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Jim: jdipeso@rep.org
(253) 740-2066 / 2010
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Gas Future Burning Brightly
June 30, 2010
The
Massachusetts Institute of Technology has published a report
projecting, with caveats, a bright future for gas as a path out of the
climate change/energy security brier patch in which dependence on the
other fossil fuels has ensnarled the U.S.
For coal, the most carbon-heavy of the fossil fuels, electric power
generation is the meal ticket. More than 90 percent of coal consumed in
the
U.S. is burned in power plants.
Coal’s position as the leading fuel for generating power that is
fundamentally important for a modern economy is a climate stewardship
problem of the first magnitude.
For oil, the dominant use is transportation. Five out of six
gallons of finished products refined from petroleum end up in the fuel
tanks of automobiles, trucks, trains, aircraft, and vessels.
Oil’s position as the leading fuel for transportation systems that make
the world go ‘round is an energy security problem of the first
magnitude.
So, where could gas come in to fix the problems that coal and oil cause?
An advantage for gas is that it burns cleaner than coal and oil - lower
carbon, very few noxious toxins - it's plentiful, and most of the gas
supplied to the U.S. market is produced at home or in the friendly
fields of Canada. MIT estimated that the U.S.' mean resource base is
about 92 times annual consumption. The resource base has grown in
recent years as technology improvements have made production of gas
from shale formations economically attractive.
Putting a price on carbon, which the federal government might
accomplish in spite of itself, would boost demand for low-carbon gas to
replace high-carbon coal for power generation. Gas’ share of total
energy use could double, to 40 percent by 2040, MIT estimates.
There’s another wrinkle. One of the lesser-known facts in the energy
world is that gas-fired power plants in the U.S. are underutilized.
Plants built during the 1990s "gas bubble" are designed to be used 85
percent of the time, but on average, they are used only 41 percent of
the time. MIT recommends making those gas-fired plants work harder as a
near-term strategy for ramping down coal use. It would take a price on
carbon to make the economics work right.
Still, the MIT study raises cautionary notes. Shale gas production is
still relatively new. In view of the complexity of shale resources,
hard-and-fast predictions about their contribution to domestic gas
production cannot be made reliably just yet.
Then, there are the water quality issues. In the Northeast in
particular, site of the mammoth Marcellus shale resource, communities
worry that hydraulic fracturing necessary for shale gas production will
pollute both surface and ground water. MIT recommends full disclosure
of chemicals used in hydraulic fracturing fluids and tighter regulation
of disposal of produced water and fracturing fluids.
Could gas perform a double play by replacing a significant amount of
petroleum in the transportation sector? Maybe.
A barrier to greater use of gas for transport is the payback time for
the higher up-front costs of vehicles burning compressed natural gas
(CNG). Fleet vehicles – taxis, buses, and delivery trucks – have the
most favorable economics for fueling with CNG. That class of vehicles
consumes some 1.5 million barrels of oil per day, about 8 percent of
total petroleum demand.
Gas also could be used to produce liquid fuels. The liquid most easily
produced from gas is methanol. Flex-fuel vehicles that currently are
able to burn any combination of gasoline and ethanol could be
engineered to use methanol as well.
Gas also could come into play in juicing up electric cars,
as a resource to fuel power plants delivering electrons to the grid
steadily, or as backup for variable power production from wind and
solar plants.
Unlike oil, the U.S. is largely self-sufficient in gas supply. Also
unlike oil, the gas market is regional, not global. Over time, a
globalized market could emerge, which would have pluses and minuses.
Pluses include resilience from supply disruption. Minuses include
geopolitical risks similar to the strategic liabilities of foreign oil
dependence.
Gas, then, could play its long-touted role as a "bridge" to a future
dominated by low-carbon energy sources, as long as the problems and
risks are not overlooked. Like any well-designed bridge, it will need
guard rails.
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