The Future of U. S. Energy: More like Texas or Germany?

 

In an article in the August issue of National Review, Mario Loyola warns of a looming energy crisis in the U. S. that would be largely self-inflicted.  Stated simply, it's a case of increasing demand and decreasing supply of reliable power.

 

First, the increasing demand.  For many years, it looked like the future of electric power in the U. S. was one of slow growth, mainly because the increased efficiency of traditional power-hungry industries such as manufacturing was combining with the overall transition to a service economy to create a situation in which we were doing more every year with only slight increases in power consumption. 

 

That is no longer the case.  And one of the big reasons is a new type of industry:  server farms.  The explosion in demand for computing power for novel applications such as artificial intelligence and cryptocurrency mining is now one of the biggest growth sectors for electric power.  Loyola says electricity demand will grow by at least 15% by 2032, only eight years from now. 

 

How are we going to meet that demand?  Right now, nobody knows.  From an economic point of view, building new power plants is a long-term process.  Investors want to be sure that the billions they put into new plants are going to pay off profitably during the lifetime of the equipment.  That requires, among other things, a stable regulatory environment.  But electric power is one of the most heavily regulated and perversely subsidized industries around.

 

The perverse subsidies right now are all in favor of renewable energy such as solar and wind power.  The reason for this is not economic as much as it is ideological.  A substantial and powerful political sector would like nothing better than to see all fossil-fuel facilities tossed into the ocean (except for the pollution that would cause) or otherwise banished from the planet.  We won't go into the well-known reasons for the hatred of fossil fuels here, but the fact of the matter is that if all fossil-fuel facilities vanished tomorrow, most of us in the U. S. would die in a matter of weeks. 

 

The result of all these incentives is that the "interconnection queue," which is kind of a waiting list that the Federal Energy Regulatory Commission keeps for prospective generating facilities, is currently 95% solar power, and hardly anyone seems to be planning new natural-gas or nuclear plants. 

 

No matter what politicians say, you get no power from solar or wind on a windless night, of which there are many during the year.  And it is still largely true that we can't store large amounts of energy in batteries, although about 4 GW of battery capacity is now on the grid.  For comparison, the total generating capacity available in the U. S. in 2022 was over 1,600 GW.  That's 0.25% of our total capacity.  To get it up to even 10% would require 40 times as much storage as we have now, and we won't get there for years, even if we could afford it.

 

For the foreseeable future (which feels like it's shorter all the time), a reliable, dispatchable power grid will need to have at least a majority of its power coming from sources you can turn on and off whenever you want.  Right now that means nuclear, gas, and (pardon the expression) coal-fired plants.  But for various mainly ideological reasons, coal-fired plants are getting as scarce as DVD rental stores, and nuclear is under both a political cloud and subject to extremely encumbering regulations, as are most types of power infrastructure, even renewable-energy ones. 

 

In a separate article in the same issue, author Dominic Pino points out that the only U. S. industry largely free of any kind of regulation is the tech sector, meaning software-websites-social-media stuff.  Any activity that needs large numbers of people working for it, large amounts of stuff on land, or large amounts of imports runs into a forest of regulatory trees that requires years of bushwhacking to get through—except for tech.  And what industry is doing famously well compared to all the others?  Don't ask.

 

Even tech needs power, though, and if we keep going the way we're going, we will end up like Germany, which made the politically favored but empirically stupid decision a few years ago to shutter all its perfectly good nuclear plants.  So now Germany depends for its energy largely on natural-gas plants running off Russian gas, which is like chickens buying chicken feed from the fox.  Experts at the Harvard International Review attribute Germany's lackluster economic performance the last few years to its extremely high energy prices, which in turn result from slow growth even in the renewables sector and bureaucratic barnacles on the ship of state.

 

On the other hand, Texas, with its famously independent electrical grid, is going ahead with plans to add a lot of dispatchable power in the forms of natural gas and possibly even nuclear energy.  Texas A&M (still fondly known as Aggies despite the fact that the agricultural school is dwarfed by high-tech engineering these days) is planning to build not one, but several small nuclear power plants right on their campus in West Bryan.  Governor Abbott likes to do news releases every time a generating firm announces plans to build new power plants, whether it's natural gas, nuclear, or something else.  Just one recent announcement from his office stated that 42 new gigawatts of power was being planned by one firm, which goes a long way toward getting us to the 150 GW or so that Loyola says Texas will need by 2030.

