Risking Our Clean Energy Future by Gambling with an Overreliance on Natural Gas

, director of state policy & analysis, Clean Energy | March 10, 2015, 8:07 am EDT
Bookmark and Share

Many U.S. electric utilities are doubling down on natural gas to generate power as they retire aging and polluting coal plants. While this unprecedented shift does provides some near-term benefits, dramatically expanding our use of natural gas to generate electricity is an ill-advised gamble that poses complex economic, public health, and climate risks.

The Natural Gas Gamble, a new UCS analysis, shows that a far better bet for achieving a clean energy future is to greatly expand the use of renewable energy and energy efficiency. By choosing this pathway and avoiding an overreliance on natural gas, we can ensure a more consumer-friendly, resilient, and diversified electricity system, while also delivering cost-effective carbon dioxide (CO2) emissions reductions and improved public health.

Rewards and risks of the natural gas surge

Recent increases in domestic supplies of natural gas and resulting low prices have impelled utilities and power producers across the country to become more greatly dependent on natural gas. And the transition toward greater use of natural gas has been particularly dramatic in a number of states. Florida, for instance, the third-largest electricity producer in the United States, now generates 62 percent of its electricity from natural gas—up from 44 percent just a few years ago. All told, 16 states generated more than one-third of their electricity from natural gas in 2013, with several of these states now using natural gas to generate nearly two-thirds or more of their electricity.

Credit: Duke-Energy/Creative-Commons (Flickr)

Credit: Duke-Energy/Creative-Commons (Flickr)

The burning of natural gas instead of coal to generate electricity does offer important and immediate benefits, including reduced air and water pollutants, fewer smokestack carbon emissions, less power plant water use, greater flexibility of the power grid, and an economic boost to some regions of the country.

But these rewards must be carefully weighed against the risks of natural gas as the electricity sector’s new primary fuel of choice. Central among them is historical and ongoing natural gas price volatility, which can lead to higher electricity prices. Price spikes not only harm consumers and the economy, but can also create perverse incentives for utilities to switch back to using old and polluting coal plants.

In addition, while natural gas plants’ smokestack emissions are significantly cleaner than those of coal plants, natural gas is still a fossil fuel that contributes to climate change when combusted. Even more concerning is that the extraction, distribution, and combustion of natural gas results in the leakage of methane, a powerful global warming gas 34 times stronger than carbon dioxide at trapping heat over a 100-year period. Methane leakage diminishes the climate advantages of natural gas over coal. Natural gas extraction and transport also threaten to degrade local land, air, and water resources and raise legitimate public health and safety concerns.

Our analysis found that staying on our current electric sector trajectory would put the United States on a pathway of greater natural gas use, rising carbon emissions, and higher natural gas and electricity prices. In a Business-as-Usual scenario, we found that total natural gas use will increase by nearly 18 percent between 2013 and 2040, with the power sector representing the largest share of this increase at 49 percent. Additionally, natural gas prices would be 2.3 times higher for the power sector in 2040 than in 2013, and average consumer natural gas prices would nearly double over the same time period. This is clearly the wrong path for the United States.

Investing in renewable energy and energy efficiency is a better path forward

Where natural gas consistently comes up short, renewable energy and energy efficiency delivers. These technologies are already ramping up quickly across the country and demonstrating that they can supply affordable, reliable, and low-carbon power.

Rather than making a wholesale switch to natural gas, our research shows that investing more heavily in renewable energy and energy efficiency offers a smarter, faster, and less risky means of achieving a more affordable, reliable, and diversified electricity system that delivers not just short-term economic and environmental gains but also long-term reduction of emissions causing climate change.

Using the Energy Information Administration’s National Energy Modeling System, we analyzed the effects of climate and clean energy policy scenarios on the electricity sector, consumers, the economy, and carbon emissions. In our core policy scenario, we examined the effects of a federal carbon emissions reduction standard on the power sector complemented by a suite of federal renewable energy and energy efficiency policies.

