T Boone's gonna love this

How to shut down 93% of coal without building new plants or reducing power supply 27

Two interesting observations:

  1. 50% of U.S. power generation (in MWh) comes from coal, while only 20% comes from natural gas.
  2. 32% of total U.S. power generation capacity (in MW) is coal-fired, while 42% is gas-fired.

When it runs, the natural gas fleet emits just 50% of the CO2 of the coal fleet, which raises a rather interesting question: what would we have to do to make it run harder? And how big a difference would that make in our national CO2 footprint?

MW vs. MWh

So why, if we have more natural gas generation capacity, do we get more of our power from coal?

Simple: we have a lot of gas-fired generation (449 GW, as of 2007), it doesn’t run very often. The coal fleet is comparatively smaller (336 GW), but runs a lot more frequently. It is as if our vehicle fleet were dominated by Priuses, but they stayed parked while we drove our Escalades to work.

We have a huge resource that is already built that could massively lower CO2 emissions. Taking a page from the NRA, what if the problem isn’t that we need to build more low-carbon generation, but that we just need to make better use of what we have?

Environmental potential

To understand the opportunity, let’s look at a bit of simple math.

In 2006, the gas fleet generated 816,441,000 MWh, or 20% of what it could have produced if it had run 24/7/365.

The coal fleet, by contrast, generated 1,990,551,000 MWh, or 68% of what it could have generated if it had run 24/7/365.

If we never built another gas-fired power plant, but simply increased the annual capacity factor of the gas fleet up to the coal fleet’s 68% capacity factor, it would generate an additional 1,845,485,000 MWh, effectively displacing 93% of our coal fleet without the construction of a single new power plant.

Looking at the comparative CO2-signatures of those two fleets, that would reduce total power sector CO2 emissions by 37%. Since the power sector is responsible for 42% of U.S. CO2 emissions, that implies a 16% reduction in total U.S. CO2 emissions, just from changing generator dispatch order.

That’s a massive opportunity. What would it take to get there?

Economic considerations

There is an obvious limitation to the Prius/Escalade analogy: it’s cheaper to drive a Prius per mile, but it’s more expensive to generate a MWh of power from a gas plant than a coal plant. That, after all, is why the gas fleet doesn’t run as often.

But historic dispatch choices were made in a world in which the costs of CO2 pollution were not monetized. So the real question becomes: how big a CO2 price would be required to change dispatch order?

Intriguingly, while the environmental potential is huge, the economic cost to realize that potential turns out to be quite small.

The great economic disadvantage of gas-fired generation relative to coal is that gas is more expensive per unit of energy. The great economic advantage of gas-fired generation relative to coal is that it is more fuel efficient: while the U.S. coal fleet has an average generation efficiency of about 27%, the gas fleet has an average efficiency of about 38%.

The gas fleet also tends to have much lower non-fuel operating costs (less $ for fuel handling, fewer moving parts, etc.). Taking these factors into consideration—and assuming $2.50/MMBtu coal vs. $6/MMBtu natural gas—the variable costs (e.g., exclusive of capital recovery) of a coal plant are about $18/MWh lower than a gas plant (1.8 cents/kWh). Obviously, that is very sensitive to fuel price assumptions, but this range is hardly unreasonable for current markets.

But remember, the gas fleet has a much lower CO2 signature than the coal fleet. On a fleet average basis, every MWh shifted from coal to gas reduces CO2 emissions by 0.56 tons. So if we look at a $18/MWh cost differential to achieve 0.56 tons/MWh of CO2 reduction, that implies a (18/.56) = $32/ton CO2 price would be sufficient to tip the scales. That’s not insignificant—but not implausible either. And—here’s the key point—massively less than what any reasonable person might think it would take to shutter most of the coal industry.