 

And while I chilled out along with everyone else during the February 2021 Texas cold-weather grid failure, which might not have been as bad if Texas's grid wasn't independent of the rest of the country, that same independence makes it easier to plan new capacity in Texas than anywhere else in the country, where the Environmental Protection Agency and other bureaucratic blockades slow the process. 

 

So which shall it be?  A stagnant, energy-starved, but green economy?  Or energy enough to power all those electric cars that people allegedly want to drive, and the AI server farms, and maybe even some old-fashioned hands-on factories that we've almost forgotten how to build?  The choice is pretty clear, although energy policy doesn't rank very high on this year's political agenda.  But it's something that affects the lives of everyone in these United States, which makes it inevitably political.  And I only hope that the political process can handle it in a way that at least doesn't do a lot of harm.

 

Sources:  Mario Loyola's article "Our Coming Energy Famine" appeared on pp. 23-25 of the August 2024 issue of National Review.  I also referred to the websites https://www.utilitydive.com/news/entergy-proposes-gas-fired-power-plants-1200-MW/718036/, https://hir.harvard.edu/germanys-energy-crisis-europes-leading-economy-is-falling-behind/, https://www.eia.gov/energyexplained/electricity/electricity-in-the-us-generation-capacity-and-sales.php, and https://wtaw.com/small-nuclear-power-plants-to-be-built-on-the-rellis-campus/.

Cooking with Gas No More: Natural Gas Bans

 

When I was growing up in Texas in the 1960s, natural gas was cheap, abundant, and generally regarded as one of the boons of modern life.  For a time, my father even worked for Lone Star Gas, the local franchisee in Fort Worth.  We had a gas stove, gas floor heaters and space heaters, a gas water heater, and many people we knew even had decorative gas lanterns that looked like miniature street lamps standing on their front lawns, emitting a greenish-white glow from a gas mantle while consuming gas 24 hours a day, which was why the gas company promoted them so much. 

 

So when I read recently that New York City, Los Angeles, and even some entire states are moving to ban the installation of natural gas in new construction, I understood their reasoning, which is that fossil fuels need to be phased out in favor of renewable-energy-produced electricity.  But at the same time, I couldn't help but wonder what they're going to be missing.

 

Switching from gas to electric heating and cooking is climate-change-friendly only if that electricity is produced from renewable sources.  As of February of this year, about 60% of electricity in the U. S. comes from fossil fuels, 20% from nuclear energy, and only 20% from renewables (primarily wind, hydropower, and solar).  So even if we shut off every gas valve in the country (except those at power plants) and used electricity instead, we'd end up producing more greenhouse gases under present circumstances.

 

Why?  Because if you start with a given amount of heat energy from natural gas, it's more efficient to burn it right where you use it—in a stove or a heating furnace—than it is to burn it in a power plant, make steam with the heat, turn a generator with the steam, and transmit the electricity to the place you're going to use it.  So-called Carnot-cycle heat engines, of which a fossil-fuel-fired power plant is an example, inevitably have efficiencies less than 100%, so it will take more gas to make electricity that is then turned into heat, than it would simply to burn the gas where you need the heat in the first place.

 

Of course, as the electric grid moves away from fossil fuels, this argument will gradually lose force, but right now it's still valid to the degree that places banning new natural gas installations still derive some of their electric power from fossil fuels. 

 

A recent article in National Review pointed out that certain types of restaurants depend on gas stoves for cooking particular kinds of food.  Asian food cooked in woks and certain types of Latin-American food really need gas, according to some Los Angeles chefs who are facing costly conversions if the city cuts off their gas supplies.  I have cooked Chinese dishes in a wok on an electric stove, and it can be done, but it takes longer than it would with a gas stove, and I can see why Chinese restaurants favor gas flames for cooking everything except rice. 

 

Representatives of the American Gas Association oppose such bans, saying that it drives up costs for new construction while not yielding a clear benefit with regard to greenhouse-gas emissions. 

 

This is a more complicated problem than it looks like at first glance.  For one thing, some bans are set to phase in over a schedule that extends several years in the future.  And a ban only on new construction using gas means that the total mix of housing using gas will gradually decline rather than falling off a cliff.  At the same time, the fraction of electric energy made from renewables will probably rise.  So the benefits in terms of greenhouse-gas emissions are hard to calculate and lie mostly in the future.

