production and consumption. They have to be binding. They have to be followed. Any goal later than 2030 is inadequate. Fortunately, even simple market forces are moving faster than most state plans, creating a gap between RE & FF prices and constituencies for RE. But it’s not nearly fast enough; strong government action, especially federal government action, is needed, and that will never happen until the current crop of bipartisan climate-denying delayalists is removed from power and replaced with ecologically aware, psychologically aware progressives.
ncsl[DOT]org/research/energy/renewable-portfolio-standards.aspx
In addition, 30 countries and more than 1800 national, state and local governments have declared an emergency through the campaign led by The Climate Mobilization.
theclimatemobilization[DOT]org/climate-emergency/