Finally, note that this doesn’t require a carbon price of $32/ton to happen; it simply requires a net change in the relative costs of coal and gas-fired generation equal to $32/ton. You could get there by giving the gas guys nothing and hitting the coal plants with a $32 fine, but you could also get there by giving the gas guys $10 and hitting the coal guys with a $22 fine. A functioning cap-and-trade with bilateral rights will allow some sort of transaction between those two parties and—without speculating on those specific rules—one can assert with confidence that a $32 delta between coal and gas does not need anyone to buy or sell carbon credits at a $32/ton price.

Practical constraints

To be sure, we’re never going to shut down 93% of the coal fleet just by running gas harder. There are parts of the grid (like West Virginia) so devoid of gas assets that there’s no way to maintain voltage stability if you rely on far-away gas. And of course, there is the supply and demand issue (booming gas demand + slumping coal demand is almost certainly incompatible with $6 gas and $2.50 coal).

On the other hand, the gas fleet is hardly capped out at 68% capacity factor. Moreover, if we started the switch, we’d start by running the most efficient gas plants harder and the least efficient coal plants less so the first 20% is much cheaper, per ton of CO2 reduction, than the last 20%.

Of course this isn’t a panacea. You can’t get to the end game only with gas any more than you can get to the end game only with solar. It’ll take a lot of steps. But what’s fascinating about this analysis is that the gas fleet is uniquely able to quickly and—at least initially—quite cheaply make a huge dent in our CO2 emissions. It’s a tool we ought to use, and we ought to examine our proposed CO2 regulations carefully to make sure it gets put to use. Free allowances to coal plants don’t get you there ...

Sean Casten is President & CEO of Recycled Energy Development, LLC, a company devoted to profitably reducing greenhouse emissions.

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  1. rufwork Posted 1:29 pm
    29 May 2009

    "Obviously, that is very sensitive to fuel price assumptions, but this range is hardly unreasonable for current markets."So no way to judge if there'd be a significant impact on the price of gas from the increased demand of maxing capacity?

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    1. Sean Casten's avatar

      Sean Casten Posted 5:42 am
      01 Jun 2009

      Rufwork,I'm sure there would be an impact - but predicting energy prices (beyond the obvious: more demand = higher prices) is more art than science.  Line up all the economists who predicted gas would go to $14 in 2006 and $4 today, and I'll put a lot more faith in economic forecasting...

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  2. adfasfdasfd Posted 1:40 pm
    29 May 2009

    Math to the rescue!

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  3. Ken Johnson's avatar

    Ken Johnson Posted 2:27 pm
    29 May 2009

    "Free allowances to coal plants don’t get you there ..." But free (output-based) allowances to coal and NG would (at a $32/ton carbon price). 

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  4. Gar Lipow's avatar

    Gar Lipow Posted 3:07 pm
    29 May 2009

    "Moreover, if we started the switch, we’d start by running the most efficient gas plants harder and the least efficient coal plants less". I'm glad you added that. A lot of unused gas capacity consists of peaking plants and operating reserves. For those purposes, utilties quite sensibly bought the least expensive plants per MW of capacity without regard for efficiency. From a climate perspective you probably don't want those particular plants suddenly running at high capacity. But you are right, there are some fairly high efficiency natural gas plants, constructed when natural gas was less expensive, that can use natural gas efficiently. Another short term possibility is to convert coal plants to run on natural gas. Not too expensive from a capital point of viev.

    However there are limits to using natural gas too. Although we still produce most of our natural gas,we import substantial amounts. We want to be very cautious about any increased use of natural gas that invoves more Liquified Natural Gas (LNG) imported in tankers. LNG tends to have a much higher combined leakage/spill rate than natural gas moved in pipelines. Since methane is a much stronger global warming gas than carbon, LNG (unlike pipeline gas) may have a life cycle emissions impact close to that of coal. This is controversial. Right now, there have been no third party studies - only dueling data from the tar sands and natural gas companies (with obvious conflicts of interest in both cases.) So I'd want to examine whether this involves increased use of LNG, and if so what the real life cycle impace of LNG is.

