Thurber speaks in DC on coal-gas competition
Program on Energy and Sustainable Development (PESD) Associate Director Mark Thurber was a panelist at the 2019 Energy Security Workshop in Washington, D.C., where he spoke about why LNG (liquefied natural gas) struggles to compete with coal. The event took place on May 29th and was jointly hosted by the National Bureau of Asian Research and the Woodrow Wilson International Center for Scholars.
The competitive disadvantage for LNG is twofold. First, LNG is almost always more expensive than coal. Second, the LNG value chain is more difficult to stitch together. The high cost of LNG infrastructure -- which includes liquefaction plants, LNG tankers, and regasification facilities at the receiving end -- means it will only be built if there is a creditworthy end-use customer willing to pay high prices for gas over a long period of time. But potential customers, for their part, are unlikely to build out gas-using applications until they are certain that gas will reliably be available. This value chain coordination problem is especially severe in countries with limited existing infrastructure for gas transportation and use.
The net result, Thurber concluded, is that LNG will struggle to gain ground against coal, especially for use in the power sector, until countries more explicitly factor environmental factors (where gas has a significant advantage over coal) into their energy markets. (Thurber discusses these and other challenges in replacing coal in his new book, Coal, which is available at https://www.amazon.com/Coal-Resources-Mark-C-Thurber/dp/1509514015)