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Study: Gas to play major GHG reduction role in near term

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, June 28 -- While tight carbon constraints could lead to less natural gas being used to generate power in the long run, gas will play a substantial part in the coming decades in enabling substantial near-term carbon emissions reductions, a new Massachusetts Institute of Technology study concluded.

“Much has been said about natural gas as a bridge to a low-carbon future, with little underlying analysis to back up this contention,” said Ernest J. Moniz, director of the MIT Energy Initiative (MITEI), which produced the report. “The analysis in this study provides the confirmation: Natural gas truly is a bridge to a low-carbon future,” Moniz said June 25 at a Washington press briefing.

The 2-year study by 30 MIT faculty members, researchers, and graduate students examined the scale of US gas reserves and their potential to reduce GHG emissions, largely by replacing older, inefficient coal-fired power plants with more-efficient combined-cycle generation. It also found that there are significant global supplies of conventional gas, but added that its production depends heavily on several key political and regulatory decisions.

Moniz said replacing US coal-fired plants with combined-cycle gas units represented a substantial amount of low-hanging fruit in the carbon dioxide emissions reduction tree. “It does, however, raise complicated regulatory and political issues that will have to be resolved to take advantage of this potential,” he added.

The study noted that the US has a gas resource base equal to about 92 years of demand at current consumption rates. Much of these potential supplies come from gas-bearing shales and other unconventional sources, with more questions about whether they can be produced than their abundance, it indicated.

Substantial additions
Despite concerns expressed by some groups, unconventional gas resources are rapidly overtaking conventional supplies as the primary US source, according to the study. It suggested that substantial additions to existing processing, delivery, and storage facilities will have to occur to handle larger volumes and changing distribution patterns, such as delivery of gas from newly discovered sources in the Midwest and Northeast.

As hydraulic fracturing expands into areas with little previous oil and gas production experience, producers and regulators will need to address allegations of fracturing fluids contaminating surface and drinking water supplies, excessive water supply demand for fracing, and surface and local community impacts, according to the study. It recommended requiring disclosure of all fracing fluid ingredients, and integrated water use and disposal plants for all unconventional gas production. It also called for renewed federal support of basic research to optimize gas resources and ensure they are produced in an environmentally sound manner.

Globally, the MIT study said, baseline estimates place recoverable gas resources around 16,200 tcf, or about 160 years of demand at current consumption rates. This global resource figure, which excludes Canada and the US, does not include any unconventional gas resources which are largely uncharacterized in the rest of the world, it said.

It predicted that gas consumption will grow substantially and will largely replace coal to generate power under a modeling scenario where industrialized nations reduce CO2 emissions by 2050 through carbon pricing, and large emerging economics such as China, India, and Brazil cut their CO2 emissions in half by 2070. The scenario also assumes incremental price reductions of renewable sources, nuclear power, carbon capture and sequestration, and other alternatives, it said.

In addition to policies encouraging replacement with gas of less-efficient coal-fired units, the study recommended policy and regulatory measures to facilitate gas generation capacity investments concurrent with the introduction of large intermittent renewable generation such as wind and solar.

Transportation limits
The study found a smaller role for gas in transportation because of the high costs of converting vehicles to run on compressed gas or LNG. Methanol would require fewer upfront conversion costs and have a favorable energy security impact by reducing demand for imported crude oil, but it would not reduce GHG emissions as much, the study said. It recommended pursing ways to remove policy and regulatory barriers to wider use of gas as a transportation fuel.

The study said the most desirable global market is one that is liquid, with diverse sources and transparent prices. The three primary markets in North America, Europe, and Asia have very little integration and rely on different pricing structures, it noted. Integrating these markets would benefit US consumers, it said. Domestically, this will require including gas price issues in foreign policy discussions with a strong presidential involvement and a strengthened gas policy apparatus at the US Department of Energy, it said.

The report, while emphasizing gas’s potential to reduce dependence on other fossil fuels with heavier carbon impacts, also stressed the importance of gas not crowding out research into other low and no-carbon alternatives. “We’d better not get mesmerized by gas,” said Moniz. “We need to do the hard work of getting these alternative technologies ready to take over.”

The American Clean Skies Foundation, Hess Corp., Colombia’s National Hydrocarbons Agency, and the Energy Futures Coalition provided support for the study, which is a preliminary overview of a more detailed evaluation scheduled for release later this year, MITEI said.

Contact Nick Snow at nicks@pennwell.com.


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