Natural gas: Fuel of the decade and bridge to the millennium

The technical and economic reasons why natural gas should be the principal source of primary energy for new or replacement power generating equipment in North America over the next decade or two are reviewed. Gas turbine generation has higher efficiencies than any other thermal generation mode, capital costs per kWh of capacity are 80-90% less than for coal or nuclear plants, the number of kWh at which optimum efficiency is reached is low, turbine designs are standardized and very reliable, construction lead times and costs for gas turbine plants are low, emissions are lower than for any other fossil fuel generation technique, and the resulting costs of electricity generated are low. The reasons for the failure of natural gas to live up to its market potential are discussed. These include the perception that natural gas reserves are limited and that supplies will become more costly over time, which is not borne out by facts; and the desire of producers and marketers, concerned about future shortages, to sign customers to long term contracts or charging market premiums, thereby discrediting gas as a reliably cheap primary fuel. An alternative paradigm for the gas market is presented, based on constant expansion of the resource base, falling costs, and organizational efficiency. Although impressive gains in efficiency and cost reductions have been achieved in the producing sector, distribution costs have expanded to offset some of those gains. 1 fig