Natural Gas – taking the long way round to a better climate

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According to a recent study, use of natural gas won’t be contributing to reducing the impacts of climate change in the near future. What’s more, the additional market effects that stem from increased production and use of natural gas will almost certainly hinder actual progress towards a cleaner energy market.

Research groups from Germany, USA, Austria, Italy and Australia were involved in the study which was published in Nature (16 October 2014). The researchers projected what the world be like in 2050 with and without a rise in natural gas. Each research group used an independently developed computer model that factored in not just global energy use and production, but also the behaviour of the global economy and climate in response to a boom in natural gas. It was this use of ‘integrated assessment models’ addressing global energy–economy–climate systems that sets the study apart from others, allowing for comprehensive analysis of the impact of global deployment of advanced natural gas production.

Natural gas has been subject to divergent interpretations and fierce debate in recent years. It’s been touted by some as a cleaner energy resource that could fill much of our energy requirements at low costs, whilst helping to reduce greenhouse gas emissions as we transition towards renewable energies. We can refer to this as the energy-bridge argument.  To others however, natural gas and particularly the extraction technique of hydraulic fracturing (or fracking) for shale gas amounts to little more than another carbon-based energy that, while cleaner than coal or oil, still results in emissions and brings with it a myriad of additional environmental concerns.

Debate aside, in North America there has been a massive increase in natural gas in the last decade due to the advent of sophisticated fracking technologies that have opened up access to a massively abundant resource. It’s a trend that parts of northern Europe, in particular the UK, are currently set to follow in the near future years. But with large natural gas reserves spread around the world, the potential for natural gas is enormous – the researchers projected natural gas consumption of up to 170% by 2050.

 

Market Effects

What the new study demonstrates is that the energy-bridge argument’s vision of massive energy production whilst reducing harmful emissions along the way is a fallacy, and a dangerous one at that. The study provides a comprehensive economic forecast as deployment of natural gas increases – it outlines that as deployment rises, production and distribution costs reduce and natural gas will grow radically cheaper. This much we could have anticipated already, but the crux of the study is how it contextualises the consequences of this in regard to the global energy market. With a global abundance of cheap natural gas we’ll see the rise of a powerful energy industry; natural gas will compete aggressively with coal and oil, but also with renewable energies. This competition is projected to be sufficient enough to result in decline in use of renewable energies such as wind and solar power, as well as nuclear.

We may imagine a decline in renewables in response to an expansion of natural gas to manifest in several ways. For one, private investment in renewable energies may face harsher competition in view of cheap alternatives.  Secondly, it’s foreseeable that governments would have less incentive towards subsidising and supporting renewables when cheap and abundant energy from natural gas is readily available.

In this way, the growth of natural gas will produce effects in the energy market that are very likely to undermine potential reductions in emissions by inadvertently lessening the market share and application of renewables.

A second issue that the study expands upon is the consequences of lowered energy prices as a result of an abundance of cheap natural gas being used in production of electricity. Lowering energy costs brings benefits, for instance it accelerates economic growth. But lower energy prices and economic growth are both known precursors to increases in energy consumption – the net result of which is increased energy production and higher emissions.

“The high hopes that natural gas will help reduce global warming because of technical superiority to coal turn out to be misguided because market effects are dominating. The main factor here is that an abundance of natural gas leads to a price drop and expansion of total primary energy supply.”

Co-author Nico Bauer of the Potsdam Institute for Climate Impact Research

 

Natural Gas Emissions

The study also considered conditions in which natural gas will add to climate change more directly. While direct emissions of natural gas are roughly half the level per unit of energy compared to coal, expanded use of natural gas could negate these low-emission effects. There are also non-CO2 greenhouse natural gas emissions (notably methane) involved in the production process that add to global warming.  When considering the full life cycle of the energy source (accounting for emissions from raw materials, through production and then final use) natural gas involves non-CO2 chemicals that contribute to global warming in instances by amounts higher than coal or oil. Lastly, increases in production and distribution of natural gas will inevitably lead to a higher incidence of gas leakage too, which the researchers concluded would, even under conservative estimates, be adding in measurable manner to climate change.

“The effect is that abundant natural gas alone will do little to slow climate change”

Lead author Haewon McJeon, an economist at the Department of Energy’s Pacific Northwest National Laboratory

Adding these factors together, the study concludes that the impact of natural gas on lowering CO2 emissions would be marginal in the very best-case scenario (-2%) and counter-productive (increasing CO2 emissions by 11%) in the model predicting the worst case outcome. The majority of the models predicted that a more likely outcome lies between a negligible decline (−0.3%) and a moderate increase (+7%) in CO2 emissions.

