Coal, Oil, Natural Gas Oh My!

by Handsome Matt

We’ve hit on this before, but sometimes it is important to recap.

Coal power plants operate at about a 30% efficiency

Oil, refined to gasoline for your car operates at a 15% efficiency

Natural gas swings between 20-40% efficiencies.

Not bad, but given the amount of pollution; not great. Natural gas wins out of these three, as well it should. I like natural gas, it works great and lends itself to incredibly efficiencies.

Solar panels swing from 15-40% depending

Wind turbines are comparable to solar and others, depending on design and windspeed.

Of course though, we need to look at another factor: Cost of fuel

Oil (from 2006 to today, from the NYSE) swings from $50.00 to over $100.00 a barrel translating anywhere from $2-4$ or more at the pump per gallon.

Natural Gas (From the US Energy Information Administration) has doubled in price in the last five years.

Coal, in just the last five years, has swung wildly from $179.00 up to $741.00 and then back again.

And this means what?

Wild swings in prices for dwindling resources (although our technological advances have extended this, along with a change in some habits) create a severe uncertainty in the market, and the swings will get greater and greater, with the highs getting higher, and the lows not quite as low any more.

Or we could look up. At the sun. Not directly though. That’s dangerous.

The sun will shine for the next few billion years, and the sun as we know powers the wind. Meaning the wind will be blowing for the next few billion years as well.

So here’s how the market will play out, with these supposedly too expensive and inefficient technologies:

Initially high prices. To recoup the initial investment in a new facility. This is no different than when any new plant or transmission equipment is built. See here, a brief from AEP explaining their application to recover costs from following clean air laws.

But then, for the next ten to twenty years, prices will drop. When a plant is updated or a new plant built (with more advanced, more efficient technologies) we’ll see price increases again, but due to inflation they won’t be as expensive. So on a long enough scale, prices will drop to near zero.

But By All Means

Continue to think that the wild, speculator-driven short-term profit markets are the most efficient ways to generate power. Just ignore the data, and cling to your supposed “free markets.”