In Part 1: Is there a lot more natural gas than previously thought? I asserted it now appears likely that, thanks to unconventional supplies, natural gas alone could meet a great deal of the Waxman-Markey CO2 target for 2020 “” without requiring gobs of new power plants to be sited and built or thousands of miles of new transmission lines. In this post I will explain the two key reasons why.
First, today, dirty coal plants are being “dispatched” (or utilized) to provide electricity by grid operators first, while natural gas plants that could provide electricity with far lower emissions of carbon dioxide remain unutilized or underutilized — even though their electricity costs are only slightly higher. This is occurring in at least two regions of the country, according to a major under-reported May study by the Energy Information Administration, “The Implications of Lower Natural Gas Prices for Electric Generators in the Southest.” A cap on CO2 emissions and even a low price of CO2 will switch the dispatch order, generating large emissions savings at low cost (if the gas is available, as now seems likely).
Second, the fundamental flaw in Waxman-Markey is that the 2020 target is too weak both from the perspective of what climate science says is needed (see “The U.S. needs a tougher 2020 GHG emissions target“) and from the perspective of what straightforward energy analysis suggests can be done at $15 a ton of CO2 or less.
Let me run through a rough analysis. The W-M bill requires a 17% emissions cut by 2020. Now EIA’s amazing April report — Updated Annual Energy Outlook 2009 Reference Case Reflecting Provisions of the American Recovery and Reinvestment Act and Recent Changes in the Economic Outlook — forecasts that just on the basis of the clean energy deployment from the stimulus (together with the lingering impact of the recession), U.S. energy-related carbon dioxide emissions will be some 2% lower in 2020 than in 2005 (see “EIA projects wind at 5% of U.S. electricity in 2012, all renewables at 14%, thanks to Obama stimulus!“):
But then we have to throw in the oil reductions from Obama’s recent fuel economy deal (see Obama to raise new car fuel efficiency standard to 39 mpg by 2016 “” The biggest step the U.S. government has ever taken to cut CO2) — and, of course, from higher oil prices than EIA forecasts since it mostly ignores peak oil (discussed here). Let’s call that another 2% emissions drop.
Then we have Waxman-Markey itself. It achieves huge energy efficiency savings. The American Council for an Energy-Efficient Economy (ACEEE) projects “such savings will avoid about 293 million metric tons of carbon dioxide emissions in 2020” (see “Waxman-Markey could save $3,900 per household“). That’s another 5% drop.
So far we are maybe 9% below 2005 levels in 2020. I’m going to skip the large low-cost savings potential from conservation — although I think by 2020 that the painful reality of global warming will be so obvious to all that a large fraction of the public and businesses will want to pitch in to avert Hell and High Water (but then, I’m an optimist or is that a pessimist?).
Now we have to meet the remaining 8% cut with some combination of low-cost renewables, natural gas, and offsets. How will that break out by cost?