 

The Bottom Line

In short, the study is a large blow to the two major plays of the energy-bridge argument. One, that adopting natural represents a viable intermediate ‘cleaner’ stepping stone on the way to a carbon-free future – it doesn’t, and is actually more likely to delay transitioning to renewables by detracting investments away from, and competing with, renewables. And two, that natural gas will help us towards reducing greenhouse emissions – not likely either; potential greenhouse emission savings are marginal to non-existing in the long term if natural gas production and distribution increases as rapidly as predicted in response to its cost reductions.

 

So What Now?

Natural gas is a plentiful and flexible resource; it has a relatively low emission signature, and combined with efficient power generation technologies, such as Combined Cycle Gas Turbine (CCGT), it can reach energy conversion efficiencies of about 60% (which is very high indeed). These points are hard to ignore as we seek out cleaner energy solutions. But the label of ‘the cleanest of all fossil fuels’ warrants skepticism in the same vein as the lesser of two evils deserves caution. This study demonstrates that with natural gas this is most certainly the case.

Supporting the deployment of a new carbon industry (in countries such as the UK) at this stage in the climate change story, with all that we know about the negative consequences of greenhouse gases, to put it mildly, always seemed counter-intuitive. Now we have the modelled scenarios demonstrating exactly why and how natural gas won’t be living up to its having been heralded as a part of the climate change solution.

Perhaps in its simplest interpretation, the study spells out why natural gas should have little place in any genuine attempt to begin taking climate change seriously and committing to a program of renewable energy production. It’s all too easy to see the energy-bridge argument for natural gas as short-sighted; a profit driven and perhaps easier approach to reduce emissions. Given the inherent nature of natural gas it’s unsurprising that we now have a study such as this, portraying how in actuality natural gas is ultimately counterproductive in respect to building a cleaner world.

But to be sure, this study’s conclusions are far from a death knell for natural gas – the deployment of which will undoubtedly continue unabated. The simple truth is that the profits to be had are too great to pass up and there are powerful groups advocating for the natural gas enterprise – for the most part oil companies (who hold the experience and technical expertise of how to go about exploiting another natural resource from the Earth).

So what then can be taken from the study and applied to the energy industry and government discussions? Principally, the need to acknowledge that natural gas is harmful to the environment – drop the politically labeled term ‘clean’, since it’s nothing if not misleading and falsely frames any discussions on the matter henceforth. Second to this, we should take the findings as a clear warning that if we are to introduce a wave of new natural gas (and it seems the powers that be are intent on it), then we should heed the call of lessons learnt from how traditional carbon industries acted with regard to emissions and ensure that appropriate policies are in place which moderate the growth of the natural gas industry and ensure its emissions are duly compensated for.

“The findings show that effective climate stabilization can be achieved only through emissions pricing – this requires international political cooperation and binding agreements. Technological advances can reduce the costs of climate policies – but they cannot replace policies.”

Ottmar Edenhofer, chief economist of PIK and co-chair of the working group on mitigation of the Intergovernmental Panel on Climate Change (IPCC)

Equally we see that renewable energies will remain susceptible to external forces in the energy market for some time. With the clear and present threats of climate change, we need therefore to maintain support and incentives for the research and deployment of renewables to the extent that they’re beyond risks of marginalisation by the expansion of natural gas.

There is something rather sad about this news; something that prompts a feeling of despair. That in spite of all efforts going into renewable energy technology, the great potential we have for clean energy and the changes we’re seeing in combatting climate change, there are those who are purposely going about establishing new natural gas facilities, developing technologies to fill them with, and that there are governments to support them. Such circumstances beg the question of whether we’re destined to scour the Earth for every last drop of oil, lump of coal and pocket of gas. Were we to pursue genuine solutions to climate change with such zeal, perhaps then we would be taking something other than the long way round to a cleaner world.

 

References and Resources

News release from the Potsdam Institute for Climate Impact Research

News release from the Pacific Northwest National Laboratory

Nature article:  McJeon, H., Edmonds, J., Bauer, N., Clarke, L., Fisher, B., Flannery, B.P., Hilaire, J., Krey, V., Marangoni, G., Mi, R., Riahi, K., Rogner, H., Tavoni, M. (2014): Limited impact on decadal-scale climate change from increased use of natural gas. Nature – advance online publication [DOI:10.1038/nature13837]