Pursuing this strategy could cut power plant carbon emissions 55 percent below 2005 levels by 2025 and 70 percent by 2040 (Figure 1). In fact, investing in greater amounts of renewables and efficiency would deliver an additional 6.8 billion metric tons of carbon dioxide emission reductions cumulatively by 2040 than by implementing a carbon standard alone. These cumulative additional emissions savings are more than 3.3 times larger than the total power sector carbon emissions in 2013.

Figure 1. U.S. Power Plant CO2 Emissions. Because CO2 persists in the atmosphere, we must lower CO2 emissions as quickly as feasible to limit climate risks. Implementing a combination of policies, including a carbon standard and strong renewables and energy efficiency policies, could cut power plant carbon emissions 55 percent below 2005 levels by 2025 and 70 percent by 2040 (dark green line). A carbon standard alone (light green line) would lead to lesser reductions, and they would occur later than with this combination of policies. The shaded area between these two lines represents additional cumulative emissions of 6.8 billion metric tons of CO2 that would result from this delay. Without any new policies, emissions will continue to grow, increasing 12 percent above 2013 levels and nearly reaching 2005 levels by 2040 (red line).

Figure 1. U.S. Power Plant CO2 Emissions. Because CO2 persists in the atmosphere, we must lower CO2 emissions as quickly as feasible to limit climate risks. Implementing a combination of policies, including a carbon standard and strong renewables and energy efficiency policies, could cut power plant carbon emissions 55 percent below 2005 levels by 2025 and 70 percent by 2040 (dark green line). A carbon standard alone (light green line) would lead to lesser reductions, and they would occur later than with this combination of policies. The shaded area between these two lines represents additional cumulative emissions of 6.8 billion metric tons of CO2 that would result from this delay. Without any new policies, emissions will continue to grow, increasing 12 percent above 2013 levels and nearly reaching 2005 levels by 2040 (dark gray line).

This would not only be a meaningful contribution toward a global effort to help limit some of the worst consequences of climate change; it can be done cost-effectively while providing substantial societal benefits. In 2020, the net societal benefits (e.g. improved public health, reduced environmental impacts) of pursuing these reductions in carbon emissions and other harmful pollutants are 2.6 times greater than the consumer compliance costs, or nearly $36 billion. By 2040, the benefits grow to nearly $170 billion (Figure 2).

Figure 2. Benefits and Costs of Policies That Limit Carbon Emissions, relative to Business as Usual Scenario. the benefits of transitioning to cleaner power clearly outweigh the costs. “Compliance costs” are the incremental costs of deploying a cleaner generation mix in our Carbon Standard plus Renewables and Efficiency Policies Scenario relative to costs included in our Business as Usual Scenario. “Benefits” are the monetized damages avoided by reducing emissions of carbon dioxide (CO2), sulfur dioxide (SO2), and nitrogen oxides (NOx).

Figure 2. Benefits and Costs of Policies That Limit Carbon Emissions, relative to Business as Usual Scenario. The benefits of transitioning to cleaner power clearly outweigh the costs. “Compliance costs” are the incremental costs of deploying a cleaner generation mix in our Carbon Standard plus Renewables and Efficiency Policies Scenario relative to costs included in our Business as Usual Scenario. “Benefits” are the monetized damages avoided by reducing emissions of carbon dioxide (CO2), sulfur dioxide (SO2), and nitrogen oxides (NOx).

Implementing a carbon standard along with renewable energy and energy efficiency policies also results in long-term savings on consumer energy bills as it cuts carbon emissions and raises carbon revenues. Investments in renewables and efficiency and higher natural gas prices, caused in part by fuel switching to replace power from some coal plant retirements, result in net costs of $19 billion in 2020. However, consumers would see annual net savings of $40 billion by 2030, rising to $59 billion by 2040.

Furthermore, increasing the share of renewable energy and energy efficiency is an important way to hedge against economic risks in a future including uncertain natural gas prices. For example, our core policy case results in a total electricity resource mix portfolio that is 14 percent less sensitive to long-term fluctuations in fossil fuel prices.

