Steyer Hits Natural Gas Prices to Advocate for Full Phase-Out

'We shouldn't spend any more time investing in natural gas infrastructure'

Tom Steyer / Getty Images
November 29, 2018

California billionaire and political activist Tom Steyer used November volatility in natural gas prices to advocate for a phasing out of the fuel to be replaced by wind and solar technologies.

"The real point is that over the last year, natural gas prices have spiked up really dramatically," he says on the video he tweeted out. "They've gone up by more than 50 percent, they're up 30 percent this month. And so what that means is that Americans are going to be spending more to heat their houses this winter if they generate their electricity from natural gas."

"I think the other point is that the benefits of solar and wind, which are free, become even greater compared to natural gas when natural gas prices go up."

After saying he thought prices would continue to rise over time, Steyer said, "What that means for the United States is we shouldn't spend any more time investing in natural gas infrastructure."

"From now on, our best bet by far is to invest in renewable resources, which is solar and wind, and let the fossil fuel technologies be what they are and belong to what they belong to, which is the past."

Steyer has long advocated for increased usage of wind and solar, and has promoted ballot initiatives at the state level which would have increased their usage as well.

However, the comments would be a remarkably bold policy position for a presidential candidate, which Steyer is now widely believed to be after taking out a full-page ad in USA Today, although he has stopped short of giving a full, positive confirmation of his candidacy.

Steyer is not wrong about natural gas prices being up 30 percent this November, but the fuel is also not above any highs the commodity has traded at in the last 10 years, meaning Americans are not spending more now than at any other time in the last decade. Today's prices are still lower than nearly all other price levels from 2003 to 2008, a period after which prices plunged.

Natural gas is also primarily credited with a 14 percent decrease in carbon dioxide emissions in the U.S. from 2005 to 2015, according to a report from the U.S. Energy Information Administration.

A paper published in Environmental Science & Technology last year noted that even without federal carbon dioxide regulation, 2017 carbon output levels nationwide were already meeting the targets set for 2025 emissions by the Clean Power Plan, with natural gas receiving the lion's share of the credit for that achievement.

Despite President Trump pulling the United States out of the Paris Agreement, the same paper concluded that the nation could nevertheless still meet the agreement's goals and that "policies that encourage low natural gas prices are beneficial" to that end, along with a mix of other policies and fuel technologies.

Steyer also repeated the mantra that wind and solar are free. Both technologies require significant upfront capital costs for the manufacture and installation of the solar panels and wind turbines. Additionally, many energy experts argue that because wind and solar are intermittent power providers—they can only provide when the sun shines and the wind blows—the costs of "baseload" power which must be provided by on demand sources like coal and natural gas will naturally have to increase as renewable technologies gain greater market penetration.

From a presidential standpoint, Steyer's remarks also raise questions about the use of the fuel globally, the ability of the United States to be a provider to international markets through liquefied natural gas, as well as how recent discoveries of gas basins and recovery technologies like hydraulic fracturing (also known as fracking) have contributed to other international security concerns.

For example, a speech in 2015 by Colorado Governor John Hickenlooper, someone also thought to be a presidential aspirant for Democrats in the next election, noted that the discoveries of new deposits offshore of Israel along with fracking have given the nation more political stability in the Middle East.

"Israel is achieving energy independence with their offshore discoveries, Tamar and Leviathan. What that really means is that OPEC [Organization of Petroleum Exporting Countries] is the past, and their leverage over the economies of the world has been significantly diminished."

Liquefied natural gas is becoming an increasingly successful export for the U.S. A recent report from Forbes said "2019 will be the most significant year ever for the U.S. liquefied natural gas export business," adding that the upcoming year would be "the beginning of the boom."

A representative with Steyer indicated they would not be able to provide comment prior to publication of this report.

Published under: Gas Prices , Tom Steyer