Will a Rick Perry DOE Help Limit a Risky Overreliance on Natural Gas?

, lead economist and climate policy manager | January 12, 2017, 2:43 pm EDT
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Within the next couple of weeks, former Texas Governor Rick Perry will appear before Congress for hearings on his nomination for Secretary of Energy under the Trump administration. Mr. Perry clearly subscribes to an “all of the above” strategy on energy—and that could leave us exposed to serious consumer and environmental risks from an over reliance on natural gas. There is another way: prioritize clean, cost-effective renewable energy.

Texas leadership on renewable energy

Mr. Perry’s track record shows that there is some room for optimism that he understands the economic opportunities that renewable energy can bring and the role that investments in a modernized electricity grid can play in providing clean, affordable energy.

Indeed, Texas leads the nation in the deployment of renewable energy, with wind energy from Texas making up about a quarter of the nation’s total wind generation. In 2016 Texas is estimated to have got nearly 15 percent of its electricity from wind generation. And all that wind that has helped provide low cost electricity, jobs and significant economic benefits for the state.

energy-minigraphic-natural-gas-price-volatility-vs-renewable-energy

But Serious Concerns on Natural Gas

Texas also leads the nation in production of natural gas (and crude oil).

The good news is that cheap natural gas and low-cost renewables are helping drive out polluting coal-fired generation nationwide. (Despite comments from Mr. Trump, most industry experts do not see this trend being reversed.) In its 2016 long term assessment, the Electric Reliability Council of Texas (ERCOT) projects significant coal retirements in the state by 2031 with low-cost solar replacing nearly all of the coal. The public health benefits of this transition away from coal will be tremendous.

But the rub is that low natural gas prices are quickly leading to a risky overreliance on natural gas for power generation, in Texas and elsewhere. Natural gas price spikes caused by weather or other factors can then put consumers at serious risk of increases in electricity prices and the cost of heating—which poses an especially significant hardship to low-income and fixed-income households.

If efforts to expand US LNG exports proceed, there could be further upward pressure on domestic natural gas prices.  (The DOE plays an important oversight role in granting authorizations for exports and imports.)

Furthermore, the “cheap” prices do not reflect environmental concerns related to fracking, including risks to drinking water.  And they do not account for climate concerns: using natural gas to generate electricity leads to carbon dioxide emissions, and methane is emitted during the production, storage and distribution of natural gas.

Methane leakage from oil and gas operations wastes gas, and there are solutions to help reduce it. In fact, the DOE is playing an important role in funding research on innovative solutions to find and fix methane leaks from oil and gas infrastructure.

News stories indicate that Mr. Perry is taking credit for cuts in pollution in Texas related to a shift from coal to gas. There’s more progress that needs to be made in cleaning up the air in Texas. Also, importantly, a coal to gas transition it is simply not sufficient to cut carbon emissions in line with climate (and economic) goals. (Take a look at the new World Economic Forum’s 2017 Global Risks Report which once again points to climate change as one of the leading risks to the global economy.)

Insights from the DOE’s Quadrennial Energy Review

The DOE’s Quadrennial Energy Review lays out a vision for a modernized, more resilient energy system for America. Related to natural gas, the QER highlights the growing interdependence of the power and natural gas systems and the reliability and safety challenges posed by our increased reliance on gas. For example, the report says:

“…overall reliance on gas for electricity has gone up, creating a new interdependence and grid vulnerability.”

and

Aging, leak-prone natural gas distribution pipelines and associated infrastructures prompt safety and environmental concerns. Most safety incidents involving natural gas pipelines occur on natural gas distribution systems. These incidents tend to occur in densely populated areas.”

As head of the DOE, Mr. Perry will play an important role in helping to figure out how to address these types of challenges, in coordination with other stakeholders.

Wide Open for (Renewable Energy) Business

One clear way is diversifying our electricity mix by promoting clean energy sources like wind and solar.  Mr. Perry’s experience in Texas should make clear that leveling the playing field for renewable energy is a very good thing for consumers and for the economy. It means more affordable, clean power and a diversified electricity mix that limits the risk of price spikes. And it helps foster business opportunities and innovation that put the US in a strong position to be a global leader in clean energy.  With China, Germany, India and other nations making a big push on renewables, this is not the time to cede ground on clean energy progress.

However, a cozy relationship with oil and gas interests could jeopardize these opportunities and skew the playing field in favor of fossil fuels including natural gas, with long-term consequences for our economic, energy and climate goals.

A Clean Energy Future

Putting aside the irony of the fact that Mr. Perry once ran on a platform of eliminating the agency he is now in line to lead, if he is confirmed as the Energy Secretary, he must approach the job by putting the public interest ahead of that of fossil fuel companies.

Americans want clean, affordable energy from domestic sources. Surveys repeatedly show that there is strong bipartisan support for renewable energy, with solar energy a strong favorite.

Let’s hope Mr. Perry is listening and will use his new position to foster the clean energy future our country wants and needs, one that limits the risks of an over-reliance on natural gas and advances wind, solar and other forms of clean energy.

 

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  • doubleducks

    Risky natural gas? Seriously? Safe, tried, true, abundant, domestic, and cheap. And these “scientists” insist on truly risky sources such as nuclear and solar? Perhaps “mad scientists” is an apt description of them.

  • solodoctor

    I, too, hope that Perry’s call to eliminate the dept whose name he could not remember at the moment was campaign rhetoric rather than a serious proposal.

    GOOD news that the DOE is funding research to investigate ways to reduce methane leaks. It is known by many that the industry’s estimates of the amount of such leakage are woefully understated. Will Perry/Trump cut the funding for this research?