Choosing a truly clean energy future

The choice is clear. As the nation moves away from coal, setting course toward a diverse supply of low-carbon power sources—made up primarily of renewable energy and energy efficiency—is far preferable to a wholesale switch to natural gas. For its part, natural gas could still play a useful—but more limited—role in the transition to a clean energy system, not as a replacement for coal but rather as an enabler of grid flexibility in support of renewable technologies.

To accelerate and maximize the use of renewable energy and efficiency in this transition will require stronger climate and clean energy policies nationwide, as well as appropriate planning and decision making by regulators, grid operators, utility companies, and power produc­ers. By making smart energy choices today, we can transition to a more consumer-friendly and resilient electricity system, achieve cost-effective carbon dioxide emissions reductions, and face fewer risks stemming from an overreliance on natural gas.

That’s a bet you can bank on.

Posted in: Energy, Global Warming, Uncategorized Tags: , , , , ,

Support from UCS members make work like this possible. Will you join us? Help UCS advance independent science for a healthy environment and a safer world.

Show Comments


Comment Policy

UCS welcomes comments that foster civil conversation and debate. To help maintain a healthy, respectful discussion, please focus comments on the issues, topics, and facts at hand, and refrain from personal attacks. Posts that are commercial, self-promotional, obscene, rude, or disruptive will be removed.

Please note that comments are open for two weeks following each blog post. UCS respects your privacy and will not display, lend, or sell your email address for any reason.

  • greenthinker2012

    The Union of Concerned Scientists doesn’t actually care if you are a scientist.
    To join just give them your money and then you can pretend you are a scientist too!

    • Ike Bottema

      It could more accurately be named “The Union of Unconcerned about Science”

  • Dr. A. Cannara

    As Mann says, why do self-anointed “concerned scientists” not show concern for the safest most reliable & clean source of power — nuclear — that climate and other scientists publicly advocate? Do UCS folks suggest James Hansen, Ken Caldeiar… are somehow ignorant of what’s necessary to stem the approaching emissions disaster?
    http://tinyurl.com/kn22qcn
    http://www.dailymail.co.uk/news/article-2486894/Scientists-urge-climate-groups-nuclear-power-warn-wind-solar-fulfil-worlds-energy-needs.html
    http://decarbonisesa.com/2014/06/30/another-climate-scientist-joins-calls-for-nuclear/
    http://www.sunshinecoastdaily.com.au/news/scientists-tell-greenies-embrace-nuclear-save-plan/2502717/
    http://www.coastreporter.net/climate-scientist-says-rational-threat-assessment-needed-for-nuclear-power-1.1776075
    https://www.youtube.com/watch?v=lXTPKGuQhzQ&feature=youtu.be
    http://thoriumforum.com/open-letter-those-influencing-environmental-policy-opposed-nuclear-power
    http://tinyurl.com/m5qp8vf
    http://dotearth.blogs.nytimes.com/2014/01/24/more-views-on-nuclear-power-waste-safety-and-cost/?_php=true&_type=blogs&_php=true&_type=blogs&_r=1
    http://www.slideshare.net/Revkin/dot-nuclear-1-2214-lettersigned-by-4-nuclear-scientists-and-engineers
    https://www.facebook.com/download/823098194404759/An-Open-Letter-to-Environmentalists.pdf
    https://www.youtube.com/watch?v=IzbI0UPwQHg
    http://atomicinsights.com/atomic-show-234-update-from-south-australia/

    Even the Dalai Lama seems to show more grasp of reality than UCS…
    http://tinyurl.com/82o6etd

    Is UCS intent on historical self-embarrassment? Or is it just a bureaucracy that can’t admit that its past pseudo-support for nuclear was actually anti-nuclear, as expressed by ‘scientists’ like Lyman who never responded to specific critiques?

    Our descendants might like to know who made their futures more challenging than necessary.

    Dr. A. Cannara
    650 400 3071

  • Michael Mann

    Why is the safest, cleanest, most reliable and the current producer of 2/3 of low carbon energy completely ignored in this article?