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    1. Clifford Wells's avatar

      Clifford Wells Posted 8:13 pm
      29 May 2009

      Good comments about peaking plants versus base load - and may I add that the old fashioned peaking NG units were gas turbine powered (like a jet airline engine), not Co-Gen natural gas boiler units.I'm not seeing that the US is importing or needs a bunch of LNG, one of the strange quirks of energy politics and economics.  There is a glut in domestic NG production right now and the infustry is shutting down NG production and drilling as fast as it can.  In fact, T. Boone Pickens lost billions on that gamble.  Minor point, perhaps a long-term one because the issue will come back some day.As to "converting" a coal power generating plant to NG, I tend to have my doubts.  True, NGs is often used to start a coal fired system, and as coal is introduced into the fire-ball in the boiler, the gas is turned off.  Due to how fire-ball mechanics work, a coal fired boiler really can't sustain a base load with NG without ripping out the entire boiler and getting a new one, tens of millions of dollars per 250 MW unit.  The reason as I understand it, is that natural has leaves different patterns of cool spots that can cause a coal boiler to crack, deform, warp, or even explode (there are reasons why nitrogen and argon tanks are at coal plants, for over-fire safety).I would be so bold as to say we should build lots of new base load NG units with high efficiency and better transmission lines, and not try to convert old units.  Of course, solar and wind power could be leveraged as well,  I would definitely reserve a few of the newer, very clean coal plants for peaking power such as if a major cold snap or heat wave impacted parts of our country.  It would be neat to see coal used only as "degree-day peaking power units" or in cases other units were down due to maintenance.  Your electricity bills would zoom up though, I'm just warning you.

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      1. Sean Casten's avatar

        Sean Casten Posted 5:45 am
        01 Jun 2009

        Clifford:For what it's worth, I'm not suggesting a solution, nor implying that we convert old coal plants.  I'm simply observing that there are lots of underutilized gas assets and highly-utilized coal assets.  Shifting that utilization factor (e.g., run the gas plants harder and the coal plants less) is therefore possible.  That's not incompatible with fuel switching in specific coal plants - but it wasn't my point.

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  5. Tatil Posted 4:27 pm
    29 May 2009

    In this information society as conscious as we can get positive results if we apply Tatil

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  6. Gar Lipow's avatar

    Gar Lipow Posted 9:59 pm
    29 May 2009

    "As to "converting" a coal power generating plant to NG, I tend to have my doubts".

    Don't know details, but its done in Europe all the time.

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  7. Sian Tan's avatar

    Sian Tan Posted 1:19 am
    30 May 2009

    Hi Guys,

    Just joined Grist. Great articles and discussions.

    I can shed a bit of light on what some of the Europeans are doing as my wife's side of the family comes from Germany.

    - Germany decided to close its coal mines in 2007.

    - The current energy mix in Germany: 22% nuclear, 24% brown coal, 22% hard(black) coal, 12% natural gas, 14% renewables & 6% oil & others.

    - The German environment ministry mandates that fully 33% of all plants in the next 15 years must be modernised (40 GW). Their goal is to halve the amount of GHGs produced by the coal plants. In addition, the renewable percentage in the energy mix to be achieved by 2020 is to grow to 30%.

    I guess it comes down to awareness and political will for us in the US. The coal lobby in Germany is screaming and kicking, but its what the people in Germany want. The closure of the mines will in effect force the coal industry to move to more efficient (cleaner) technologies, with some government Euros to help, of course. There's also a cultural element at play here - people in Germany love the outdoors and are good at keeping things pristine.

    How can we motivate people on our side to act in the same way? 

     

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  8. Teuthis Posted 7:40 am
    30 May 2009

    Didn't Grist recently run a couple of articles on the environmental impacts of natural-gas drilling?

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  9. Delay And Deny's avatar

    Delay And Deny Posted 9:10 am
    30 May 2009

    Simple solution...let the customer decide.Seriously, with today's integrated grid, I should be able to go to the PSE website here in Kent, WA and select whether I want to buy electricity generated by natural gas or from coal.   Even if the local power is provided by coal, I would be charged the equivalent price of what someone adding more capacity from a gas generator would be charged.It's the same logic as carbon credits. 

