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Tuesday / September 26.

Proposals to Eliminate Natural Gas from the Fuel Mix Are Premature

Photo by Rennett Stowe, http://ift.tt/N3rZKX

Natural gas is commonly called a “bridge” to a low carbon future. Why this metaphor?

A bridge crosses over an obstacle, like a river or canyon. The metaphor suggests that transitioning from coal to natural gas for electric generation is one of the most cost-effective and scalable opportunities for cutting greenhouse gases on our way to the promised shore of even lower emissions. This is especially true in the US, which has plentiful low-cost natural gas resources. The idea is that natural gas can carry the US economy in the short term while higher impact carbon mitigation solutions are still too expensive on a large scale. At some point, though, we need to reach the other side of the natural gas bridge so we can continue our journey with even lower carbon solutions like renewable energy, next-generation nuclear, or carbon capture and sequestration.

Politico Morning Energy recently reported that a major environmental group, the Sierra Club, doesn’t want to cross the natural gas bridge at all. They are organizing an aggressive campaign to stop the construction of natural gas power plants and pipelines. In the Sierra Club’s view there’s no river or canyon in our way. The US just needs to make the leap directly to a low carbon future, abandoning fossil fuels as quickly as possible. The Sierra Club believes that if the US and other countries cross the natural gas bridge, the world is headed toward a climate catastrophe.

Photo by Rennett Stowe, http://ift.tt/N3rZKX

Photo by Rennett Stowe, http://ift.tt/N3rZKX

With the impending turnover in the US executive branch, and possible changes in the legislative and judicial branches, policymakers need to critically evaluate these two visions of the future. Is natural gas a bridge to a low carbon future that should be supported? Or will natural gas take us somewhere we don’t want to go – a greenhouse gas point of no return?

Argument 1: We’re Already on the Natural Gas Bridge

MIT’s 2010 Future of Natural Gas report illustrates how the natural gas bridge could work. The authors, led by now-Secretary of Energy Ernest Moniz, developed several scenarios of future energy supply and demand out to 2050. One scenario assumed that price-based policies are used to achieve a 50% reduction in US greenhouse gas emissions by 2050 relative to 2005 levels. This scenario found that natural gas demand would increase through 2040, then begin to slowly decline.

The shift from coal to natural gas has already pushed down US energy-related carbon dioxide emissions by 12% between 2005 and 2015, as Lucas Davis discussed in a recent blog. We’re already on the natural gas bridge.

Changes in the relative market prices of coal and natural gas, driven by the shale gas revolution, provide much of the explanation. However, policy is also influencing the competitive standing of natural gas generation. As evidence, the EIA reports that 30% of the nation’s coal capacity that closed in 2015, shut down in April. That was the month that the EPA’s Mercury and Air Toxics Standards went into effect.

Would the two major presidential candidates continue over the natural gas bridge?

For Donald Trump the concept is moot, since he has no interest in moving to a low carbon future.

Hillary Clinton, on the other hand, supports policies that would take the US further across the natural gas bridge. In particular she wants to implement the Clean Power Plan (CPP). Trump wants to kill it.

Modeling by the EIA estimates that the CPP’s greenhouse gas reduction requirements would boost natural gas generation by 10% by 2040 relative to a scenario with no CPP.

Source: Duke Energy, HF Lee Energy Complex; combined-cycle plant; generating station; power plant; Goldsboro, NC. http://ift.tt/1hIskOn

Source: Duke Energy, HF Lee Energy Complex; combined-cycle plant; generating station; power plant; Goldsboro, NC. http://ift.tt/1hIskOn

The Sierra Club, however, wants to take a different path altogether. They enthuse about Clinton’s aggressive renewable goals, such as her pledge that half a billion solar panels will be installed by the end of her first term.

Their preferred path is more consistent with the Deep Decarbonization Pathways laid out in a study conducted by Energy and Environmental Economics (E3), Lawrence Berkeley National Laboratory and Pacific Northwest National Laboratory. This study models reducing US emissions to 80% below 1990 levels by 2050. The study includes four scenarios. In two, natural gas is all but gone from the electricity mix in 2050. In another scenario the market share of gas is cut in half. In the final scenario, natural gas remains important, but only with carbon capture and sequestration.

Proponents point to California as evidence that a rapid transition away from natural gas is realistic. Natural gas consumption for electric generation in California decreased by 3% between 2014 and 2015. This drop occurred despite the state’s drought, which led to a 16% drop in hydroelectric generation. The growth in renewable generation provides much of the explanation.

Photo by Paolo Crosetto. http://ift.tt/GNPTSO

Photo by Paolo Crosetto. http://ift.tt/GNPTSO

If the US is headed down one of these paths then the Sierra Club’s strategy to stop the construction of new natural gas power plants and pipelines could save society money. It’s worth considering because it would mean we’re potentially wasting billions of dollars to build a natural gas bridge headed to the wrong place.

Reality: Stopping Natural Gas Could Benefit Coal

I find the Sierra Club strategy troubling.

The displacement of coal generation by natural gas generation is a highly cost effective way to reduce greenhouse gas emissions. Even without a nationwide carbon policy, the US is seeing widespread replacement of coal with natural gas.

Recent research looking at the period from June 2008 to the end of 2012 found that the degree to which natural gas replaced coal varied by region. In areas where more natural gas power plants had been built during the prior five years, greenhouse gases from power generation dropped more since there was more natural gas capacity available to come on-line and compete with coal. The Sierra Club’s “Beyond Natural Gas” strategy would retard the continued displacement of coal by natural gas.

I am also skeptical that the California example is relevant to the US as a whole. The nation is much more reliant on coal than California. California also has unusually attractive solar, wind, and geothermal resources. I expect replicating California’s move away from natural gas would be much less cost-effective elsewhere. Also, electricity intensive industry in other states would strongly oppose policies that pushed electric rates up toward California levels.

Rather that categorically declaring natural gas a loser, the US should stick to market-based policies that prioritize the most cost-effective climate solutions. In the near-term, that likely means the US needs to continue its way across the natural gas bridge. Anyone who suggests otherwise is trying to sell us a … well, you know.

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