How Natural Gas Factors into Our Energy Future
November 4, 2019
By Stacey Atella
Project Manager, Environmental Division
As developed nations around the globe focus their efforts on plans to reduce carbon emissions, I find myself pondering the fate of the natural gas industry. As someone who’s been working in the industry since the 1990s, I’m asking myself, “What in the world does my career look like for the next 20 years?”
Is natural gas a player in the shift to a global lower-carbon economy?
As members of the energy industry, we share a commitment to providing environmentally responsible energy. But as we all know (but don’t often want to admit), we cannot produce energy without having some type of impact on the human or natural environment. This could be permanent scarring from surface mining, land disturbance from oil and gas extraction and transmission, large volumes of water consumption to cool nuclear reactors, or avian impacts from collisions with turbine blades and transmission lines.
But don’t be dismayed! I’m happy to report that the answer to all of our energy needs is very simple… unobtainium! You know, a magical energy producing element that appears out of nowhere, requires no land, weighs nothing, emits nothing and is affordable.
All joking aside though, until we discover unobtainium, natural gas will play a key role in the transition to a lower-carbon economy by providing a safe, reliable and low-cost source of energy.
Isn’t natural gas one of the “bad guys” in energy?
At this point you might be asking, “Isn’t natural gas one of the bad guys? One of those evil fossil fuels?” Well, despite the negative press, the reality is that natural gas provides substantial environmental and economic benefits in the United States and abroad. Consider this:
- Between 2010 and 2018, the global impact of switching from coal to gas reduced CO2 emissions by over 500 million tonnes[i]. To put that into perspective, that’s the equivalent of 56 billion gallons of gasoline consumed, or 106 million passenger vehicles driven for one year[ii].
- A little over a decade ago, our nation was heavily dependent on foreign oil imports. Today, the U.S. is projected to become a net energy exporter in 2020[iii], owing to abundant natural gas reservoirs and the shale revolution.
- Over the past two decades, natural gas has helped speed the transition from coal generation while also maintaining electric power reliability. Likewise, natural gas will be needed to balance and fuel the growth of renewables. The low cost of natural gas helps make renewables more affordable for consumers and when it is used as a “backstop” for renewables, the overall costs of electric power decrease[iv].
Our national energy economy has never been all or nothing. Even our earliest ancestors relied on multiple forms of energy—the wind, sun and rivers. Today is no different. Our future requires a mix of environmentally responsible generation that includes wind, solar and natural gas.
What role will natural gas play?
In a lower-carbon future, natural gas will play several key roles.
- Developing Nations
Natural gas has a vital role to play in helping developing nations. Having access to affordable, reliable energy can lift these nations out of poverty, allow their economies to develop, and improve air quality and health. According to the International Energy Agency[v], in 2017:
- Nearly one billion people did not have access to electricity, including 603 million people in Africa alone. For African households and businesses that do have electricity, it is wildly unreliable. When blackouts occur, they are typically mitigated using expensive backup power that is often produced by highly polluting diesel engines.
- Just under 2.7 billion people lack access to clean cooking fuels. In 25 countries, mostly in sub-Saharan Africa, more than 90% of households rely on wood, charcoal and waste for cooking. Reliance on these fuel sources contributes to deforestation, and the noxious fumes generated are linked to 2.6 million premature deaths annually.
Natural gas has the power to promote prosperity and quality of life in developing nations, while simultaneously helping to reduce carbon emissions in those countries.
- Firming Renewables
As I’ve already alluded, natural gas will continue to play an important role in supporting renewable generation and maintaining electric system reliability. The inherent variation and unpredictability in renewable generation pose challenges because of the misalignment between when renewable generation is available and when generation is needed to meet electrical demand. Battery storage by itself is not expected to completely mitigate intraday, day-to-day and seasonal variabilities.
Despite the significant drop in costs, lithium-ion battery storage still remains more expensive than gas peaking capacity. At a 30% load factor, the current levelized cost of energy storage ranges from $330 to $780/MWh as compared to $71 to $101/MWh for gas peaking generation[vi].
It’s also worth noting that battery installations will experience cycling degradation. To maintain storage capacity levels, battery capacity would either need to be overbuilt or replaced after degradation. Either scenario would result in additional costs to consumers. Once the batteries reach their end of life, there is the added cost of recovering valuable materials like cobalt, nickel and copper, then disposal of the remaining battery components.
Natural gas provides flexible, fast ramp-up generation and serves to complement renewable generation. The partnership between natural gas and renewables will allow us to better forge a cleaner energy future.
- Global Product Demand
Face it, we live in a consumer-driven society. The growing global economy, rising population and technological developments all contribute to a sharply rising demand for consumer goods and services. Oil and natural gas liquids are key feedstocks to the petrochemical industry and are crucial to the manufacture of many products that satisfy this rising demand. These include products we use every day, like phones, clothing, plastics, detergents, packaging, tires and medical equipment.