 

On the other hand, people living in places that have enacted bans or propose retroactive laws that don't exempt existing gas users are going to be put at a severe disadvantage pretty soon.  Fortunately, exemptions are being considered for such cases, and there don't seem to be any Carry Nations of the anti-gas lobby going around shutting off gas lines without permission. 

 

This is an example of how difficult it is to factor what economists call an externality (such as air pollution or greenhouse gas emissions) into local regulations that affect the lives of individual people differently. 

 

Something similar happened when automakers began adding anti-pollution equipment such as catalytic converters to cars.  Only in that case, most of the rules applied nationwide, although California tended to take the lead, using its large car market to impose regulations on the rest of the country almost by default. 

 

However it happened, everybody who buys a car now pays a certain extra amount for the anti-pollution gear in order that everybody in a region (or the country as a whole) can enjoy clean air.  After a good amount of tussling, we worked that problem out, and are well down the road toward the ultimate goal of zero-emission vehicles, which electric cars achieve if you don't pay attention to where the electricity comes from (see the above discussion about sources of electric energy).

 

It's not possible to make gas stoves or furnaces that burn a lot less gas for the same amount of heat, or burn it in a way that doesn't contribute to global warming.  In other words, there's no such thing as a catalytic converter for a wok.  So in order to reduce the greenhouse-gas contributions of residential and commercial gas users, they just have to be eliminated, or at least banned from new construction.  And that is intrinsically a geographically-bound issue.

 

Not surprisingly, some states such as Utah have put a ban on gas bans—the state is acting to prohibit localities from banning gas appliances.  Here in Texas, I haven't heard anybody promoting bans on natural gas, not even in the bluest part of Austin.  It's just too much a part of our regional DNA to turn our backs on something that was foundational to the prosperity of the state, and to a large degree still is. 

 

But that's the beauty of federalism—we don't all have to do things the same way.  Berkeley and New York City can make do with electric-range kung-pao chicken (it is possible), and Texans can still say good-by to their evening guests by the light of a gas-mantle yard lamp.  Only in America.

 

Sources:  The article "Gas Stove Bans Are Starting to Look Racist" appeared on the National Review website at https://www.nationalreview.com/the-weekend-jolt/gas-stove-bans-are-starting-to-look-racist/.  I also referred to an article in the Stateline blog section of the Pew Trust website at https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/01/06/natural-gas-bans-are-new-front-in-effort-to-curb-emissions.  The percentages of electric energy sources are from https://www.eia.gov/tools/faqs/faq.php?id=427&t=3. 

The Massachusetts Gas Disaster

Being one of the longest-settled regions of the U. S., the Commonwealth of Massachusetts has been home to gas utility companies for close to a century and a half.  Unfortunately, some of the pipes installed in the 19th century are still in use in older parts of the state, notably around Lawrence, Andover, and North Andover in the Merrimack Valley north of Boston.  So earlier this month, Columbia Gas of Massachusetts, the gas utility serving the area, announced that it was going to start replacing some older gas lines. 

On Thursday afternoon, Sept. 13, residents of these towns would have been justified in thinking that they had suddenly been transported into the midst of a bad horror movie.  House after house exploded and caught fire.  The Massachusetts State Police logged over 30 calls reporting fires, and by Saturday authorities counted over 60 suspected gas fires in the area.  When one house exploded, its chimney toppled over onto a car, and one teenager in the car later died of his injuries.  Twenty-five people suffered injuries, some serious.

As soon as the scope of the disaster was known, authorities shut off gas and electric utilities to the areas affected and ordered an evacuation, which lasted in some cases until Saturday.  Citing Columbia Gas’s lack of cooperation, Massachusetts Governor Charlie Baker said he was replacing Columbia Gas with another utility, Eversource, to lead recovery efforts, and declared a state of emergency in the region. 

A thorough understanding of what went wrong in Lawrence will have to wait for the results of investigations by local, state, and Federal officials, including members of a National Transportation Safety Board team that were dispatched to the scene.  Nevertheless, similar incidents have happened before, and their history is better known.

In the early days of gas utilities, gas was manufactured typically by the destructive distillation of coal and stored in large accumulator tanks at close to atmospheric pressure.  Only enough pressure to send it through distribution pipes and gas meters was used, and the delivered pressure was so low it was measured in inches of water, rather than pounds per square inch (PSI).  About 7 inches of water was the standard delivery pressure then, and it remains so today—equivalent to about 0.25 PSI.  Such a low pressure reduces requirements on residential piping and means that even a wide-open pipe is not going to leak enough gas to form anything more than a moderate flame.  I have seen a gas utility worker at a work site in my neighborhood street leave a delivery pipe open and unattended for a few minutes, with no apparent concern.

