IEA Report: Natural Gas Is Not The Answer To Climate Problem, Existing Cleantech Is — And It Could Save $100 Trillion By 2050


The once staid International Energy Agency continues its string of blunt, must-read reports laying bare the reality of our climate and energy system.

While so many “experts” and politicians make hand-waving pronouncements about how the primary solution to climate change is more R&D or how cheap natural gas is the answer to our problems, the IEA is one of the few international bodies with a comprehensive energy and economic model that cuts through the BS.

As their new report, Energy Technology Perspectives 2012, makes clear, new natural gas investments can play at best a limited, very temporary role “if climate objectives are to be met.” The only viable response to the threat of catastrophic climate change is rapid deployment of existing carbon-free technology.

The Executive Summary offers the key conclusion that the extra investment needed to achieve the 2°C Scenario (2DS) would be a net money saver:

Achieving the 2DS would require USD 36 trillion (35%) more in investments from today to 2050 than under a scenario in which controlling carbon emissions is not a priority. That is the equivalent of an extra USD 130 per person every year. However, investing is not the same as spending: by 2025, the fuel savings realised would outweigh the investments; by 2050, the fuel savings amount to more than USD 100 trillion. Even if these potential future savings are discounted at 10%, there would be a USD 5 trillion net saving between now and 2050. If cautious assumptions of how lower demand for fossil fuels can impact prices are applied, the projected fuel savings jump to USD 150 trillion.

Perhaps because people have misinterpreted their recent reports on natural gas — as I discuss in my May 30 post, “IEA Finds ‘Safe’ Gas Fracking Would Destroy A Livable Climate” — the IEA has tried to be clearer here. And they have succeeded. Consider the how the report was covered in the NY Times by Matthew Wald, who is no greenie:

Reducing carbon dioxide emissions by enough to prevent global temperatures from rising more than 2 degrees Celsius (3.6 degrees Fahrenheit) is “still within reach,’’ the International Energy Agency reported on Monday, but at the moment, trends in energy use are running in the wrong direction.

In the latest version of Energy Technology Perspectives, a report issued biennially by the agency, it said the technology to achieve that goal is available. But as Maria van der Hoeven, executive director of the agency, put it, “we’re not using it.’’ Since the agency published its first Energy Technology Perspectives in 2006, the evidence of climate change has only grown stronger, she said, but “if anything, it has fallen further down the political agenda.’’

Point #1: Delay makes no sense, since we have the technology to start aggressive emissions reduction and delay is very costly. The IEA explains here that “every additional dollar invested can generate three dollars in future fuel savings by 2050.” It has previously explained that, “Delaying action is a false economy: for every $1 of investment in cleaner technology that is avoided in the power sector before 2020, an additional $4.30 would need to be spent after 2020 to compensate for the increased emissions.”

Point #2: If natural gas is a bridge fuel, then the bridge is really, really short one. Here’s the NY Times again:

Coal consumption, for example, is still rising around the world, and that is “the single most problematic trend in the relationship between energy and climate change,” the report said. Building more efficient coal-fired plants operating at higher temperatures could cut emissions by 30 percent per kilowatt-hour. But to reduce global carbon dioxide emissions by 2050, coal use would have to fall by 45 percent from 2009 levels, the report said.

Natural gas is not the answer to this problem, the report points out. Gas-fired plants may emit only half as much carbon dioxide per kilowatt-hour generated than coal-fired plants, but by 2025 the amount emitted will be higher than the average for the entire electric system, it said.

The United States and some other countries are feverishly building new natural-gas-fired generating equipment, the report adds, but the level of emissions from gas raises “questions around the long-term viability of some gas infrastructure investment if climate objectives are to be met.”

