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The shale gas boom shows how quickly our expectations about energy can be overturned, and shows the fallacy of trying to centrally plan the energy economy.

John Hanger has an interesting blog post up that discusses when the use of natural gas will outstrip the use of coal in the United States Hanger points out that:

This week the International Energy Agency estimated that, in the USA, gas may first surpass coal for a full year as early as 2017.  That would end a 100-year reign for coal atop the power generation market.

Yet, if 2017 becomes the first full year when gas generates more electricity than coal, when will the first full month be, when gas passes coal? Perhaps much sooner than later could be the answer.

Though coal will produce more electricity than gas for all of 2012, this summer may see a full month, in which gas generates more electricity than coal.  If it happens, it is most likely to happen in July or August. If it does not happen this year, it may not happen until 2015 or even 2016, since gas prices are projected to climb in 2013.

Factors that will impact whether gas takes over the number 1 spot for a full month this summer include the pace of coal retirements before July, the amount of new gas generation that comes on line by July, the rate of breakdowns for the nation’s coal and gas power plants in July or August, gas and coal prices, and whether high summer temperatures cause the very last available gas combustion turbine plants to fire up for a good number of hours to meet peak demands.

Hanger concludes:

The IEA, therefore, may be close to the mark in circling 2017 as the year when gas becomes—on a full year basis—the number 1 electricity generation source in the USA.  If so, even just 2 years ago, nobody would have thought that possible. Amazing.

Amazing is exactly the right word—the shale gas boom shows how quickly our expectations about energy can be overturned, and shows the fallacy of trying to centrally plan the energy economy. Read the full post here.