Energy & Environment

Is natural gas a fossil fuel substitute, or does it just crowd out renewables?

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Natural gas is consumed more flexibly than any other fossil fuel. Whereas coal is deployed primarily for electricity generation and oil for transportation, natural gas straddles the energy economy with uses spanning electricity, industry, residential and commercial heating, and transportation. Emerging technologies opening more abundant supplies of natural gas have heightened its importance, while world leaders increasingly seek solutions to climate change.

{mosads}The flexibility of natural gas means that its substitutions for other fossil fuels can impact climate warming emissions upward (via methane leaks and carbon dioxide exhaust) or downward (via reduced use of coal and oil). That’s why Shayak Sengupta and I worked in 2012 and 2013 to compare the net greenhouse gas impacts of various substitutions of U.S. natural gas for other fossil fuels.

Using the best available data and tools such as Argonne National Laboratory’s GREET (Greenhouse Gases, Regulated Emissions and Energy Use in Transportation) model, we compared the net impacts of substituting natural gas for fossil fuels in five ways: replacing coal in electricity generation; replacing heating oil for home heating; replacing gasoline in light-duty cars or diesel in transit buses; or liquefaction to liquefied natural gas (LNG) for export to Japan. However, in the over two years our paper languished in a bottlenecked peer review and publication process before being published late last month, energy markets have evolved so fast that even our questions can be called into question.

Our assumption that natural gas would be substituted for other fossil fuels seemed reasonable. After all, fossil fuels have provided over 80 percent of U.S. energy since 1900. In 2012, solar power was still too expensive to compete with natural gas at utility scales without generous subsidies, and interest in the electricity sector focused on replacing coal with gas. Meanwhile, T. Boone Pickens and some in Congress were promoting plans for millions of vehicles fueled with domestic natural gas, replacing imports of foreign oil.

Using the best available estimates and uncertainty ranges for methane leak rates, our results demonstrated stark differences between the climate impacts of the substitution scenarios. Substituting natural gas for coal-fired electricity yielded the most improvements. Changing out old heating oil furnaces for new natural gas ones, as some utilities incentivize, also fared well. However, contrary to industry boosterism about “clean” vehicles, our analysis showed compressed natural gas (CNG) in cars and buses yields no significant benefits.

One may quibble with our baseline methane leak rates, as scientists tally record emissions from the Aliso Canyon blowout and use satellite data to infer far more methane leaks from U.S. oil and gas operations than Environmental Protection Agency (EPA) inventories would suggest. However, we recognized that scientific understanding is in flux regarding methane fluxes, and provide means for adjusting our baseline results and uncertainty ranges to alternative assumptions.

The bigger question, though, is whether we got our question right. Can we still assume that additions of natural gas substitute for fossil fuels, rather than crowd out deployment of renewables like wind and solar? Is natural gas serving as a rapid off-ramp from coal and oil, bridging toward the renewables-led future that climate scientists deem necessary to avert catastrophic climate change? Or has natural gas become a barrier, competing with renewables as replacements for coal and oil?

Energy markets have transformed while our paper languished in peer review and publishing delays. In 2012, coal provided a relatively low-cost and profitable means of electricity generation. Now, even with Wyoming Powder River Basin coal selling for less than a half penny per pound, coal power plants nationwide are losing money, unable to compete with natural gas and renewables. Transporting fossil rocks and cleaning up the gaseous, liquid and solid byproducts of their use simply costs more than piped-in natural gas or directly delivered sunshine and breeze. Prices for natural gas, wind and solar fell faster than Energy Information Administration estimated to be possible.

As mining companies declare bankruptcy and unprofitable coal power plants shutter even before Clean Power Plan litigation is resolved, the question is not whether coal will be replaced, but with what. A dynamic battleground has emerged between natural gas, which supplied 31 percent of new capacity in 2015, and renewables, which dominate nearly all capacity additions in recent months. The five-year extension of the production and investment tax credits, passed by Congress and signed by President Obama in December, tilts the battleground further toward renewables.

Meanwhile, traditional gasoline and diesel vehicles no longer represent the only benchmark for compressed natural gas (CNG). Emerging technologies will soon make electric vehicles cost-competitive, and even widely available hybrid engines slash emissions relative to CNG.

As coal fades and renewables storm onto an energy battlefield long dominated by fossils, framing natural gas deployment as a battle of fossils seems like fighting the last war. I’ll be my own first critic to say that my not-so-hot-off-the-presses paper hasn’t stood the test of time. After this Pyrrhic publication, I’ll be peering beyond peer review to share Air Climate Energy (ACE) research and analysis with the timeliness they require. Stay tuned as I explore new ways to cover emerging ACE conditions.

Cohan is associate professor of civil and environmental engineering at Rice University.

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