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Is Natural Gas the Energy of the Future?

by: Paul Kando

Some tout natural gas (NG) as "the greener answer" to our oil dependency and rising energy costs. NG indeed has a role to play in our energy supply, but over-reliance on it can actually worsen our nation's carbon emissions. So says a new Union of Concerned Scientists report on the latest research on the climate impact of NG. The report is timely because, as of early 2013, electric power plant owners have announced plans to retire coal-fired plants with almost 56 gigawatts (GW) of combined capacity - 17% of the U.S. coal fired fleet. Another 51 GW capacity has been identified as economically vulnerable. To replace coal, NG generating capacity has already increased 28% , with nearly 260 GW of new plant capacity added between 2000 and 2008 and a further 50% increase by 2012.

The share of non-hydro renewable energy nearly doubled over the same period - due, in part, to state and federal renewable electricity policies and a decline in the cost of wind and solar power. Wind power accounted for more than 35% of all newly installed capacity during the last four years and solar capacity expanded by a factor of five. Even so, the electric power sector accounts for one-third of U.S. carbon emissions. Coal fired plants bear responsibility for almost 80%, but the share of emissions from NG is growing rapidly. It grew from 15% in 2008 to 24% in 2012.

When burned in an efficient, combined-cycle power plant, NG emits approximately 800 pounds of CO2 per megawatt-hour - 50 to 60% less than a typical new coal fired plant. However the drilling and extraction of the gas from wells, and its distribution through pipelines are accompanied by the leakage of methane-the primary component of NG and a greenhouse gas 25 times more potent than CO2. As demand for NG increases, so do its emissions. And under current energy policies the US power sector's share of emissions from NG will continue to increase over the next several decades, tripling by 2050 to keep up with increasing demand for electricity and to substitute for retiring coal and nuclear plants. Greater use of NG for generating electricity could contribute to the sector's overall increase in carbon dioxide emissions. Due to the continued dominance of fossil fuels and rising demand, the power sector's emissions through 2050 will be 5% to 25% higher than today's levels. The US Energy Information Administration (EIA), for example, projects a 12% rise above 2012 levels by 2040 in electricity-related CO2 emissions.

To avoid the worst consequences of climate change, the National Research Council (NRC) recommends an economy-wide US carbon budget of 170 gigatons of cumulative CO2 equivalent emissions from 2012 to 2050. This budget would cut electricity sector carbon emissions by 90% from current levels. Most of the reductions would occur in the first 20 years, as part of an economy-wide emissions reduction goal. For this to happen, the US must invest heavily in energy efficiency and increase the share of distributed renewable energy generation to 25% of the total power supply by 2025 and to 80% by 2050.

What will it take to achieve a low-carbon energy future? Strict federal limits on CO2 and other harmful emissions from new and existing plants, encouraging energy efficiency. Government at all levels should adopt policies and programs - renewable energy standards, energy efficiency resource standards, tax incentives, feed-in tariffs, financing mechanisms-to encourage improvements in energy efficiency and the use of renewable energy. Regulation of hydro-fracking for NG must be tightened. Strong state and federal laws are needed for monitoring, evaluating, and mitigating the potential risks inherent in fracking, its impacts on public health and safety, as well as broader climate, environmental, economic, and social impacts. Resource planning by regional grid operators and utilities must be improved as well. As old and inefficient coal plants are retired, utilities and electricity regulators must consider in their long-term planning the risks of over -reliance on NG.

A level playing field must be created for all low-carbon technologies. The US should set limits to heat-trapping emissions and ensure that zero-carbon and near-zero-carbon resources can compete fairly with NG and other fossil fuels. The federal government should put a price on carbon and require the NG industry to employ technologies and practices that significantly reduce methane losses from NG drilling and pipelines. Low-carbon technology research and development, both federal and industry-sponsored, should be increased to improve energy efficiency, renewable energy utilization, and carbon capture and storage.

What about the price of NG? Many experts believe that current low prices are not sustainable. EIA projections show prices rising 194% from 2012 levels by 2040. Furthermore, if the US exports NG to parts of the world with higher energy prices, this could push prices higher here as well.

NG is not a permanent solution. It is transitional energy. Contrary to well-financed propaganda, the era of affordably priced fossil fuels, including NG, is ending. Renewable energy is the future. Its growing share in advanced countries proves what is possible: Sweden 44%, Denmark 40%, Spain 31%, Germany 26%, Italy 25% - and growing. It is time to adjust our thinking and business models to match.