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Without Critical Policy Shifts, Abundant Natural Gas Will Not Help Slow Climate Change

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August 14th, 2012 by David McCabe, Atmospheric Scientist

The boom in natural gas production from shale and other unconventional resources is exciting many policymakers and commentators due to the economic and energy security advantages from plentiful domestic natural gas. Many also argue that this abundance of gas, which burns cleaner than coal, will allow us to reduce our carbon dioxide emissions and help create a “bridge” to a low-carbon economy. But without critical policy shifts in the US and abroad, unconventional gas probably won’t decrease GHG emissions or slow warming, even over the short term, and it could undermine our efforts to reduce climate pollution.

The argument that abundant gas – a fossil fuel – will help reduce GHG emission is based on the well-known fact that generating a kWh of electricity with natural gas produces around half the CO2 as generating it with coal. But it’s not good enough to look at the CO2 coming out of the power plants: the emissions that come from producing and transporting the natural gas or coal to the power plants, especially leaks and releases of methane, also matter. Natural gas is mainly methane, a climate warmer that is dozens of times more potent, pound for pound, than CO2. As more gas is produced and transported at high pressures – in part to fire power plants – more methane will leak into the atmosphere. How does the increased methane stack up against the decreased CO2 from switching from coal to gas? Comparing the total climate impact is tricky since methane is a more potent warmer, but it does not last as long in the atmosphere, and emissions of methane aren’t well measured.1

At least a half-dozen studies examining this question have recently been published. Some have been balanced efforts, based on the best data we have for leaks and emissions, which wrestle with the uncertainties that arise from poor knowledge of methane emissions and the different lifetimes of methane and CO2 in the atmosphere.2 These papers generally find that gas-fired electricity damages climate less than coal-fired electricity, while acknowledging that it’s not a simple story3 and that gas will have less advantage if leak rates from gas are higher than currently estimated (as they may well be). (Unfortunately, some of the studies which have appeared in peer-reviewed journals have not been balanced and well-sourced.4 Sadly, these latter papers seem to get the most attention in the press.)

From the best of the collective work, we believe that burning natural gas for electricity produces about 30-50% less greenhouse gas than burning coal, even accounting for the emissions of methane (and carbon dioxide) from producing and transporting the natural gas. Does this mean that cheap, abundant shale gas will reduce emissions that are warming our climate?

Not unless we see two important policy shifts.

Before describing the needed policies, it’s important to note that while the potential GHG emissions reductions from switching from coal to gas are substantial, even a fleet of efficient modern natural-gas fired power plants produces far too much CO2 for climate stability. To fight climate change seriously, we need big GHG reductions, not marginal ones. That’s because we’ve already put enormous amounts of CO2 in the atmosphere, and the half-life of CO2 in the atmosphere / ocean / biosphere system is several centuries, at least. As a result we will most likely need to cut CO2 emissions by 80% or more worldwide to stabilize climate and prevent truly alarming impacts.5 Given the enormous growth in energy production anticipated in the developing world, that means we will need to cut CO2 emissions per kWh generated more than 80% – probably closer to 100%. Fueling future global electrical demand with natural gas-fired power plants would simply produce way too much CO2 to meet these targets. That’s why capturing CO2 from gas- (and coal-) fired power plants and sequestering it underground will be an essential tool in fighting climate change.

This isn’t exactly news, which is why switching to natural gas has often been trumpeted as a means to swiftly reduce greenhouse gas emissions, not a long-term solution. After all, reducing electricity sector CO2 emissions by half or more – which the US could do by switching its fleet of older inefficient coal plants to efficient modern gas plants6 – would certainly be a step in the right direction.

But our concern is overall GHG emissions, not just emissions from power plants. According to the best information we have today, abundant shale gas will not reduce overall CO2 emissions under current policies, for two reasons.

First, when a resource gets cheaper, more of it will be used. Since the power sector can respond pretty quickly to the low price of gas, we’re already seeing that more gas is being used to generate power, at the expense of coal. This is a good for climate. But less than a third of natural gas is used for electrical generation. Cheap gas will mean more consumption by buildings, industry, and perhaps for transportation. In many of these sectors, cheap gas won’t edge out coal or any other fuel. We’ll just burn more of it.7

Second, cheap shale gas will also make electricity cheaper, increasing consumption, which will chip away at the emission reduction from switching from coal to gas. Also, at the same time that cheap gas prices out coal, it will price out zero-carbon energy from renewables and other low-carbon electricity like nuclear power.

Quantifying all this requires modeling the effect of unconventional gas on energy markets and emissions, which the International Energy Agency (IEA) recently did. Their report predicts that if these gas resources are widely exploited, globally, CO2 emissions in 2035 will only drop by 1.3%. Increased electricity consumption and non-electricity use of gas and reduced renewables and nuclear will cause increased CO2 emissions that nearly offset the reduction in emissions from the efficiency advantages of natural gas for power generation. It’s worth noting that IEA is generally quite positive about unconventional gas, emphasizing its benefits; this result is not from gas critics. As we noted above, increasing gas production will increase methane emissions. By our estimate, the increase in climate damage from methane will – depending on some assumptions – substantially reduce, or even eliminate, the small climate benefit from reductions in CO2 that IEA predicts.8

In short, if we assume current policies, shale gas is almost a wash for global CO2, and methane will decrease or eliminate any small climate benefits of shale gas. If cheap shale gas crowds out renewables or increases energy demand more than IEA predicts, or methane leaks are worse than we think, cheap shale gas will actually hasten climate emissions, even in the short term (2035). Natural gas will not be a bridge to a low-carbon future unless critical measures are in place to minimize its problems, and maximize its advantages:

- Emissions of methane from drilling and fracking gas wells; compressors, valves, and other equipment; and leaks must be eliminated. Based on our analysis of US gas industry emissions and available technologies, we think more than half of these emissions could be eliminated, in just a few years, at little or no cost to the industry. Reducing emissions further – needed to make gas truly climate friendly – will require more investment from industry, and developing some new technologies. Frankly, that’s not a big lift for an industry that has revolutionized well drilling technology and deployed phenomenal amounts of infrastructure in recent years.