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  10. Atomicrod's avatar

    Atomicrod Posted 1:01 pm
    30 May 2009

    Here is a better thought - use high temperature gas cooled reactors like the HTR-PM that is currently under construction in China to replace the boilers in already built steam plants. http://tinyurl.com/d55myg

    That way, instead of simply transferring our dependence from one CO2 emitting fossil fuel that is produced by damaging large swaths of land through strip mining and mountain top removal to another CO2 emitting fossil fuel with a demonstrated history of extreme price volatility and known environmental hazards that are increasing with increasing use of technologies like 'fracking', you eliminate CO2 from the equation with a zero emission fission reactor.

    Of course, if your real motive for being an environmental activist is to promote the use of natural gas to enrich companies like ExxonMobil, Shell and Mesa Power (owned by T. Boone Pickens), you probably will not think much of my plan or the one advocated by Jim Holm at coal2nuclear.com.

    Rod Adams

    Publisher, Atomic Insights

    Host and producer, The Atomic Show Podcast

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  11. enviroperk Posted 3:33 pm
    30 May 2009

    I think the best use of natural gas in the energy sector is for on-premises heat generation (space heating, water heating) not plant-based electric generation. Gas combustion to heat generation is at least times times more efficient that gas-to-electricity-to-heat, from a power plant. ( Heat rate of power plant is only 33%,  less transmission losses of 9-10% etc VS 7% to 15% flu loss from gas heating)

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    1. Sean Casten's avatar

      Sean Casten Posted 5:52 am
      01 Jun 2009

      Enviroperk,It's more efficient to convert any fuel to heat than to power - such is the nature of the 2nd law of thermodynamics.  That's not a gas-specific story, or even really a heat vs. power story.  (Try running your computer on heat!)  We need heat and we need power.  An ideal world would cogenerate them both from a single fuel source - whether nuclear, fossil, renewable or some player-to-be-named-later. But be careful assuming that any fuel would be "better" used for heat; it's analagous to saying that we'd be better off using our nation's beef processors only to make chuck.  Yes, you get higher efficiency, but you end up losing a lot of T-bones, filets and higher-value cuts.  Ditto with a preference for heat.  Like it or not, we need electricity - our challenge is simply to make it with as low a fossil-fuel signature as possible.

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      1. enviroperk Posted 11:02 am
        01 Jun 2009

        Sean,My point is:Since we already have a very good natural gas distribution system for business and many residences in place, it would be beneficial ( on the order of 1/4 less co2 per btu/hr! ) to encourage the use of on premises natural gas for heating purposes. I believe the combination of space heating, water heating and clothes drying ( with out considering cooking) is a major part of residential and a significant part of commercial energy use. For these applications, a 70% + reduction in co2, is is significant reduction at NO additional cost!.Currently, my electric utility gives a discount on all of my electricty use if I have an all-electric home, while they merrily pass on the fuel cost adjustments and sell me natural gas produced peak power at 4 times the CO2 per Btu/hr!    

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  12. Atomicrod's avatar

    Atomicrod Posted 3:48 pm
    30 May 2009

    @Enviroperk - You reminded me of an important point about Mr. Casten's plan. The increased demand on natural gas supplies for electrical power production would lead to an inevitable increase in the price of natural gas for home heating and industrial production. Good for gas producers, bad for everyone else.

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    1. rufwork Posted 3:53 pm
      30 May 2009

      Hrm, seems like I read a comment to this effect earlier on in the thread.  ;^)  Follow the money, right?