Petrochemicals are also found throughout our energy system, in solar panels, wind turbine blades, batteries and electric vehicle parts[vii]. It is no surprise that petrochemicals are rapidly becoming the largest driver of global oil consumption.
On the home front, the U.S. has approximately 40% of the global capacity to produce ethane-based petrochemicals, thanks to the shale gas revolution[vii]. The petrochemical industry supports over a half-million American jobs[viii].
- Baseload Supply and Exports
Natural gas will continue to be a major player in our national baseload energy mix as well as exports, owing in large part to its continued low cost. U.S. Energy Information Administration projections through 2050[ix] suggest that:
- The combination of low natural gas prices and increasingly favorable costs for renewables will result in natural gas and renewables being the primary sources of new generation capacity.
- Continued growth in natural gas production will support increasing natural gas exports and domestic consumption, particularly in the industrial and electric power sectors.
In 2018, natural gas represented 31% and renewables accounted for 11% of total domestic energy consumption. By 2050, consumption is projected to increase to 34% and 13%, respectively. Additionally, natural gas contributed to 17% of total energy exports in 2018 and is projected to reach 34% by 2050 [ix]. If these projections hold true, the future for natural gas looks bright.
These are just some of the ways that natural gas will play a vital role in maintaining and promoting social and economic health both domestically and abroad.
What’s next for natural gas?
Even though the future looks bright for natural gas, it doesn’t mean that there isn’t room for improvement. As the global standard of living improves, the energy sector is tasked with not only meeting the associated rising energy demand, but also meeting the growing expectation to reduce carbon emissions. The main call to action for the natural gas industry is to reduce methane emissions, which also means reducing waste of a commodity that has increasing market size, especially with the growth of liquefied natural gas exports. So what can be done? Following are a few of the options being discussed by our peers.
- Reduce or eliminate gas flaring through the use of technology and operational practices, which could include:
- Using meters to directly measure flared gas volumes.
- Deploying technologies that improve combustion efficiency.
- Applying technologies to keep gas in the reservoir (e.g.: inflow control devices within oil wells, gas breakthrough control technologies at the surface).
- Evaluating opportunities to directly use the gas or reinject it into oil fields for enhanced oil recovery.
- Invest in the development of low-cost leak detection and repair technologies, such as unmanned aerials vehicles, vehicle-mounted sensors or stationary continuous monitors.
- Evaluate equipment upgrades or technology to more effectively capture methane, which might include:
- Installing vapor recovery units or plunger lifts.
- Using lower-emitting devices (e.g.: air-driven, low-bleed or pneumatic controllers).
- Replacing rod packing on reciprocating compressors.
- Investing in carbon capture/sequestration infrastructure.
Check out the INGAA Foundation’s website for more information on ways that natural gas companies are committing to reduce methane emissions.
Whether it’s the oil and gas, wind or solar industry, there will always be impacts associated with—as well as room for improvement in—the ways we harness, transport and use energy. So until we discover unobtainium, I see natural gas playing an important role in our energy future, alongside a flourishing renewables industry.
About the Author:
Stacey Atella serves as the Natural Gas Practice Lead for POWER Engineers. For more than two decades, she has provided regulatory compliance and project management support for major natural gas pipeline systems across the country. With a technical background in critical issues analyses, planning, permitting, training program development, and construction compliance management, she brings a holistic perspective to project development that begins with the end in mind. As the energy landscape changes, Stacey has taken a keen interest in the role natural gas will play in supporting cleaner power and renewables integration into our national energy economy. Have questions for Stacey? Send her an email at email@example.com.
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[ii] United States Environmental Protection Agency (2018) Greenhouse Gas Equivalencies Calculator (updated December 2018), https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator)
[iv] Interstate Natural Gas Association of America (2019) Natural Gas & Renewables: Working Together (April 1, 2019), https://www.ingaa.org/File.aspx?id=30374&v=b0798882.
[vi] Interstate Natural Gas Association of America Foundation (2019) The Role of Natural Gas in the Transition to a Lower-Carbon Economy (May 7, 2019), prepared by Black & Veatch Management Consulting, https://www.ingaa.org/File.aspx?id=36501.
[vii] International Energy Agency (2018) The Future of Petrochemicals Towards More Sustainable Plastics and Fertilisers (October 5, 2018), https://webstore.iea.org/the-future-of-petrochemicals.
[viii] United States Department of Energy, Fossil Energy (2019) The Appalachian Petrochemical Renaissance (July 31, 2019), https://www.energy.gov/fe/articles/appalachian-petrochemical-renaissance-within-reach.