Earth Protect Blog

Shared from the 2/2/2020 The Denver Post eEdition By Judith Kohler

 Natural gas has long been seen as the fuel to build the bridge to a clean-energy future, one where dirtier-burning coal plants are phased out and homes, factories and vehicles are powered by electricity from wind, the sun and power stored in batteries.

However, as costs of renewable energy projects have plummeted and the number of coal-plant closures in Colorado and other parts of the country has risen, there are questions about the need for natural gas as a bridge fuel. The future that natural gas was supposed to be a transition to is already here, say renewable energy advocates and analysts.

“Our analysis suggests that the bridge is already behind us and it was quite a bit narrower than we thought,” said Mark Dyson, a principal with the Aspen-based Rocky Mountain Institute, a nonprofit research organization that consults with businesses and communities on energy efficiency and renewable energy.

Dyson is a co-author of a 2019 report that said renewable energy is cost-competitive with new natural gas facilities. The report, “The Growing Market for Clean Energy Portfolios,” said wind, solar and battery storage would cost less than 90% of the proposed gas-fired plants. Investments in renewable energy instead of gas plants would save customers more than $29 billion and cut carbon dioxide emissions by 100 million tons, according to the report.

“Our need to keep the lights on is a constant and the physics that govern that will never change, but the economics that dictate the cheapest way to do that are rapidly changing,” Dyson said. “It’s no longer the case that we want big expensive plants that run all the time.”

Natural gas emits about half the carbon dioxide that coal does when it’s burned. That led to the fuel being embraced as part of a cleaner-energy mix or a transition to the time when renewables could supply much of the electricity needed.

But intensifying worry about climate change and declining costs of renewable energy have led to a changing vision of the role of natural gas. While it burns much cleaner than coal, it produces other greenhouse gases.

One of those gases is methane, the main component of natural gas, and it is 84 times more potent at trapping heat than carbon dioxide over about 20 years. But over the long term, methane doesn’t last as long in the atmosphere as carbon dioxide, which keeps trapping heat for a long time.

Emissions from oil and gas production along Colorado’s Front Range are central to health concerns aired by people near drilling sites. Potential health and environmental impacts are being debated as state agencies write new oil and gas regulations and respond to the federal government’s downgrade of the area’s air quality.

Gwen Farnsworth, a senior energy policy adviser with Western Resource Advocates, said going forward, natural gas likely will serve as a backup rather than a baseload fuel. A baseload power source continuously operates to meet basic needs.

Farnsworth noted that Xcel Energy’s Colorado Energy Plan, approved in 2018, includes acquiring existing simple-cycle natural gas plants, which can be fired up quickly but don’t necessarily run continuously. They use less gas than a combined-cycle plant.

Renewable energy advocates and some economists warn that new natural gas plants could become the “stranded assets” coal plants have become. They say their value will decrease because of changes in technology and policies.

“If you are in 2020 considering building a new natural gas generation facility, you are assuming that you will be able to recover the cost of that plant over a 30-year or longer period of time,” said Dennis Wamsted, an analyst with the Institute for Energy Economics and Financial Analysis. “In 30 years, the change in the electricity generation market is going to be so vast that right now we probably can’t even foresee it.

“But the concept that natural gas will still be economical 30 years from now is almost farcical on its face,” Wamsted added.

Letting up on the gas?

The assessment that natural gas won’t be a key part of achieving a clean-energy environment isn’t shared by everyone. Industry representatives in Colorado, one of the country’s top-producing oil and gas states, say natural gas will be needed to meet goals the state, communities and utilities have set to cut greenhouse gas emissions and accelerate the use of renewable energy.

“As of today, there’s no conceivable way to achieve some of these ambitious 2040 or 2050 environmental benchmarks to reduce carbon without clean-burning natural gas,” Dan Haley, CEO and president of the Colorado Oil and Gas Association, said in a statement.

The national trade group American Petroleum Institute is spreading that message through its “Energy for Progress,” a nationwide TV and digital ad campaign that promotes the oil and gas industry as important to the economy and helping address climate change.

The so-called “shale revolution,” propelled by advances in technology such as horizontal drilling and hydraulic fracturing, or fracking, have enabled companies to extract oil and gas from previously difficult to access sites, greatly expanding production. The U.S. has become the world’s leading oil and natural gas producer.

Record high production has kept natural gas prices low, which benefits consumers but not necessarily companies’ bottom lines. After years of investing big in shale companies, Wall Street is demanding that producers borrow less and generate more surplus cash.

Still, industry representatives don’t see gas wells drying up any time soon.

