The overbuilding of natural gas combined cycle plants starting in the mid-1990s presents a significant opportunity for near term reductions in CO2 emissions from the power sector. The current fleet of natural gas combined cycle (NGCC) units has an average capacity factor of 41 percent, relative to a design capacity factor of up to 85 percent. However, with no carbon constraints, coal generation is generally dispatched to meet demand before NGCC generation because of its lower fuel price.
Modeling of the ERCOT region (largely Texas) suggests that CO2 emissions could be reduced by as much as 22 percent with no additional capital investment and without impacting system reliability by requiring a dispatch order that favors NGCC generation over inefficient coal generation; preliminary modeling suggests that nationwide CO2 emissions [from the power sector] would be reduced by over 10 percent. At the same time, this would also reduce air pollutants such as oxides of sulfur and nitrogen.
Considering that energy-related CO2 emissions are now down nearly 10% from 2005 levels, the point once again is that it is inexpensive and straightforward to reduce U.S. CO2 emissions to the 17% target for 2020 in most comprehensive climate bills — as I discussed over a year ago (see “Unconventional gas makes the 2020 climate targets so damn easy and cheap to meet”). Meeting such a 17% target in the utility sector alone, as in the latest incarnation of the watered-down climate bill, would be utterly trivial.CAP’s Susan Lyon (along with Joseph Romm) has more on the MIT Study, which finds that natural will play a “crucial role” over the next several decades in reducing carbon emissions and serve as a bridge fuel between a dirty fossil fuel past and a clean energy future — if we put a price on carbon.
The study notes that the best way to spur this path forward is with a cap on carbon pollution. It recommends that, “a CO2 price for all fuels without long-term subsidies or other preferential policy treatment is the most effective way to achieve this result.”
The 30-member study group modeled a variety of future policy scenarios. They found that natural gas plays a significant role in cutting greenhouse gas emissions with major reductions coming from displacing inefficient, dirty coal-fired electric plants.
Furthermore, as U.S. natural gas markets are relatively mature compared to other countries, the U.S. is poised to be a leader in the coming push to expand natural gas markets globally. Modeling shows that integrating the three global markets that currently exist — North America, Europe, and Asia — would significantly lower natural gas prices for American consumers.
Importantly, the study finds that “environmental issues associated with producing unconventional gas resources are manageable yet challenging.” These environmental challenges, which have been heavily documented but are not yet thoroughly understood, stem primarily from the practice of hydraulic fracturing (‘fracking’) and the fracking fluids injected into the earth to access the gas itself. These ‘manageable’ risks include surface water contamination, shallow freshwater aquifer contamination, pressure on local water supplies, and community disturbance due to drilling and fracking. The study recommends, as CAP has, that companies should be required to disclose to government agencies and the public the chemicals used in hydraulic fracturing fluids.
The models, covering a variety of policy scenarios extending to 2050, find that natural gas consumption will dramatically increase and significantly displace coal — if there is a carbon price. If not, “coal would continue to dominate.”
A scenario in which the U.S. does not restrict GHGs emission finds that U.S. gas production will rise by around 40% between 2009 and 2040. If the U.S. puts a price on emissions, production will rise closer to 30% by 2040 but then start falling slowly. In reality, even if we are dumb enough to not pass climate legislation in the next few years, it is certainly inevitable that we do so long before 2040, which makes projections beyond that point seem pointless.
The study finds that the natural gas resource base in the U.S. is large — enough for about 92 years worth of consumption at present domestic consumption rates — but much of this is from unconventional sources that will require additional research and development to recover.
To achieve an integrated role for natural gas in a carbon-constrained world, the study advocates several key policy recommendations. Broadly, it argues, the U.S. should use more gas for electricity generation and transportation:
Results indicate that a coal to gas displacement strategy could reduce power sector CO2 emissions by about 22% and demand for natural gas in the ERCOT electricity generation market would increase (by 0.36 TcF/year).
The study also looks at using CNG to power light-duty vehicles and LNG for heavy-duty vehicles, respectively. Because CNG use reduces GHG emissions by around 25% relative to gasoline, there could be a good passenger vehicle market; however, payback time of the upfront costs of a CNG conversion must become three years or less for market penetration to occur. It also considers expanding the use of LNG for long-haul trucks, a currently limited market; CAP estimated that if we can get nearly 3 million natural gas heavy trucks on the road by 2035, they could eventually displace up to about 1 million barrels per day, or 45 percent of the projected oil consumption of heavy trucks by 2035.
Yet panelists at the study’s release were careful to note that great legislative uncertainty remains, in addition to other uncertain factors such as gas reserve size, cost structure, and market conditions. In this uncertain climate, Gregory Staple, CEO of American Clean Skies Foundation, one of the study’s sponsors, argues for a strong natural gas title in energy legislation currently being debated in Congress, as well as stricter limits on global warming pollution:
At a minimum, a new energy bill should adopt stricter greenhouse gas emission standards for existing power plants and set a timetable for phasing out the least efficient and dirtiest coal-fired power plants.
Such a shift toward natural gas, under the right policies, can both enhance national security and reduce global warming pollution. For natural gas to best transition into its role as bridge fuel, comprehensive clean energy and climate legislation should become a reality.
- Game Changer, Part 1: There appears to be a lot more natural gas than previously thought and
- 3: Unconventional gas “” great for low-cost climate action.
- 4: Tim Wirth delivers must-read “extreme words” to natural gas execs: “You don’t have the right to sit back and do nothing” about climate change. “We are in very deep trouble, the edge of catastrophe, and you can help.”
- 5: RFK, Jr. on “How to end America’s deadly coal addiction “¦ practically overnight” thanks to “a revolution in natural gas production”