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    2. Sean Casten's avatar

      Sean Casten Posted 6:01 am
      01 Jun 2009

      Atomicrod:To be clear, I'd hate to call this "Casten's plan".  I'm not advocating this path - simply observing that it's possible.  Noting that we have a massive excess of gas capacity, it's worth asking the question how big that tool is.  Whether or not we choose to use that tool and what the cost is is secondary - and one that I personally feel much less qualified to opine on. Note though, apropos of my comment to Enviroperk, that I would not personally advocate any plan that shifts inefficient use of one fossil fuel for another.  At best, this is a bridging strategy - but it's a hell of a big bridge.Note also that I have no disagreement with you that this would increase the price of gas (as noted by the first commenter).  The question at hand is whether - in a world that is preparing to put a price on CO2 emissions - that price increase on a $/ton of CO2 reduced basis is acceptable / on a par with $/ton costs we are prepared to pay for other strategies.  The simple math above suggests it may be, at least in small doses, for the simple reason that all the capital has already been built. Indeed, gas prices would have to increase massively for this to be less expensive on a $/ton basis than new-build nuke, solar PV or coal with CCS.  Without getting into a debate of the relative merits of those options, it simply suggests that this asset-switching strategy deserves equal consideration.  And indeed, would receive equal consideration in a world that priced CO2 on a technology agnostic basis and let capital flow accordingly.

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  13. neosapiens Posted 6:27 pm
    31 May 2009

    If Mr. Pickens is right about the coming natural gas bonanza from shale deposits that have just become pratical to exploit, an aggressive, temporary, shift in favor of natural gas usage would be a cost-effective way to reduce CO2 emissions.  And much cheaper and quicker than building nuclear plants.  it's true that the environmental impacts at natural gas drilling sites need to be addressed.  From what I've read about it, it sounds like the gas companies know what to do, but haven't been pushed hard enough to make the changes in equipment and day to day operations that would reduce the air quality effects of their drilling and servicing.Here's another idea:  If we can so easily decomission coal plants, how about a federal program to buy the dirtiest coal plants and decomission them?

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  14. Biodiversivist's avatar

    Biodiversivist Posted 8:11 pm
    31 May 2009

    I just read an article in Science that claims solar is now cheaper
    that peaking gas plants:http://biodiversivist.blogspot.com/2009/05/hsa-future-of-fusion-solar-power.htmlI have also noticed that our garbage and recycle trucks all run on natural gas. Maybe the fuel needed to bridge between renewable and fossil fuels has been sitting right  under our noses.

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    1. Sean Casten's avatar

      Sean Casten Posted 6:13 am
      01 Jun 2009

      Biod,The solar v. gas comparison doesn't wash.  Would need to see the data, but it looks very much like an apples:oranges comparison to me.  First, as noted, our gas fleet is overbuilt, so the cost of a bringing on a new natural gas peaker (in much of the country) is simply the cost of running the gas, while the solar plant requies new capital construction.  Second, solar is heavily subsidized while gas is not (at least not directly).  As such, when the economic match from an owners perspective, it means only that we've shifted costs elsewhere in society.  That's not to suggest that we shouldn't encourage solar - just that if we don't look at full social costs of any option, we're misleading ourselves.  (And yes, we should be doing that for gas as well!)  Finally, a MW of solar isn't = a MW of gas peaking, because of renewable intermittency issues.  A colleague of mine who used to work in a wind-intensive utility tells me that for wind, they assumed that they could rely on less than 20% of the total wind capacity to be there from a capacity planning perspective (e.g., if they knew their peak load was 20,000 MW and they had 5,000 MW of wind installed on their system, reliability considerations drove them to find 20,000 - 5,000 x .2 = 19,000 MW of other generation to serve load).  Solar suffers from similar problems - although I don't know what the precise factor would be.  As such, using solar to serve peak loads either requires an overbuild of solar or - more likely - an additional purchase of conventional peakers to "top up" peak demands.Bottom line in all cases is that I don't see any societal logic yet for solar being cheaper than peaking gas. Re: garbage trucks - now you're sounding like T Boone! The only comment I'd add to that is an observation from my (way back when) days as a consultant.  We did some work for the European natural gas vehicle ass'n and came to the conclusion that if you believed that we could shift society to one that depended on hydrogen as a transportation fuel, we ought to be able to get to compressed natural gas more quickly, which retained many of the benefits but with less cost and risk.  However, that's sort of like saying that if you can plan for a manned mission to Mars, it's comparatively easy to plan for a manned mission to the moon...Natural gas - like hydrogen - is amenable to fleet-scale roll outs, where you need build only one fueling station / infrastructure and can standardize much of your system.  But it's a huge leap from there to a national transportation fuel.

