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December 27, 2016

Natural Gas vs. Climate Change

The Kyoto Protocol was adopted by most of the nations in the world in 1997. Although Al Gore signed it, the US Senate never ratified it so it doesn’t bind us. However, the US is the only industrial nation to achieve the quotas established for it in the treaty. Between 1997 and 2012, the US reduced CO2 emissions by 5.2% according to the Energy Information Agency (EIA). The EIA says that CO2 emissions between 2005 and 2012 fell by 12%.

Why? Was this because of regulation in the spirit of the unratifed Kyoto, massive conservation, a buildout of wind and solar? Here’s what the EIA says:

“Energy-related CO2 emissions can be reduced by consuming less petroleum, coal, and natural gas, or by switching from more carbon-intensive fuels to less carbon-intensive fuels. Many of the changes in energy-related CO2 emissions in recent history have occurred in the electric power sector because of the decreased use of coal and the increased use of natural gas [emphasis mine] for electricity generation….

“Adjusted for inflation, the economy in 2015 was 15% larger than it was in 2005, but the U.S. energy intensities and carbon intensities have both declined. On a per-dollar of gross domestic product (GDP) basis, in 2015, the United States used 15% less energy per unit of GDP and produced 23% fewer energy-related CO2 emissions per unit of GDP, compared with the energy and emissions per dollar of GDP in 2005.”

In simple English, there was a huge switch from coal to natural gas because natural gas is now cheaper than coal. Burning natural gas gives off 50% less CO2 per BTU of energy generated than coal. There has also been a switch, although less dramatic from oil-based products to natural gas. CO2 reduced by 26% per BTU when switching from oil-based products to natural gas.

And why the substantial switch from coal and oil to natural gas? Almost all of it was without subsidy or mandate of any kind. It happened for the simplest of reasons: once the disruptive technologies of horizontal drilling and hydraulic fracturing (fracking) came into widespread use, the US suddenly had vast supplies of natural gas which could cheaply and safely be recovered. Down came prices. Up went usage. The capital needed to finance the change from burning coal or oil was readily available because of the money which would quickly be saved. This switch has been “sustainable” because it depends on economics rather than incentives which politicians can change every year. The rate of conversion fluctuates with the prices of coal, oil (which has also gotten cheaper) and natural gas; but the conversion continues and US emissions continue down while GDP is up.

Departing from environmental considerations for a minute, natural gas used in North America is sourced in North America; supply disruptions are unlikely; we don’t enrich our enemies by using it; in fact, the money stays in our economy. But I digress.

Still almost 33% of US electricity is generated from coal. Oil still powers many factories. Many homes are heated by oil and propane rather than clean natural gas. There is huge potential to lower emissions further by displacing this coal and oil with natural gas. The obstacles are that 1) pipeline don’t reach everywhere and 2) with the increase in natural gas usage, some pipelines are put of capacity seasonally – for example, those that serve New England.

So obviously if we fear climate change (or simply want lower energy costs) we ought to:

  1. Build new pipelines to reach more users;
  2. Encourage drilling for natural gas on public lands to keep the price low and displacement happening;
  3. Assure that regulation of the new technologies which created the abundance of natural gas is both effective and reasonable – and is not used to protect other industries which are challenged by the low cost of natural gas like coal, railroads which haul coal, nuclear, oil, and renewables.

We don’t have to wait for certainty on how significant the anthropogenic effect on climate change is to take these steps since they result in lower energy costs, don’t need public subsidy, and reduce a whole array of pollutants.

Unfortunately, it is now nearly impossible to build a new pipeline, especially in the Northeast because of “environmental” opposition. Frankly this is absurd, especially if you are concerned about atmospheric levels of CO2; The opposition makes perfect sense if you are in a competing industry, however.

There is an artificial hysteria about fracking meant, I think, to slow the growth of natural gas use. Those who believe there is a conspiracy against rational energy policy ought to follow the money (hint: purveyors of “renewable energy” are no purer in their motives nor more objective than those of us who sell other products). I wrote Good and Bad News about the Safety of Natural Gas Fracking a long time ago and will update it soon.

It is a legitimate concern that methane, the main ingredient of natural gas, is itself a much more potent greenhouse gas than CO2; If more use of natural gas meant massive releases into the atmosphere. Its use would be counterproductive from a climate change avoidance point of view. I promise to write more about “fugitive emissions”; but for now we can take solace both in the facts that the gas industry has decreased gas loss while vastly increasing gas production and that Chapter 6 of the IPCC report on climate change finds atmospheric methane content nearly stable with annual variations it attributes to the effect of temperature changes on natural sources like swamps.

In the interest of both the economy and the environment (the two are not enemies) we ought to be increasing the substitution of natural gas for its far dirtier fossil fuel cousins.

Please note that I am not disinterested when it comes to natural gas. I founded a company which trucks natural gas to large users beyond the reach of pipelines and still have a financial interest in its success. I’m proud that it has both saved businesses by reducing their energy costs and vastly reduced emissions. Still, you have to watch my objectivity on this. The business is helped by low natural gas prices, hurt by low oil prices, would be helped by a tax on carbon dioxide (which I’m not advocating), and is not needed where pipelines do get built.

Other posts in the climate change series:

“Dissent is not a crime” – Except to the New York Times

Believers and Deniers

Combating Climate Change (the nuclear option)

Past Climate Change - The Pictures

Solar and Wind Need Natural Gas

Natural Gas and Fugitive Emissions

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