- Natural gas power plants must use carbon capture and storage (CCS) to truly reduce their carbon emissions to climate-friendly levels. CCS technology for natural gas power plants is available today at commercial scale, and in use on a number of industrial plants worldwide. The U.S. Department of Energy estimates that U.S. geologic resources can safely and permanently accommodate over 500 years of captured CO2. Further, four decades of oil industry experience with about a billion tons of CO2 injections (to improve oil production), combined with many successful tests, worldwide, of injection of CO2 into deep formations, demonstrate that we have the technology to do this today. Without CCS, natural gas cannot be clean enough for climate, but like clean up of natural gas leaks, CCS won’t happen on its own. Sensible regulations and policies are needed.

Natural gas with CCS still may be an important part of the low-carbon energy system we need. Wind, solar, nuclear and energy efficiency will also help, but most global analyses suggest fossil energy will be with us for many more decades. Owing to their high efficiency and the low carbon content of their fuel, natural gas combined cycle power plants will have some advantages relative to coal, such as a smaller “efficiency penalty,” for producing low-carbon power with CCS.

But without CCS and elimination of methane leaks, shale gas will not help us cross over to a stable climate.

1 Coal mines are also important sources of methane. However, substantially less methane is emitted, per unit of energy, by mining and transporting coal than by drilling and transporting natural gas. As a result, when switching from coal to gas, methane emissions will increase, though we can’t say by precisely how much.

2 See for example: Jiang et al. 2011, Skone et al. 2011, Fulton et al. 2011, Burnham et al. 2011, Alvarez et al. 2012, Myhrvold and Caldeira 2012.

3 For example, one study finds that if leaks from natural gas are about twice as high as EPA estimates (which they might well be), a natural gas fired power plant would be more harmful than a coal-fired plant, but only for about 25 years after the two plants started operating. After that period, the effects of the emissions from the coal plant will be worse.

4 We’ve already pointed out some of the issues with Howarth et al. and Wigley’s papers, which argue that gas is worse than coal. Recently Lawrence Cathles of Cornell authored a paper that dismisses many of the concerns about methane emissions from natural gas use. This paper is severely flawed by unrealistic assumptions – for example he assumes that natural gas power plants operate at 60% efficiency, which is near-record efficiency. Typical combined-cycle gas power plants built today operate around 50-51%. He also uses very low leak rates of methane and dismisses a recent paper (Pétron et al. 2012), which suggests, based on observations, that methane emissions from natural gas are considerably higher than he assumes, by grossly misstating the results that Pétron et al. report (see paragraph 40 of Cathles 2012). Full disclosure: In the past I worked in the same lab as several of the authors of Pétron et al.

5 See, for example: Matthews and Caldeira 2008, Anderson and Bows 2008, Rogelj et al. 2011, Solomon et al. 2009, Bowerman et al. 2011.

6 CATF analysis based on DOE and EPA data for 2009, assuming all existing coal power — 1772 billion kWh — replaced with new combined-cycle natural gas emitting 800 lb CO2 / MWh.

7 If natural gas does price out petroleum fuels for autos and trucks, we’re quite concerned that GHG emissions will increase. On a CO2-per-mile basis, natural gas is probably a little better than gasoline or diesel, but this “tailpipe CO2” advantage is much smaller than the “stack CO2” advantage for gas-fired power plants. When methane from producing natural gas and gasoline or diesel are factored in, the advantage from tailpipe CO2 probably disappears (like coal vs. gas, the comparison is not straightforward). However, if natural gas vehicles themselves leak any methane at all, the overall climate impact of these vehicles could end up a lot worse than the gasoline or diesel vehicles they replace. Over their long lifetime leaks will develop if no one is preventing (and fixing) them. Experience with NGVs so far is limited to regularly maintained fleet vehicles such as buses, which will not be representative of a private fleet of cars.

8 IEA’s prediction is that if shale gas is extensively developed, an additional 500 billion cubic meters of gas will be produced globally in 2035, and CO2 emissions will be lower by 478 MMT. US official inventories of methane from natural gas imply a leak rate of about 2.4%, though some reports (e.g., see Pétron et al. 2012) indicate that the leak rate may be a lot higher. A 2.4% leak rate and a 500 bcm increase in gas production would lead to an emissions increase of 8.3 MMT CH4. If a 20-yr GWP is used for CH4, 8.3 MMT CH4 is almost 600 MMT CO2e, greater than the emissions reduction in CO2. If a 100-yr GWP is used instead, 8.3 MMT CH4 is a little over 200 MMT CO2e, so a small net emissions reduction occurs. This neglects the small decrease in CH4 emissions from decreased use of coal. Global natural gas systems may have higher emissions rates than US systems (EPA’s inventory of CH4 emissions from global oil and gas implies that this is the case), which would imply that the methane increase from increased shale gas use will be larger still.

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