Natural gas is a waste product. Its "cost" is almost entirely profit. All renewables can do is compete down this margin, they can never beat gas. If renewables are cheaper that just means some competition/profit issue and not the actual production cost of the energy source. Has this been accounted in any way by LCOE or is it ignored?
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1Some gas , from some wells, in some infrastructure situations , is flared as a waste product.– blacksmith37Commented Sep 9, 2019 at 15:28
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There are multiple ways in which natural gas is extracted. One is as a by-product of oil extraction so in that sense you could regard it as a 'free' extra. However you still need to process and transport the gas, perhaps also store it, and those costs are certainly not negligible. This is even more so for natural gas fields and shale gas where gas production is the core activity.
There are different estimates for the levelized cost of energy (LCOE) for various energy sources. LCOE calculations not only include fuel costs, but also generator operation costs and maintenance which applies to all energy sources; renewable and non-renewable.
One of the more optimistic LCOE for renewables is that of Lazard consulting company who have been saying that wind energy is competitive with or even outperforming natural gas since 2014. While not everyone agrees with this already, it is clear that costs of renewables are still declining. Costs of natural gas on the other hand are expected to increase slowly as reserves decline and more challenging gas fields are put into production.
Recent forecasts suggest that it may be cheaper to build new renewables+storage than to continue operating existing natural gas plants by 2035. (source)
and
By 2023, we think solar’s going to be cheaper than gas almost everywhere around the world (source)
Also keep in mind that production costs are just one aspect. It does not include the environmental impact of natural gas. Even though natural gas is the cleanest of all non-renewables, it still contributes to rising CO2-levels. Since many countries are committed to the Paris agreement, they are likely to reduce or phase out natural gas in the long run.
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Makes you wonder why there is a building boom in LNG plant construction , mostly Russia and Canada. The plants cost $ billions and need to run years to be profitable ( how many years depends on some assumptions , so no hard number). Commented Sep 9, 2019 at 18:34
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@blacksmith37 same in the U.S. My understanding is that it's heavily subsidized by the govt. Increasing demand for LNG boosts the industry, increasing supply, creating revenue (from taxes) and energy security. It's smart, in an evil way.– LShaver ♦Commented Sep 10, 2019 at 12:03
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@blacksmith37 The big problem with renewables is still storage. Gas is seen as a good 'bridge' fuel while we wait for better battery technology. We expect that that will arrive in the next 10-20 years, but this is not certain. I also suspect that governments are not willing to abandon their natural gas reserves and will try to sell as much as possible before batteries take off.– THelperCommented Sep 10, 2019 at 12:36
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There is no subsidies to LPG in the US. A local municipality may give some reduction of local taxes to encourage some unit to be constructed providing local jobs. This is the same as a local tax break to build a new mall. Commented Sep 10, 2019 at 15:47