NATURAL GAS, A BRIDGE NOT SO FAR

Natural Gas: A Bridge Fuel for the 21st Century
John Podesta and Timothy Wirth, August 10, 2009 (Center for American Progress)

SUMMARY
Natural Gas; A Bridge Fuel for the 21st Century by John Podesta of the Center for American Progress (CAP) and Timothy E. Wirth of the Energy Future Coalition, re-emphasizes the growing approval of natural gas by progressive Democratic leadership.

Late in July, dedicated environmentalist Robert F. Kennedy, Jr., published an editorial in the UK Financial Times endorsing natural gas as a bridge away from coal and to New Energy.

Al Gore recently enthusiastically approved the idea at Senator Harry Reid’s Las Vegas Clean Energy Summit.

At the same time, Podesta, the founding father of CAP (one of the most influential progressive thinks tank in the country), published his memo of endorsement.

Reasons natural gas might be a good idea: (1) It is the cleanest fossil fuel that could be burned for power generation, causing no more than half the greenhouse gas emissions (GhGs) of coal. (2) Recent advances in drilling technology make it possible to get at enormous U.S. reserves embedded in shale economically.

click to enlarge

Estimates put domestic natural gas reserves, including the new shale bed discoveries, at an amount capable of filling U.S. power needs for 90 years.

The new shale bed gas finds are primarily in Arkansas, Louisiana, Michigan, New York, North Dakota, Ohio, Pennsylvania and Texas. For several of those states, a boost to their economy would be revitalizing.

click to enlarge

Of the fossil fuels used to drive power plants, natural gas can most readily be combined with wind installations, solar power plants and existing coal plants. Its flexibility would therefore facilitate a reduction in the use of coal from old plants as well as an increase in the building of New Energy.

Natural gas works well with New Energy. (click to enlarge)

The average U.S. coal plant is 35 years old. U.S. plants older than the average age ALONE account for 7% of world GhGs.

The Podesta/Wirth CAP/EFC paper points out that if shifting to natural gas is a good idea, it would be helpful for Senator Barbara Boxer (D-Calif), Chair of the Environment and Public Works Committee, and Senator John Kerry (D-Mass), Chair of the Foreign Relations Committee, to include provisions for greater use of natural gas in the climate and energy legislation they are preparing for consideration by the Senate in September.

Policies recommended by Podesta and Wirth that would spur the transition to natural gas and New Energy for electricity generation:

(1) Financial rewards (incentives) for retiring coal plants in favor of natural gas plants and New Energy installations
(2) Incentives (credits) to compensate power producers for moving to natural gas and New Energy beyond the Renewable Electricity Standard (RES) requirments
(3) Incentives for developing and deploying dispatchable New Energy and New Energy storage technology
(4) Requirements for grid operators to consider the price of emissions in their trafficking of electricity, so as to favor natural gas and New Energy sources
(5) Expanded carbon capture and storage (CCS) provisions and remunerations to include other storage technologies as well as requirements that existing coal and gas plants be retrofitted with sequestration and/or energy storage capabilities
(6) Elimination of disincentives to the installation and use of combined heat and power (CHP), or cogeneration, technology

The alteration of antiquated and counterproductive policies that prevent coal plants from using CHP technology could perhaps be the lowest hanging fruit on the climate change fight tree. CAP estimates CHP alone could cut U.S. fossil fuel use 30%, cut U.S. GhGs 20% and save $150-to-$250 billion per year. (No wonder Amory Lovins has been screaming about CHP for years.)

Combined Heat & Power, aka cogeneration, the best efficiency. (click to enlarge)

Changing the policy would require: (1) A review of regulations by the Federal Energy Regulatory Commission (FERC) and state public utility commissions; (2) FERC guidance to regional transmission organizations (RTOs) to support demand response
and energy efficiency in power market auctions or incur penalties; (3) A FERC-led effort to create similar programs outside RTO territories; (4) A financial reward for the lowest cost/cleanest power sources; (5) A review of RTO governance to eliminate undue influence by private interests.

Policies that would spur the transition to natural gas for transportation:
(1) Incentives to expand the use of compressed natural gas (CNG) to fuel heavy transport (buses and trucks)
(2) Rapid transit system incentives for communities to deploy and use compressed natural gas buses

Current admirable federal efforts to drive the transition to battery electric vehicle (BEV) personal transport will fail to do anything to change reliance on oil in heavy transport because current BEV technology will not move heavy loads. Compressed natural gas (CNG) will.

The NAT GAS Act, S1408, authored by Senators Robert Menendez (D-NJ), Harry
Reid (D-NV) and Orrin Hatch (D-UT), will facilitate the development of a 100% CNG heavy transport fleet. The companion House bill is HR 1835, authored by Representatives Dan Boren (D-OK), John Larson (D-CT), and John Sullivan (R-OK).

Batteries can't yet do heavy duty but natural gas can. (click to enlarge)

A Bus Rapid Transit (BRT) system that runs on CNG costs 30 times less than a subway system and requires no construction time.