The report expands on that point, to make clear that post-2030, natural gas must increasingly play a supporting role to renewables:

Post-2030, as CO2 reductions deepen in the 2DS, gas-powered generation increasingly takes the role of providing the fl exibility to complement variable renewable energies and serves as peak-load power to balance generation and demand fluctuations. Natural gas will remain an important fuel in all sectors in 2050, and demand is still 10% higher in absolute terms in 2050 compared to 2009. The specific emissions from a gas-fired power plant will be higher than average global CO2 intensity in electricity generation by 2025, raising questions around the long-term viability of some gas infrastructure investment if climate change objectives are to be met. If near-term infrastructure development does not sufficiently consider technical flexibility, future adaptation to lower-carbon fuels and technologies will be more difficult to achieve.

In other words, either we plan now for the transition off natural gas, or our expanded investment in gas infrastructure is going to complicate any effort to preserve a livable climate.

Point #3:  “It is difficult to overstate the importance of energy efficiency, which is nearly always cost effective in the long run, helps cut emissions and enhances energy security.”

Point #4: We need to price carbon:

Ensuring that the true price of energy – including costs and benefits – is reflected in what consumers pay must be a top priority for achieving a low-carbon future at the lowest possible cost. Putting a meaningful price on carbon would send a vital price signal to consumers and technology developers.

Point #5: Finally, the IEA makes clear that renewable energy can play a dominant role in supplying electricity by mid-century, indeed, it must:

Low-carbon electricity is at the core of a sustainable energy system. Low-carbon electricity has system-wide benefits that go beyond the electricity sector: it can also enable deep reductions of CO2 emissions in the industry, transport and buildings sectors. ETP analysis shows how emissions per kilowatt-hour can be reduced by 80% by 2050, through deployment of low-carbon technologies. Renewable energy technologies play a crucial role in this respect. In the 2DS, their share of total average world electricity generation increases from 19% currently to 57% by 2050, a sixfold increase in absolute terms. In fact, low-carbon electricity generation is already competitive in many markets and will take an increasing share of generation in coming years. Integrating a much higher share of variable generation, such as wind power and solar PV, is possible. In 2050, variable generation accounts for 20% to 60% of total electricity capacity in the 2DS, depending on the region.

It’s time for governments and journalists and opinion-makers to actually read IEA reports and stop pretending that our current energy policies are rational.

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20 Responses to IEA Report: Natural Gas Is Not The Answer To Climate Problem, Existing Cleantech Is — And It Could Save $100 Trillion By 2050

  1. Louisette Lanteigne says:

    Switching form Coal to Gas might reduce impacts 50% but that benefit goes out the window when you consider how growth could double use. We must strive for low impact energy including wind, solar, geothermal and hydro power where possible and focus on reducing overall demand for energy. Water treatment and transportion is a huge costs but if we used compost wastes and use it for biofuel, far better option. When it comes to energy sources: THINK LOCAL and avoid big grid energy solutions.

  2. M Tucker says:

    We have entered a brave new world where ‘sea level rise’ is a left wing term. A rational energy policy would require rational legislators but all the Republicans have left the land of rational thought a long time ago. Expect continued irrational attacks on language and absolutely no progress on a national energy policy. Expect attacks on wind and PV subsidies and more calls to drill everywhere for crude and natural gas. Admit the 2DS is past and prepare for a long bitter fight to end fossil fuels.

  3. john atcheson says:

    IEA has really come a long way. Back in the 90’s and early 2000’s there was little difference between IEA and the US’s Energy Information Agency. While EIA is pretty much the same, IEA has leapfrogged them.

    One astounding factoid in the IEA’s executive summary: Even with a discount rate of 10% there’s a positive net return on this investment.

    Sadly, we are stuck with the practice of discounting, even though discounting the value of investments replacing a finite resource that is depleting, flies in the face of the very foundation of all economic theory — the law of supply and demand. This, of course was at the core of the controversy over the Sterns Report. But IEA’s analysis makes it irrelevant.

    The other interesting thing they say — investing in clean energy alternatives caps (or even reduces) the price of fossil fuels, saving even more than conventional cost benefit analysis would suggest.

    It’s good to see some honest analysis — wish we could get the policies they demand, instead of drill baby dirll form both parties.

  4. Mimikatz says:

    But that $100 trillion would have gone to someone(s) and they are really gonna miss it, so that makes it much harder than it should be.

