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The Cost of Natural Gas

Will low natural gas prices slow the installation of innovative technologies designed to decrease reliance on natural gas?  Approximately 90% of an ethanol plant’s energy consummation is in the form of thermal energy.  Steam is needed for starch conversion distillation and evaporation.  Thermal energy is typically produced from natural gas.  Some ethanol plants have installed biomass boilers, gasifiers, anaerobic digesters or heat exchangers to reclaim waste heat; all with the purpose of reducing the amount of energy used per gallon of ethanol produced.

But ethanol plants are businesses and regardless of their interest to be as “green” as possible, staying out of the “red” and in the “black” are colors that often, for good reason, take priority.  Energy costs are second only to feedstock costs, so new technology designed to reduce energy consumption must also make economic sense.

Natural gas prices are expected to remain low for quite a few years, perhaps a decade or more, and then gradually increase.  This trend will likely play a significant role in decisions to innovate in ways that decrease the need for natural gas.  These technologies will have to directly compete with natural gas, absent state or federal policy geared toward reducing reliance on fossil fuels.

©2022 MICHAEL BEST & FRIEDRICH LLPNational Law Review, Volume I, Number 327
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About this Author

Energy and infrastructure powers our economy. The firm’s Energy Team is a leading legal practice serving the entire energy industry. Our multi-disciplinary team possesses an industry-leading knowledge base needed to effectively advise clients on the development and management of all power sources including the expanding sources of renewable energy, including biofuels, biomass, biogas, solar and wind as well as the development and management of the infrastructure that connects energy and the economy. 

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