Policies that would spur the transition to natural gas by increasing production:
(1) Fund and require a “comprehensive” study of natural gas impacts on air, water, land, and global climate change and compile regulatory best practices/recommendations for drilling, transporting, refining and using it
(2) Requirements for public disclosure of natural gas production-generated toxicities
(3) Expansion to medium and large scale producers of the STAR program in which independent natural gas producers voluntarily capture and profitably resell methane, a powerful GhG, instead of releasing it

Research and Development (R&D) that would spur the transition to natural gas:
(1) Turbine efficiency
(2) Energy and emissions storage technologies
(3) Combined Heat and Power (CHP) technologies
(4) New Energy

This went unmentioned by all the endorsers. Will it be a problem? (click to enlarge)

COMMENTARY
As documented by TALLY OF INTERESTS, Marianne Lavelle’s superb chronicle of lobbying on the climate and energy legislation, America’s Natural Gas Alliance (ANGA) has become much more aggressive on behalf of independent natural gas producers in recent months. (See LOBBYISTS PUSHING HARD)

Are all these endorsements an indication of ANGA’s effectiveness? Possibly. But do they make sense? It would be hard to find a duo with environmental credentials as substantial as those of former Vice President Al Gore and noted legal environmental advocate Robert F. Kennedy, Jr., and they say natural gas makes sense. But they aren't infallible. Bob Dylan said, "...don't follow leaders..." Instead, Mr. Dylan could have added, examine what they are selling.

Fracturing - the problematic way to get at shale gas. (click to enlarge)

In his opinion piece in the Financial Times, RFK, Jr., made a series of salient points and included some important cautions.

In favor of natural gas:
(1) Conversion could be relatively fast and affordable, with coal plants being retrofitted;
(2) Funding such retrofitting would be a shot in the arm for the economy;
(3) New drilling techniques have created a safer means of production and a new abundance of supply;
(4) Almost anything is better than coal, which generates the worst GhGs of any power source, ozone and particulates, acid rain, neurotoxic mercury and dangerous waste from environmentally devastating mining processes;
(5) New Energy is ready. Natural gas is available, is affordable and is abundant enough to bridge the gap while the New Energy infrastructure is built.

Kennedy added a cautionary caveat: The drilling for and extraction of natural gas from the shale where it has been rediscovered in abundance is a potential environmental hazard and will require rigorous regulatory vigilance. (See Buried Secrets: Gas Drilling’s Environmental Threats)

Regulation required. (click to enlarge)

Kennedy made a point very similar to one made in the CAP paper: Regulatory requirements on grid operators to take note of and give preference to New Energy and natural gas sources in the transmission system is possible and would immediately reduce as much as 75% of the use of coal.

In terms of the climate change fight, natural gas offers a really interesting opportunity. CAP estimates an emissions allowance price of $7-to-$14 per ton would likely drive grid operators to prioritize gas over coal. What this means is that gas producers have a LOT to gain from supporting a cap&trade system. It moves a substantial portion of the oil&gas industry from the anti-climate change bill to the pro-climate change bill side.

As Kennedy pointed out, the single biggest benefit from a mandatory shift to natural gas would be ridding the nation of “antiquated and horrendously inefficient...ancient [coal] plants…” that are 60-to-75% less efficient than new natural gas plants. The oldest and dirtiest part of the coal plant fleet provides 21% of U.S. power but spews half its power sector GhGs and is responsible for much of the mercury and acid rain.

Newer coal plants, Kennedy recommended, should be required to co-fire with natural gas.

Footnote: The turn of the New Energy discussion toward natural gas will no doubt significantly assuage T. Boone Pickens’ disappointment at having to postpone his 4,000-megawatt wind project in the Texas panhandle earlier this year. The wind will come. Meanwhile. Pickens has some of the biggest names in progressive Democratic politics signing up for all the natural gas he can pump and all the CNG he can supply.

From pickensplan via YouTube.

QUOTES
- Robert F. Kennedy, Jr: "Natural gas comes with its own set of environmental caveats. It is a carbon-based fuel and its extraction from shale, the most significant new source, if not managed carefully, can have serious water, land use and wildlife impacts, especially in the hands of irresponsible producers and lax regulators. But those impacts can be mitigated by careful regulation and are dwarfed by the disaster of coal."
- Al Gore: “I endorse Boone’s plan for 18-wheelers…”
- From the CAP paper:” Natural gas can serve as a bridge fuel to a low-carbon, sustainable energy future. In particular, natural gas can provide the critical low-carbon “firming” or back-up fuel that can enable deep market penetration of both wind power and concentrated solar thermal power…Using clean domestic natural gas will also enhance our economy. Since it is produced in the United States, higher gas demand will create more jobs, and using domestic gas in lieu of imported oil would reduce our trade imbalance, keeping energy dollars at home instead of exporting oil dollars overseas. Gas could also be the basis for development of new, clean-energy technologies such as wind-gas hybrid electricity plants, carbon capture and storage, and natural gas transportation fuels. Such low-carbon technologies would find a market overseas. America and the world’s needs for new jobs and new energy sources coincide with the emergence of a powerful wave of clean-energy investment. More than $155 billion was invested in clean-energy technologies in 2008 alone and investments are expected to triple in the next three to four years…The American Clean Energy and Security act, or ACES…could become more effective at job creation, oil reduction, consumer protection, and greenhouse gas pollution reduction if it did more to encourage and require a broad range of no- or low-carbon energy technologies. The Senate has an opportunity to incorporate such proposals into its bill during the debate on energy and global warming legislation this fall.”

click to enlarge
click to enlarge