MIT Study: Expanded Use of Gas in Electric Power Generation Can Cut U.S. CO2 Emissions by More Than 10%

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Altering the dispatch order of electric power generation to increase the use of efficient, natural gas-fired combined-cycle electric generation could cut U.S. carbon dioxide emissions by more than 10%, while also lowering the emissions of oxides of sulfur and nitrogen, according to a recent report from the Massachusetts Institute of Technology Energy Initiative (MITEI).

"Natural gas has moved to the center of the current debate on energy, security, and climate," noted the report, titled The Future of Natural Gas, which was released June 25. "Natural gas will assume an increasing share of the U.S. energy mix over the next several decades, with large, unconventional resources playing a key role." This study analyzed the role of natural gas in a carbon-constrained world with a time-horizon that extends to 2050.

The "overbuilding" of natural gas-fired combined-cycle plants that started in the mid-1990s presents a "significant opportunity for near-term reductions in CO2 emissions from the power sector," the report said. The current fleet of natural gas combined-cycle (NGCC) units in the U.S. has an average capacity factor of 41%, relative to a design capacity factor of up to 85%. So there are significant unused capabilities for natural gas-fired generation to displace generation from older, less efficient, and higher-emitting coal-fired generators. However, with no carbon constraints, coal generation is generally dispatched prior to NGCC generation because of the lower price of natural gas, the report noted.

The MIT report commented that there was "a substantial amount of low-hanging fruit available by displacing inefficient power generation with more efficient, lower CO2-emitting gas plants. That kind of substitution alone reduces those carbon emissions by a factor of three," noted MITEI Director Ernest J. Moniz in his introduction to the report. Moniz chaired the two-year study, which was conducted by a group of 30 MIT faculty members, researchers and graduate students. The study was funded by the American Clean Skies Foundation, Hess Corporation, Agencia Nacional de Hidrocarburos of Colombia, the Energy Futures Coalition, and the MIT Energy Initiative.

Moniz acknowledged that changing electric dispatch order procedures to have gas displace coal would "raise complicated regulatory and political issues" that would need to be addressed by utility regulators and legislators. Utilities typically dispatch generating resources based on their fuel and operating costs, and older coal plants typically can generate electricity at lower costs than newer gas-fired generators.

One factor driving the MIT team to endorse the view that natural gas is "a bridge to the low-carbon future" is the large amount of unconventional gas that has been discovered in the U.S. in recent years. The U.S. has a "significant natural gas resource base," enough to last about 92 years at present domestic consumption rates, the report said. Much of this gas is from unconventional sources, including gas shales. The report noted that while there was "substantial uncertainty" about the ability to produce gas from these formations, "there is a significant amount of shale gas that can be affordably produced."

Shale formations have drawn increasing levels of investor and industry interest in recent years. Today, nearly 10% of all natural gas consumed in the U.S. comes from the Barnett Shale, located under Dallas-Fort Worth. This formation has estimated recoverable gas of 44 trillion cubic feet. Drilling a well in the Barnett Shale costs an average of $3 million, according to Jesus Davis, Industrial Info's vice president of research for Oil & Gas Markets.

The Marcellus Shale is a far larger formation. Lying mostly under Pennsylvania, New York and West Virginia, Marcellus is estimated to have 516 trillion cubic feet of recoverable gas, Davis said.

Other significant shale formations in the U.S. include Haynesville, on the Texas-Louisiana border, which has an estimated 250 trillion cubic feet of recoverable gas, and Fayetteville, in Arkansas, which is estimated to have 52 trillion cubic feet of recoverable gas.

The MIT study contained production rates for gas from various shale formations. Although initial-year production rates from the Haynesville formation are significantly higher than the Marcellus and Barnett formations, Haynesville's production costs are two to three times higher than the other shale plays, Davis pointed out. Gas in the Haynesville Shale is located farther under the surface than the other shale plays.

Over the prior decade, gas from these unconventional formations had accounted for a sizable percentage of overall U.S. gas production. The MIT report projects even larger contributions from the Marcellus and Haynesville formations over the next 20 years. The Future of Natural Gas also said that bringing this much unconventional gas to market would require "substantial additions to the existing processing, delivery, and storage facilities ... in order to handle greater amounts and the changing patterns of distribution (such as the delivery of gas from newly developed sources in the Midwest and Northeast)."

There are "manageable but challenging" environmental issues associated with producing unconventional gas, the report noted. The risks include:

• shallow freshwater aquifer contamination with fracture fluids
• surface water contamination by returned fracture fluids
• excessive demand on local water supply from fracturing operations
• surface and local community disturbance from drilling and fracturing activities.

"In a carbon-constrained world, natural gas will become a larger part of the energy mix," study director Moniz said. But he recommended that over the longer term, it will be necessary to shift to "essentially zero-carbon" sources, so "we better not get mesmerized by gas either. We need to do the hard work of getting those alternative technologies ready to take over."

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