“The fact is, natural gas will continue to grow alongside renewables like solar and wind — which must have a resource with a fast-ramping capability like natural gas as a partner to ensure reliability — while bringing down total energy-related carbon emissions,” Lynn Granger, executive director of API Colorado, said in a statement.

The Rhodium Group, an independent research group, said after rising in 2018 preliminary data indicate emissions fell by 2.1% in 2019. It credits the switch from coal to natural gas and renewables for a majority of the drop.

However, if the U.S. is to reduce overall emissions by 2.8% to 3.2% annually, what’s needed to meet the Paris Agreement targets for avoiding the worst of climate change, it “will require a significant change in federal policy—and pretty soon,” the Rhodium Group said.

The 2015 agreement calls for limiting the global average temperature this century to below 2 degrees Celsius — 3.6 degrees Fahrenheit — and for countries to reduce greenhouse gas emissions as soon as possible. The Trump administration gave formal notice in November that the U.S. will withdraw from the accords.

The U.S. Energy Information Administration says the share of utility-scale electricity coming from natural gas is expected to stay steady, rising slightly from 37% in 2019 to 38% in 2020 and dropping slightly to 37% in 2021.

Coal is headed in the opposite direction. The EIA said 24% of the electricity produced nationally in 2019 was from coal and is expected to drop to 21% in 2020 and 2021.

The trend is clear in Colorado, where Xcel Energy-Colorado, Tri-State Generation and Transmission Association, municipal and not-for-profit utilities are adding more wind and solar and batteries and closing coal plants and coal mines. Economics and mandates for utilities to get a certain amount of power from renewable energy are among the driving forces.

Tri-State CEO Duane Highley said during a Jan. 15 news conference that the utility plans to boost its share of renewables to 50% of its portfolio by 2024.

Xcel Energy’s Colorado Energy Plan includes more than 1,000 megawatts of new wind and solar generation and 275 megawatts of battery storage. The Minneapolis-based company, Colorado’s largest electric utility, is closing two of its coal-fired units early.

And in late 2018, Xcel Energy became the first major U.S. electric utility to pledge to go carbon-free. It set a deadline of 2050. Last week, Arizona Public Service, that state’s largest utility, committed to doing the same by the same date.

Both utilities acknowledge that while renewable energy sources will be key to generating 100% carbon-free electricity, it’s not entirely clear how they will reach the final stretch. They have said technology not yet developed will likely help fill the gaps.

That and natural gas.

A more narrow bridge?

In Colorado, Xcel Energy’s fuel mix is 39% coal, 33% natural gas, 24% wind, 3% solar and 1% other renewables. The share of renewable energy sources is expected to increase to 55% by 2026. The percentages of coal and natural gas are expected to decrease.

However, “natural gas is an essential part of our fuel mix, ensuring that the grid remains reliable, while allowing us to integrate as much wind and solar energy as possible,” Xcel Energy said in a statement. It will make it possible to retire coal plants ahead of schedule, the utility said.

Tri-State recently announced that it will close a coal plant in New Mexico at the end of this year and a coal mine and the remaining coal plants it operates in Colorado by 2030. The Westminster-based wholesale power provider plans to add 1 gigawatt — 1,000 megawatts — from eight wind and solar projects.

Currently, about 3% of the electricity Tri-State generates is from natural gas. Coal makes up 47%, renewables account for 31% and contracts for power make up another 19%.

Long term, with the closure of the coal plants in Colorado, Tri-State spokesman Lee Boughey said the utility might need additional “dispatchable resources to ensure reliability,” or energy sources that can be deployed on demand. That could be natural gas or new technologies.

More of a backup

It’s clear the switch from coal to more natural gas to generate electricity has reduced emissions over the past decade or so, said Kenneth Gillingham, an associate professor of environmental and energy economics at Yale University.

Gillingham said the debate over the ongoing role of natural gas is about two things: the emission reductions achieved when switching from coal to gas; and the longer-term implications of having infrastructure catering to natural gas, an inexpensive fuel that’s “still relatively carbon intensive.”

“And fugitive methane emissions, that is a huge issue because it is a very potent greenhouse gas,” said Gillingham, who was senior economist for energy and the environment at the White House Council of Economic Advisers in 2015 and 2016.

A 2019 article by Gillingham and Pei Huang in The Energy Journal concluded that switching from coal to more natural gas would reduce local air pollution and reap health benefits. However, based on simulations using a version of Department of Energy computer modeling, the article said natural gas doesn’t significantly reduce carbon dioxide emissions over the long term compared to a scenario where coal is more plentiful. That’s because “cheaper natural gas replaces not only coal but also renewables,” the article said.

“It’s not much of a bridge fuel toward a low-carbon economy,” Gillingham said.

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