    We are indeed at a crossroads.

  5. Dimitar says:

    Again very conservative IEA report.

    In 10 years 4-6 bilion people will realize that PV gives them the cheapest electricity. Than in just 5-10 years they will be 100% renewable and will export energy to the other people.

    We’ll have 100% renewable long before 2050.

  6. Mike Roddy says:

    IEA is very different from EIA, the US equivalent, whose reports are political in the way that they enable poor industry reporting (especially forestry), and issue no real alerts about climate change.

    Every USG agency has been compromised. It’s sad to behold.

  7. Lewis Cleverdon says:

    That’s right dear, just you carry on dreaming.

    No need to worry your head about anything complicated – like how any fossil fuels locally displaced by renewables are bought and burnt elsewhere;
    – or like how even a sudden 20% global roll-out of renewables would massive cut fossil fuel prices and so maintain their price-competitiveness;
    – or like how the fossil lobby is developing very cheap dirty options including widespread coal-seam gasification for power and for coal to liquids;
    – let alone how the only reliable means to halt global GHG pollution is via an equitable and efficient global climate treaty.

    No, don’t you worry your pretty head about all that stuff. All the fashionable US enviro websites are pushing the techno-fix with state-aided free-market deployment – so don’t you worry ’bout a thing.



  8. jyyh says:

    <<…Hmm, IEA reports shale gas, aka. "the Greek solution" is not teh answer to energy inefficiency…<<

  9. Mulga Mumblebrain says:

    That, I believe, is the great lesson of ecological denialism. It might be challenging to admit, but the refutation of science, rationality, even a tangential relation to the truth and the basic human drive to protect one’s own children, by the Right, is teaching us a moral lesson that we must not refuse to acknowledge. And that is that this is a fight, to the death (of our species) against real evil. These are not poor misguided fools who will one day see the error of their ways. They threaten humanity in a manner only equaled by the architects of nuclear Mutually Assured Destruction and the policy of Nuclear First Strike.

  10. Mulga Mumblebrain says:

    What use is 100 trillion, quadrillion or centillion on a planet unfit for human habitation? Love of money is the root of all evil-just gaze upon the works of the Kochtopus, and despair.

  11. Mulga Mumblebrain says:

    Lewis, don’t be too hard on the techno-optimists. After all it must be terrifying to be young, intelligent and informed and know that you may not live out your allotted span because the greedheads are destroying the sustainability of the planet for our species’ existence, and even if you were to eke out a long life amongst the chaos, your children and grandchildren will stand no chance. The young are inclined to believe that, in the end, good must triumph in human affairs, when, in truth, very nearly the exact opposite is the dreadful reality.

  12. SecularAnimist says:

    With all due respect, Lewis, Dimitar is correct: the IEA has a consistent track record of grossly underestimating the growth of solar and wind energy. Their extremely conservative projections have been repeatedly outstripped by the actual growth of these technologies.

    Recognizing the capacity of solar and wind energy to easily provide the electricity needed to power an advanced technological civilization sustainably and indefinitely does not mean that one denies the urgent need for complementary measures at all levels — local, national and global — to actively reduce fossil fuel use.

    Nor does recognition that solar and wind CAN provide all our energy needs — much faster and cheaper than most people realize — necessarily translate into optimism that this WILL happen. While there are no real technological or economic barriers, the entrenched wealth and power of the fossil fuel corporations is a real obstacle.

    But given the urgent necessity of eliminating fossil fuels VERY quickly, I would suggest that you should certainly hope that solar and wind and other renewables will be scaled up to meet 100 percent of humanity’s energy needs on the time scale that Dimitar suggests.

    Because the alternatives are that, or catastrophe.

