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Robert Bryce - Portrait
Robert Bryce – Manhattan Institute

Green renewable energy is the darling of a certain political set, green will lead the way to a flower-filled nirvana of chirping birds and flitty butterflies. In this Bold Interview, Robert Bryce of the Manhattan Institute points out that simple mathematics demonstrates the folly of relying upon renewables exclusively. Renewables simply do not have the capacity to become fundamental contributors to the energy grid in the near future, compared to options such as natural gas and nuclear.

“If you are anti-carbon dioxide and anti-nuclear, then you are pro-blackout. Well, I am anti-blackout,” Bryce states. He notes that the energy market is changing dramatically, especially since 2010, but the high yield energy sources continue to be carbon-based and nuclear.

“If you are anti-carbon dioxide and anti-nuclear, then you are pro-blackout. Well, I am anti-blackout”

Bryce notes that we are at an historical moment, regarding natural gas. The development of large scale LNG (liquefied natural gas) facilities has made it possible for gas to be traded and treated as a commodity for the first time. Prior to the development and construction of large LNG facilities for shipment, gas had to be delivered to industry and consumers through pipelines. It created a locally-controlled market. In regions where there was no regional demand for natural gas, the gas was simply flared off at the well.

The upshot was that natural gas prices varied dramatically worldwide. If there was no accessible pipeline, it was often simply too expensive to add into the regional energy mix. There was excess supply in some regions and too little in others.

This is all about to change as a network of LNG shipping facilities are completed all over the world. The United States opened the first LNG exporting plant in the 48 contiguous states at the Sabine Pass facility in Louisiana. Their first shipment went to Brazil in February of last year. The United States has even shipped natural gas to energy-rich Kuwait, an event which Bryce describes as “unprecedented in the history of the global energy business.”

LNG facilities liquefy the natural gas by cooling it to minus 162 degrees Celsius, reducing the volume of the gas by 600 times. The gas can be stored at this extreme cold and density until it is needed, at which time it can be transformed into a gas again.

The promise of the LNG industry laid tantalizingly upon the horizon for some time. Only in the past decade has it become a reality. Natural gas is one of the cleanest burning forms of carbon, but the transportation challenges made it more of a supplemental form of energy on the global market, rather than the primary source. LNG could not be a global commodity until the cooling and shipping facilities were built, as well as the ships and storage facilities. All of these pieces were necessary to allow for a truly global market in natural gas. What we are witnessing right now are just the first small steps in what will become a revolutionary change in energy, over the next several years facilities for LNG shipping will come online worldwide.

In the interim, there is sure to be a great deal of volatility in the natural gas market, as traders adjust to the new landscape. What was once a local or regional market with long-term stable contracts is now about to become global and volatile.

US LNG ExporterThe United States is well-positioned to become a major player in the natural gas market. Exports are expected to increase over the next two decades. Already, with natural gas added to the mix the United States is likely to become a net energy exporter by 2018. This is a very fast change from our net importer status which had prevailed for decades.

Energy resources, flexibility and variety are some of the great strengths of the United States economy that has economists bullish on the future. Few nations have such a diverse mix of energy resources, and most lack diversity in delivery mechanisms. This places the United States in an ideal position for growth in the decades to come.