  • Ops45

    Why is it that the authors of this nonsense can make the claim that new technology in the wind and solar power production can produce cleaner, cheaper electric power while ignoring the advances in technology in the production and use of natural gas to produce power? Adding solar power and wind power to an existing grid means significant and expensive changes to manage power that varies as a function of time of day, cloud cover, and a host of factors requiring minute by minute management of the entire grid’s power production. Add a new generator powered by natural gas, and the power is deliverable on demand, 24×7, independent of the time of day or local weather.

    Any mention of the pollution caused to ground water from the propylene glycol antifreeze required for de-icing those long blades on the wind turbines? Yes, we need antifreeze in our ground water. How about the ecological impact of bird kills? Duke Power already paid $1 million in fines for wind turbine kills of protected eagles in Wyoming.

    The great solar revolution in Germany has produced electric power rates four times higher than rates in the US, and Germany is building over 10GW of new coal-fired power plants.

    • Southernfink

      Too easy – wind & solar generated electricity is free from burning hydrocarbons, that why it’s cleaner !

      • Michael Mann

        What is used to make solar panels and wind turbines? How much mining and energy does the manufacturing and transporting of these things take? Is it clean, really? Please don’t ignore the truth for an easy answer, there is no free ride, there are consequences.

      • Southernfink

        Please don’t ignore the truth – how pretentious.

        Any wind & solar generated electricity is clean energy.

        Even Columbus only needed the wind to find ”America”.

      • Michael Mann

        I understand, you do not wish to see the truth, that is your choice….

      • Ops45

        If you’d like to try and travel the oceans using only wind power, be my guest . . . just don’t expect to get anywhere fast, or even plan on arriving when you want to.

        Why no response to “Any mention of the pollution caused to ground water from the propylene glycol antifreeze required for de-icing those long blades on the wind turbines? Yes, we need antifreeze in our ground water. How about the ecological impact of bird kills? Duke Power already paid $1 million in fines for wind turbine kills of protected eagles in Wyoming.”

        Have you looked at the ecological damage caused by the production and disposal of solar panels? Not clean. And where does the power come from at night and when the weather does not provide wind?

        Who is invested in the Ivanpah solar plant? Eric Schmidt and the Schmidt Family Foundation used federal loans to cover the billions it cost to build it. Did you know that Ivanpah has applied for permission to use additional natural gas to operate their solar powered systems? Here’s a few quotes from the application to run the auxiliary boilers, powered by . . . natural gas . . .

        “Actual operation of the plants informs the need for additional fuel use during some days to compensate for intermittent cloud cover in order to maintain peak power production and
        prevent the steam turbine from tripping off line.”

        “When cloud cover is dense enough and/or persists long enough to trip the plant offline, steam generated by the auxiliary boilers is needed to restart solar power production.”

        “Auxiliary boiler operation is needed at the end of the day to stabilize/support steam turbine operation, particularly during the peak summer period, to maximize the capture of solar energy as solar insolation declines.”

        Did I read that right? Steam generated by the auxiliary boilers is needed to restart solar power production? Your world-class solar plant can’t produce energy unless the process gets a jump-start from a natural gas-fired boiler? And the operators have noticed that power generated from solar can be . . . . intermittent? What a surprise.

        Superb engineers of ways to take federal dollars and spend it on expensive toys that do not work as advertised, the rich folks behind all the renewables hype . . . a clean revolution in fleecing taxpayers.

  • 3GSimpleton

    Renewable energy is a sad joke at best, and a criminal fraud perpetrated on the public at worst.

    Here is the good news:

    North America has an abundance of natural gas, which will provide a clean (and by clean I mean stack emissions are much less polluting than other options, and I do not consider CO2 to be pollution at all) and reliable source of energy for a long time to come.

    As to the methane leakage, this can and should be addressed, as it is silly to squander perfectly good fuel we can burn to generate energy. We ought to conserve what we can. In any case, any seepage will be dwarfed by what the planet releases naturally, so it will be less than a drop in a bucket.