But by the same token, systems designed for such low pressure behave badly if by some mishap a higher transmission-line pressure reaches them.  For transmission over long distances, pressures ranging in the 50 to 100 PSI range are used to deliver gas to substations, where pressure regulators lower the pressure to the low levels needed at customers’ houses. 

Experts agree that somehow, a pressure greatly in excess of the normal 0.25 PSI was mistakenly connected to the distribution system in Andover, North Andover, and Lawrence.  The exact effects on each home depended on what kind of appliances were connected and operating at the time.  Fortunately, the weather was mild—highs in the 70s, lows in the 60s—so probably few domestic heating systems were being used.  Still, older furnaces and stoves use pilot lights, and one official was quoted as saying with enough pressure, a pilot light can turn into a torch.  Minor flaws in piping that would withstand 0.25 PSI may give way under higher pressures, resulting in major leaks of gas that can be triggered by an electric spark, a burning candle, or other source of ignition.  Out of the many hundreds of homes serviced by Columbia Gas in that region, some 60 or so suffered either major leaks or fires and explosions as a result.

When I lived in Massachusetts for a time after growing up in Texas, I noticed a rather widespread prejudice against gas for domestic heating, as opposed to either electricity or heating oil.  I encountered more than one person who said they would never buy or rent a place with gas, simply because of the danger.  Having grown up in a house heated with gas floor furnaces and space heaters (most of which would be too dangerous to install in new construction today), this attitude struck me as strange.  But Columbia Gas has not done its industry’s reputation any good by first allowing this accident to happen, and then by failing to take quick, decisive public actions to mitigate the disaster.  Columbia Gas’s parent company NISource saw its stock price fall 12 percent on the Friday following the disaster, an unusual occurrence for a generally conservative investment such as a fully-regulated utility firm. 

Environmentally speaking, the use of natural gas for domestic heating is more efficient than electric heating, even if natural gas is used to power the electric generation plants.  It can be argued that in making so many new natural-gas discoveries over the past decade, the U. S. has done more in recent years to replace higher-carbon-emission oil with natural gas than any other nation, thus decreasing the world’s carbon footprint. 

But these arguments will not console those who have lost loved ones or property in the Massachusetts gas explosions.  I wouldn’t blame them if some of them return to what is left of their homes and rip out all the gas lines completely.  I can also imagine the troops of lawyers who must be descending upon the region to file lawsuits against Columbia Gas and anyone else with deep pockets who might have been involved.  There is justice in compensating victims for their losses to the extent possible.  A trust has been betrayed when a utility’s normally benign facilities suddenly turn into engines of fire and destruction.  It will be interesting to learn what combination of mechanical failure, lack of understanding, and management errors led to this tragedy.  But even if we learn everything there is to know, that won’t fix the death and damage that resulted from it. 

Sources:  I referred to articles carried by CNN on Sept. 14 at https://www.cnn.com/2018/09/14/us/massachusetts-explosions-fires/index.html, the Boston Globe at https://www.bostonglobe.com/metro/2018/09/13/explosions-cause-unclear-but-specialists-point-gas-pressure/1EyRYFCahN7rZbqodpSxBM/story.html, and Fortune (a Bloomberg News story) at http://fortune.com/2018/09/14/gas-explosion-massachusetts/, as well as Wikipedia articles on natural gas and Lawrence, Massachusetts. 

Do You Smell Gas? Thank New London

On Thursday, March 18, 1937, a seventh-grade girl named Sibyl sat in a school bus outside the junior-senior high school building built four years earlier in the unincorporated town of New London, Texas.  In contrast to the rest of the nation, New London and the surrounding area of East Texas were prospering from a local oil boom, and many of the school's students came from families drawn to the area by oil-field jobs.  Sibyl had mistakenly left her class early, but rather than go back inside and look foolish, she had decided just to wait in the bus until school let out for the day in another twenty minutes or so.  Suddenly, at 3:17 PM, she saw the entire front of the building rise several feet into the air and then collapse into a huge pile of dust with a thunderous crash.  She had just narrowly escaped what turned out to be the worst school disaster in the history of the United States.  Over three hundred children and adults died either in the explosion itself or as a result of injuries they sustained in it.  The cause?  Odorless natural gas.

