Manhattan Institute: Natural Gas Outshines Solar, Blows Past Wind

Gas Exports - GordonTomb Reports Gordon Tomb
Senior Fellow, Commonwealth Foundation for Public Policy Alternatives

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Gordon Tomb, relates some recent findings by the Manhattan Institute; findings demonstrating natural gas outshines solar and blows past wind in practicality.

Natural gas, not alternative sources, is by far the best investment for the production of electricity, according to a recent report by the Manhattan Institute.

Manhattan InstituteAccording to the report, investing in a drilling rig will produce enough natural gas to generate 16 times as much electricity as the same amount invested into solar panels and 8 times as much for the same investment in windmills:

“At today’s costs, $1 million invested in a modern wind turbine will produce, over 30 years of operation, about 50 million kWh (kilowatt-hours). And $1 million spent on utility-grade solar panels will produce about 25 million kWh over 30 years. Meanwhile, $1 million spent on a shale rig will produce enough natural gas to generate 400 million kWh over the same 30 years”

These numbers should give pause to policy makers inclined to dump more taxpayer subsidies into solar and wind or to discourage investment in gas development with abusive taxes and unnecessary regulations.

Gas-fired generation simply is more available than alternative sources.  A new gas-fired generating plant can operate as much as 90 percent of the time, compared to solar and wind, which have run at 17 percent and 29 percent, respectively in the Mid-Atlantic region.

The difference in efficiencies likely will get only greater, according the Manhattan Institute. The production of shale gas — like that found in Pennsylvania’s Marcellus deposit — is still in its early stage of development:

“With digital gas and oil technologies still in the early days, we can expect to see the rapid progress of drilling productivity (energy output per rig) continue. Output per rig (wherein rig costs having remained relatively constant) is doubling every three years. Last year, rig productivity jumped from 30% to 40% across the various shale plays. No other energy source is experiencing technological progress on this scale.

“Digital technologies are squeezing more money from rocks. While shale tech, like all technologies, will reach physics limits, the data make it clear that those limits are still a long way off. The underlying geophysics points to a roughly 500% gap between what today’s shale tech can extract and what nature ultimately permits. EIA’s (Energy Information Administration’s) “high tech” forecast envisions natural gas production increasing more than four times as much in the coming two decades than it did over the past two.”

Meanwhile, solar and wind are near their physical limits of operational efficiency, says the institute:

“Solar arrays and wind turbines are so efficient now that they are approaching the point where there is no more energy in the wind or arriving from the sun to be converted into electricity.  Thus, one sees underlying progress in improving efficiencies now measured in single-digit percentages.”

The Manhattan Institute says future growth of the alternative sources rests largely on “public tolerance for subsidies.”  Gas use, on the other hand, is almost certain to grow because of its efficiencies and increasing demands for electricity at home and abroad. Foreign demand is expected to increase over the next two decades by an amount equal to adding an entire U.S. grid, according the institute.

Political leaders should be facilitating the development of Pennsylvania gas to take advantage of the opportunities, not creating obstacles such as severance taxes or directing public resources to marginal technologies such as solar and wind that provide less than two percent of world energy.

Note: Gordon Tomb is a senior fellow at the Commonwealth Foundation, a think tank that promotes free-market solutions in public policy.

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One thought on “Manhattan Institute: Natural Gas Outshines Solar, Blows Past Wind

  1. Great article. Well written and easy to understand. It is so elementary, maybe even politicians can understand it…maybe. Of course, if they’re getting their palms greased by the anti’s, then the facts don’t matter.

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