this post was submitted on 27 Mar 2024
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Solar is cheapest on average when starting from scratch. Lots of things can make it not the cheapest from location to location. Cloud cover, latitude, altitude, local oil and gas subsidies, local industry knowledge and experience, etc. are all factors that could make methane still cheaper.
When not starting from scratch, oil and gas infrastructure and momentum gives methane a huge head start. Older facilities were one well with all the supporting infrastructure on-site. Newer facilities have many wells per site branching off radially due to horizontal drilling, and they'll also likely be tankless facilities with a small pipeline moving material off-site to a central facility. Once that central facility is built, adding more facilities that feed into it is far less expensive, and once those smaller facilities are built, adding more wells to them is, again, cheaper.
There is a lot of inertia in this system. It will take a long time and a lot of regulation to make solar a better option in the "open" market. And oil and gas companies will not just lay down and take the loss.
I think we're combining two related, but separate industries, here. I understand why fossil fuel producers want to continue to produce fossil fuels. That's the product they sell. I get that, but what's still not totally clear to me is why more electric utilities aren't switching. Utilities don't sell fossil fuels, they sell electricity. The utilities are the buyers of fossil fuels, they are the customers of the fossil fuel producers, and if there's a cheaper way of generating the electricity they sell, I would think they'd want to switch. From what you've told me, it sounds like some utilities aren't switching because solar isn't the cheapest way to generate electricity everywhere, yet. So, what would it take for solar to become cheap enough for all utilities to make the switch?
It would take oil and gas companies running out of money to lobby to make it just cheap enough that utilities decide not to get rid of the methane infrastructure they have on their sites in favor of switching to renewables.
There is inertia of oil and gas infrastructure all the way to the power plant and to the home.