  13. M Tucker says:

    We can’t even “export” California solar energy to Chicago. Northeast wind power is not going to be coming to Texas. We not only need to radically ramp up the transition but we must do a lot of work on the grid. Since neither is being done, since both require government assistance, it is nothing more than pie-in-the-sky dreaming to think things will be much different 40 years from now. If we are lucky solar and wind might account for 40% of US energy needs but it will probably be more like 30%. We will not be building many more hydroelectric dams and geothermal will only play a minor role. Meanwhile fossil fuels will continue to dominate. The cheap dirty options will still be popular. The tax revenues to the states with fossil fuel resources are popular. Most of the power plants being built now will still be in use 40 years form now. For transportation the filthiest of the fossil fuel resources are being exploited and the use of coal to produce gasoline is at the top of that list. Also known as coal to liquid, this has been the failsafe resource of the gasoline economy. The easy oil might soon be gone but we have coal to last several generations. Up till know only S Africa has been the only real user of this filthy technology but it looks like W Virginia has a plan to build a coal to liquid plant. If all goes as planned it will break ground next year. So that is how technology will be used. Not to produce bright shinny green energy but to spew out more of the same filthy mess.

  14. Dimitar says:

    Excuse me but you are looking at this from the opposite direction.

    It’s not about what nuclear and fossils can build. Its about what CONSUMERS can and WILL build once it is economical for them.

    In my country – Bulgaria – the price of electricity more than doubles from the plants to my home. And as I understand it is far worse in countries like Germany, Denmark, Italy, France, probably USA, etc etc.

    Once consumers realize that it is cheaper to use electricity from the PV on their roof instead of buying it from the grid – everyone everywhere will start putting PV on their roofs.

    Keep in mind that PV, unlike fossils and nuclear, gets cheaper the more you build. And this trend will continue.

    At the moment it is cheaper to use electricity from the roof PV instead of buying it from the grid in Germany, Italy, Southern France, Spain, Australia, probably California, etc etc.

    By 2015 Turkey, Greece, Portugal, several states from USA will join the club.

    By 2020 it will even become cheaper to store PV electricity and store it locally (batteries, EVs or whatever) than buy it from the grid in the most sunniest regions (above 1600 KWh/KWp).

    By 2025 this will be true even in less sunny regions (above 1200 KWh/KWp).

    By 2030 for EU, USA, China, Japan, India etc etc 3-5 billion people.

    Here I made a table of how much money will be saved if you use electricity from PV on your roof instead of buying it from the grid:

    Keep the track of the installation cost of roof PV and calculate when it will be profitable for you to do it.

  15. Dimitar says:

    residential PV at the moment is at the same stage as it was Internet back in 1995.

    5 years later – 2000 0 (not to mention 15 yeaers later – 2010) life started to become unimaginable without Internet.

    And let me repeat myself:

    The more PV you install the cheaper it gets.

  16. Mulga Mumblebrain says:

    If things transpire as you posit, and assuming that runaway climate destabilisation does not make all such calculations moot, then in forty years the USA will be left far behind by the rest of the planet. At the same time, with burgeoning inequality, a rapidly growing underclass, huge indebtedness, a deliberately wrecked public education system and a MSM dedicated to obscurantism, militant ignorance and hysterical hatemongering, the USA’s best days will be long gone. It will still have its nukes, ‘though.

  17. Mike Roddy says:

    I noticed the same thing, John. EIA skirts data that puts fossils and the timber industry in a bad light. Industry reports are incorporated. Serious predictions of danger and depletion are under reported.

  18. Alastair Leith says:

    You don’t have to wait for 2030 for developing countries to get on the PV and renewable caravan. In regions with poor to non-existant energy infrastructure, deployed/decentralised energy generation like solar PV are below grid parity, because there is no grid or the grid is massively under capacity.

    That’s why the poorest State in the world almost (poorer than sub-Saharan Africa by almost every index), Bihar, India is planning a massive roll-out of PV and renewable energy.

  19. Jan Freed says:

    If we put a price on Carbon, and refund those fees to the taxpayer, it will cost us zero, and it will shift choices to renewable energy forms. That is HR 3242, the Save OUr Climate ACt. Chance of passing? Let’s try anyway. Contact your congressman.

  20. Promoting natural gas as a “bridge'” solution to climate change is like telling someone who is smoking two packs of cigarettes a day that he really ought to cut down to one pack a day for his health.