More than gas is needed to control GHGs, NARUC committee told

Growing natural gas use has clearly helped reduce US carbon emissions, but it can’t be expected to bring greenhouse gases to desired lower levels, three experts told two National Association of Regulatory Utility Commissioners’ committees on Feb. 4.

“The question is not whether gas is more effective than cap-and-trade or other carbon pricing programs, but what we can do in total to achieve the goal of not allowing global temperatures to rise 2° C. by 2035,” said Kelly Speakes-Bachman, a member of Maryland’s Public Service Commission.

Gas is responsible for a 31% drop in GHG emissions in Maryland the eight other Mid-Atlantic and New England states that comprise the Regional Greenhouse Gas Initiative (RGGI), she said during a panel discussion at NARUC’s 2013 Winter Meeting.

“But it may not be enough,” Speakes-Bachman continued. “RGGI’s allowances also are producing economic as well as environmental benefits, and other steps may be needed. Basically, I’m saying all-of-the-above. If we’re going to focus on GHG reductions, we need to set our goals accordingly.”

More advanced nuclear and carbon capture and storage (CCS) research is needed to accelerate GHG reductions, added Armand Cohen, executive director of the Clean Air Task Force. “We need to get CCS costs down to about the level of scrubbers, which China is finally adopting,” he told NARUC’s Gas and Energy & Environment committees. “One of the ironies of gas’s predominance in carbon reduction is that it’s scaring a lot of research investment from CCS and advanced nuclear.”

Set targets

The US could export CCS technology to other countries if it decides to become that technology’s leader, Cohen said. “But it has to get serious about R&D,” he maintained. “A lot of successful technological innovation has come from setting targets. That’s how we’re reducing pollution from cars. But it’s not the only way.”

Many manufacturers have switched to gas from coal because of its low price, said Francis O’Sullivan, executive director of MIT’s Energy Sustainability Challenge Program. That price is making some producers shut wells in and discouraging more development, he added.

“The sooner we see some price stability—$5 gas is about equal to $30 oil—the sooner we’ll see some stability,” O’Sullivan said. “But it’s not certain whether the switch to gas from coal can be sustained in a moderate price scenario.”

Matthew Most, vice-president of demand development and policy at Encana Natural Gas Inc., said GHG emissions have been dropping since 2007. “It reached an inflection point around 2011, when gas prices dropped to the $2 range and gas began to take a bigger power generation market share,” he said. “We’ve seen announced retirements by 2025 of about 50 Gw out of the 250 Gw coal fleet.”

Gas penetration into transportation presents further GHG reduction opportunities, he told the committees. Encana Corp.’s oil and gas divisions have begun to run more of their rigs with gas instead of diesel fuel, and the company is involved in a pilot train project from Alberta’s oil sands at Fort McMurray, Most said. “Unlike what the Waxman-Markey bill proposed, these emissions reductions are being accomplished at low or no costs,” he indicated.

Costs and climate

Some state utility regulators at the committees’ joint session clearly were concerned about carbon reduction programs’ potential costs to manufacturers, businesses, and consumers.

Texas Railroad Commission Chairman Barry T. Smitherman, who also chairs NARUC’s Gas Committee and who organized the session, said that manufacturers expressed concern when the US House passed Reps. Henry J. Waxman (D-Calif.) and Edward J. Markey’s (D-Mass.) bill which would have established a domestic cap-and-trade program in 2007.

Paul J. Roberti, a member of Rhode Island’s public utilities commission, said the budget for energy efficiency in the state now exceeds what is spent for pipeline safety there.

“We’re the ones—not [the US Federal Energy Regulatory Commission]—who face consumers when they can’t pay their bills,” he observed.

But Jeanne M. Fox, a member of New Jersey’s public utilities board who chairs NARUC’s Energy & Environment Committee, said Superstorm Sandy and other unusual weather events during 2012 in her state show that more serious work needs to be done to address climate change.

Contact Nick Snow at nicks@pennwell.com.

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