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      1. Biodiversivist's avatar

        Biodiversivist Posted 9:53 pm
        01 Jun 2009

        No arguments from me except some vehicles, like garbage trucks with fixed routes that return to the maintenance yard every day to refuel, are good candidates for natural gas. I would expect buses to also be good candidates. Sure beats diesel or biodiesel.

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  15. Sean Casten's avatar

    Sean Casten Posted 11:25 am
    01 Jun 2009

    Enviroperk,Ah... the all-electric tariff.  Cute things those, eh?  Shortly after college, I rented a condo for the season with a bunch of friends in VT so that we could have a place to get together and ski on weekends.  The condo was built in the 80s, just as VT Yankee was coming on line and with the promise of power that would be "too cheap to meter" and utility breaks for all-electric service, they put in electric heaters.  Needless to say, the future didn't quite play out as predicted... Short version of the story is that we paid more for 3 months worth of heat that winter than paid for rent.  (I still can't figure out why the utility thought it was worth their $ to send us electric bills!)Without question, we are vastly better using ANYTHING than electric power to make heat.  For the same reason that it's a bad idea to use filet mignons to make chuck.  But for what it's worth, the trend line is already pretty robustly away from electric heating, for obvious economic reasons.  What made sense in the 70s and 80s when we were blessed with ample hydro, low marginal cost coal and the promise of cheap nuclear is fully inverted today.  A cause for some optimism that in the long term economic logic prevails.  And as Keynes said, in the long term, we're all dead...

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  16. camilo Posted 2:53 pm
    02 Jun 2009

    At it's core, this is really a good idea, especially when wrapped up to a simple 20% for 20% exchange:  more gas-generated power and less coal-generated power at any given time.  There is obviously a lot to hash out, but anything that uses existing infrastucture and has immediate effect would be a good thing. We are going to be paying a lot more for power anyway, and this just makes sense.One thing we don't hear enough about is to simply use less; the immediate impact can be tremendous, but we are just too spoiled.  Austin currently has a controversy raging, bordering on scandalous, in that the city claims it can longer fund the Trail of Lights at Christmas time.  This is an abomination that needs to go anyway.  People are looking at alternative funding, perhaps private, perhaps corporate, and for what??  A many-days-long celebration of electric light bulbs all burning at once, with long lines of idling cars waiting for their turn to drive thru the trail of lights.  This means closing city streets, paying over-time for the extra police, traffic barricades, all that, plus effectively closing the park at Auditorium Shores for all other uses.  And how does this relate to Christmas?  Oh, yeah, spend/waste/consume.  And I am not against Christmas, we all love the baby Jesus.There is another tradition, a private trail of lights on 37th street that predates the official, city-run trail.  Same story, long lines of cars idling for their chance to drive through a 2 1/2 block long residential corridor (where the residents are pressured into joining in) in which the idea is to out-do each other with outrageous electric Christmas displays.  The power company brings in extra transformers for that month.  There is one house whose claim to fame is the meter itself which is extravagantly festooned and one can walk up to this "altar" and watch the meter wheel whiz round and round.Ridiculous to think we can afford this, much less want to do it.  And I forget the mix, but Texas juice is mostly coal.For years, natural gas in America was flared as a waste product of oil production, perhaps still in some areas.  This is still being done in much of the developing world, by the oil giants.  Read up on the Shell-in-court story.  The gas flares in Central Russia can be seen from space in the the National Geographic's "the Earth at Night" map.  The first time I saw it, I got a distinct impression that for most Americans it would serve as a source of pride:  look at how bright our lights are, not even Europe (just as saturated, but kinda yellowish) can compare. I, too, would like to see some figures on LNG costs and dangers.  I think we should capture it all and use it in greater proportion while we work on getting off of fossil fuels entirely.  Beginning by phasing out the dirtiest, and NOT developing oil shale and tar sands.Oh, yeah, no nukes. . . 

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