As you may know, natural gas has no characteristic odor of its own.  By law, a malodorant must be added to natural gas for non-industrial users such as homes, businesses, and schools so that a leak will call attention to itself by means of smell.  One of the compounds used, butyl mercaptan, is so stinky that the average human nose detects it at a level of 0.33 parts per billion.  That concentration amounts to one teaspoon of malodorant in a cube of air about 25 meters (80 feet) on a side.  While gas leaks and explosions still occur, the chances of detecting a leak before it causes an explosion are much better when the gas contains a malodorant. 

Flammable gas has been used for domestic light and heat since the early 1800s, but until the discovery of large supplies of natural gas, piped-in gas was a relatively costly type of utility that was confined to cities.  By contrast, the oil wells around New London freely produced so much natural gas that it was (and still often is) considered a waste product, and was flared off near wells in towering flames that burned day and night and could be seen for miles.  The oil companies piped some of it around in what were called bleed-off lines to supply power for their own operations, and because many of New London's residents were already familiar with oilfield equipment and piping, tapping a nearby gas line for free raw natural gas became a common practice.  Although it was technically illegal, someone with the requisite skills could install his own private gas line to an oil lease's bleed-off line, and enjoy free gas instead of paying the local gas utility for it. 

It is a matter of record that a couple of months before the 1937 explosion, W. C. Shaw, superintendent of the New London schools, authorized a janitor to disconnect the schoolhouse from the local gas utility and tap a nearby bleed-off line instead.  Mr. Shaw apparently viewed this as a cost-saving measure, similar to the earlier decision when the school was built to forego the usual steam-boiler-radiator heating system, and instead install an extensive gas piping system and some seventy gas space heaters instead. 

In My Boys and Girls Are in There, a recent book on the tragedy, historian Ron Rozelle notes that many subsequent summaries of the disaster tend to blame Superintendent Shaw for endangering the lives of his charges with the decision to use free untreated bleed-off gas.  The critical question, which Mr. Rozelle doesn't answer in the book, is whether the local gas company was adding malodorant to its product at the time.  Such a practice was widespread by 1937, but by no means universal.  If the utility's gas was odorless as well, then the decision to switch to bleed-off gas made no difference, because the leak that caused the explosion would not have been any easier to detect.  The main reason that the explosion was so severe and extensive was that the poured-concrete school building had a single, poorly ventilated, and uninterrupted crawl space beneath the entire front part of the building, under eight inches of solid concrete floor.  Since natural gas (primarily methane) is lighter than air, this crawl space formed a good container for thousands of cubic feet of gas, which was touched off on that fatal day when a shop teacher switched on an electric sander in the basement. 

While the New London explosion dominated national news for a week or so, it faded quickly as other events diverted the public's attention.  Like war veterans often do, survivors of the explosion usually refused to talk about it afterwards.  However, one survivor, fifth-grader Carolyn Jones, had the courage to make a speech to the Texas House and Senate in Austin only a week after the explosion, urging that safety measures be passed to prevent another disaster like the one at New London.  The result?  Two laws:  one requiring all natural gas for domestic purposes to contain a malodorant, and the other requiring that anyone working on residential natural-gas lines for residential use must be trained and certified for such work by the state of Texas.  The publicity of the New London disaster furnished ammunition for the passage of similar laws in other states, so that eventually, all natural gas sold for household use would carry its own portable detection system, namely, a bad smell.

The New London explosion and its aftermath form a familiar pattern:  first an innovation (the use of natural gas for domestic gas supplies was fairly new in the 1930s); then a tragedy resulting from inadequate safeguards, ignorance, or other factors; then regulations, or a change in good engineering practices, or both, all inspired by the tragedy.  It would be nice if engineers were able to anticipate everything that could go wrong in a novel situation.  But human ingenuity being both fallible and limited, sometimes we have to learn from mistakes, and the more costly the mistake in terms of lives, the faster we learn.  While nothing will ever bring back those three hundred lives lost on that East Texas afternoon seventy-six years ago, it is some comfort to know that their lives were not lost in vain, and that gas users around the globe are safer as a result. 

Sources:  I thank Andrea Nelson and Stephen Paul for bringing my attention to Ron Rozelle's book My Boys and Girls Are in There (College Station:  Texas A&M University Press, 2012), which I relied on for most of the material in today's column.  I also referred to the Wikipedia articles on the history of manufactured gas, thiols, and tert-butylthiol.