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CO2 Emissions in US Plunge to 1994 Levels As Natural Gas Booms

SH 92_#6

Proponents of natural gas, or methane in its purest form, say it is cleaner than coal and oil, lacks the PR problems and toxic waste byproducts of nuclear, and more efficiently produces electricity than sustainable sources. It is abundant and, in recent years, cheap. Is natural gas the future of energy production, a risky stop-gap measure to energy independence and cleaner energy, or simply overhyped?

Whatever your opinion on the matter, natural gas is asserting itself into the energy mix. David Crane, CEO of NRG Energy, told the WSJ’s ECO:nomics conference, “Natural gas is in the process of wiping out the coal industry, and it’s wiping out the nuclear industry quicker than we thought.”

Last year natural gas prices significantly undercut coal prices. The spread between coal and natural gas has narrowed in the beginning of 2013 as gas prices jumped. But the longer trend shows rising natural gas use in electricity generation.

30% of US electricity is now generated from natural gas compared to 16% in 2000, while coal-based electricity is down to 38% from 52% in 2000. Some of coal’s decline may be due to a 3% rise in renewables, but the nearly doubling of natural gas use is clearly a central driver.

SH 92_#4This switch from coal to natural gas—which releases 50% less CO2 than coal when burned—may be an important reason CO2 emissions in the US fell -12% from their 2005 high to 1994 levels at the end of 2012.

In the future, natural gas may even skip costly power plants and the electrical grid. Crane thinks natural gas providers will realize they already have a direct pipeline into people’s homes for home furnaces and gas stoves. Someone just needs to invent a “gizmo” to convert that gas to electricity.

Natural gas also has potential applications in transportation. Some commercial trucking firms are already switching to natural gas powered trucks. And although it would take an enormous effort to re-engineer passenger cars and the attendent infrastructure, there are those who believe it can and will be done.

But cheap gas may not last. Tim Rosenzweig CEO of Goldwind Americas asks, “If everybody is generating their own power, and you’re running it into the transportation system, when you increase that much demand, what’s going to happen to prices?” Supply is relatively fixed in the short run, so higher demand could lead to higher prices.

That said, elevated prices needn’t last forever. Higher prices also encourage further exploration, production, and new supply—which eases price pressures and the cycle begins again. Further, the US has plenty of supply to develop.

Fracking and horizontal drilling technology are opening vast natural gas fields previously trapped in shale formations. Though reserves estimates vary year to year, the US shale gas supply is rapidly growing. Big shale gas fields include the Marcellus (PA and WV), Eagle Ford (TX), Bakken (ND), and Haynesville (LA and TX) formations. Shale gas is expected to play a much larger role in natural gas supply in the coming years.

SH 92_#5

EIA, Annual Energy Outlook 2013 Early Release; US dry natural gas production (trillion cubic ft)

The benefits of natural gas are widely hailed—even featuring prominently in President Obama’s last two State of the Union addresses. But not everyone is on the natural gas bandwagon. Michael Brune, executive director of the Sierra Club told the ECO:nomics conference that extracting shale gas is more carbon-intensive than once thought. And whereas burning natural gas may be cleaner, taking the entire process into account, “In some cases, there could be no gap, or gas could actually be worse than coal.”

Detractors further note that because natural gas, or methane, is a greenhouse gas, escaping gas during extraction and transportation may contribute to climate change. Others worry the dangers of fracking aren’t worth the benefits. Fracking solution—water, sand, and chemicals—may contaminate groundwater and fracturing rock under pressure may cause mini-earthquakes.

Emotions run high on both sides of the argument, but researchers are still in the process of studying fracking’s consequences in full. The Environmental Protection Agency (EPA), for example, is in the middle of a several year study on the potential impact of fracking on drinking water with a final draft due in 2014. It’s likely the next few years will yield some regulatory ground rules—but hopefully nothing that chokes off innovation and transformation in the way we make energy.

Image Credit: Daniel Parks/Flickr, jpmueller99/Flickr

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9 comments

  • Improbus Liber
    Improbus Liber says:

    You know, projections out more than a 10 years should come with mandatory error bars. I my hope is that solar, fission (thorium, uranium & plutonium) and fusion (google: Lawrenceville Plasma Physics) will take over before 2040 and everything will be electric … except for rockets.

    • Herbys says:

      Once you have an elevator, rockets won’t be needed to leave earth, and once in space a fusion-electric engine like the one recently tested in Redmond should be more efficient and effective than a rocket. Long live electricity.

  • Che Mort says:

    Who need Kyoto? We dropped our CO2 20% while the EUs emisisons went up! There are no political solutions to hummanites problems, only scientific and technological ones.

    • Herbys says:

      So because the US found tons of natural gas countries that didn’t should not pursue other avenues to curb their emissions? What’s the logic in that? Kyoto is not an universal solution, but putting a price on carbon emissions promotes the development of cleaner energy. And that is also science.

      • Che Mort says:

        Putting a tax on carbon does nothing but make cronies rich. dont buy the hype. The EU director of the program said recenlthy that the carbon market is a fraud and it is racked by fraud. Direct investment in new technology is far better then the dead hand of politics deciding winners and losers. How many gov hadnouts recently to green companies saw those companes go into BK? a lot. Biofuel, fraud! One huge tax payer give away.The entire green machine in Germany is backrupting that country. If you want to spend 800B to 1.4 T a year to prop up well connected rent seeking companies then your economically illiterate. Pay companies not to produce? Now that is a crony capitalist concept that all the crony socialists are appluading! Pigs and farmers sit down to dinner and discuss what to do with the barn animals.

        • Che Mort says:

          I got a better idea; stop the artificial stoppage of nuclear power production so that the industry can jump onto Moore’s law. What would we have today IF big oil hadn’t paid Big Green to shut down their negation? Would we be worried about co2? Air pollution? High energy bills? Nope. Abundant, cheap, energy would have eliminated poverty worldwide 20 years ago.

          Every stoppage hiked oils profits while impoverishing the rest of us.

  • Nils El-Himoud says:

    “fracturing rock under pressure may cause mini-earthquakes”

    Everytime I read this I ask my self why is this an argument against fracking? Mini earthquakes are releasing energy and lower the propability for big earthquakes. Mini earthquakes are perhaps an unwanted sideeffect but after all they are a good thing in my opinion.

    • Che Mort says:

      It’s all fraud. They have been fracking for decades. Big Nat Gas got on the line to big gov and big green and gave tons of money to shut down the new fields in order to keep prices and profits up. If you can artificially limit supply, you can inflate prices and profits!

      The sad thing is that the well meaning enviros don’t understand that they are a front man for corporate interests. How do you create a legal monopoly and shut down your competition to keep prices higher? Easy you put on a green mantle and say your saving the earth. No one ever questions you then.

  • David Meiser says:

    While methane may burn cleaner than coal, the fugitive methane emissions from natural gas counter any type of climate change benefit from its use.

    Several scientific studies have shown this now, and with the increase in use of methane comes increased fugitive emissions, negating the Carbon Dioxide reductions.

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