Natural gas: a viable low-carbon solution?

According to the gas industry, natural gas is the perfect bridge fuel to civilisation's sustainable future - solving peak oil and helping the battle against climate change. David Strahan weighs up the evidence

I once hitched a lift from New York to London in the private jet of a gas billionaire. Robert Hefner III, an Oklahoma wildcatter who pioneered the drilling of deep gas wells during the 1960s, was planning to write a book about energy and wanted to discuss it. The GET – grand energy transition would argue that natural gas can solve peak oil and climate change almost single-handed. Abundant and clean, it offered a perfect bridging fuel to a future of limitless low-carbon energy based on hydrogen.

With gas prices at that time approaching record highs, I was skeptical, to say the least. But now, several years later, the US is awash with newly producible shale gas, and enthusiasts claim this ‘revolution’ can be repeated around the world. So could it be that Mr Hefner was right all along?

There is certainly far more gas available than most thought possible just a few years ago. The development of hydraulic fracturing (‘fracking’) has raised US gas production dramatically, and helped double the estimated global gas resource to around 800 trillion cubic meters (tcm), or 250 years’ consumption at current rates.

In Britain, a tiny explorer, Cuadrilla Energy, has drilled three wells in Lancashire and claims to have discovered 5.7 tcm of shale gas, equivalent to 60 years’ UK demand, of which 10% might be producible. Dr Peter Turner, Cuadrilla’s director of exploration, tells me: “I think both numbers are conservative”.

And investing in gas has certainly helped cut greenhouse gas emissions in the past. In Britain, the ‘dash for gas’ of the 1990s – when rising North Sea gas production and regulatory changes led to a massive increase in gas fired generating capacity – meant power emissions fell by 45 million tonnes or 22% over the decade. It’s no surprise then that commentators including energy academic Dieter Helm and climate sceptic Nigel Lawson have seized upon shale gas as an alternative to wind turbines, which they condemn as expensive and unreliable. Professor Helm urges the Government to ditch its offshore wind targets in favour of gas fired power stations, which he claims will be cheaper over the coming decades. The industry has lobbied the European Commission along similar lines.

The benefits of gas need not be restricted to electricity generation, say its supporters. The “Pickens Plan”, devised by another Oklahoma gas tycoon, T. Boone Pickens, and backed by Aubrey McClendon, chief executive of Chesapeake Energy, America’s biggest independent gas producer, is a scheme to replace petrol and diesel in transport.

“America is addicted to foreign oil”, declares Mr Pickens’ website, and replacing oil imports with domestically produced gas would be good for energy security and the economy. With compressed natural gas (CNG) selling for half the price of diesel, “we’re fools not to do it”, Pickens told Bloomberg TV. The pair have committed $1B to build refuelling stations and are lobbying Congress to pass a bill to subsidize natural gas vehicles.

So if gas is newly abundant, low carbon and offers an alternative to scarce oil as a transport fuel, perhaps it really can save the planet?

On the face of it, the argument for using CNG in transport is strong. In his book, Mr Hefner claims that swapping oil for CNG cuts emissions by 20% to 30%, and converting the world’s vehicles would represent “a very large step forward in reducing global CO2 emissions”. He goes on to assert that gas powered vehicles like the Honda Civic “will always be much greener” than plug-in hybrid electric vehicles such as the Chevy Volt, as long as coal continues to be used in electricity generation. But this is based on a widespread misconception, and not supported by the numbers.

Figures published by the US Environmental Protection Agency (EPA) show the Honda Civic travels up to 36 miles on a gallon of petrol, and the gas version does the same distance on a ‘gallon equivalent’ of CNG – both contain just under 34 kilowatt hours of energy. According to figures provided by the US Argonne National Laboratory, the ‘well-to-wheels’ or lifecycle greenhouse gas emissions from a gallon of petrol are 334 grams of carbon dioxide equivalent per kilowatt hour, while those from a gallon equivalent of CNG are 297gCO2e/kWh. So the Civic’s emissions should be 11% lower with CNG, and work out at 278gCO2e per mile.

By contrast, America’s electricity has more than twice the carbon intensity of petrol because around half is generated from coal. On average US electricity at the socket emits 755g/kWh, so like Mr Hefner you might assume the Volt’s emissions would be commensurately high. However, electric motors are massively more efficient than internal combustion engines, which suffer big energy losses through friction and heat, and this transforms the picture. In all-electric mode, the Chevy Volt achieves the equivalent of 93 miles per gallon, and that means its emissions per mile are just 273gCO2e – fractionally better than the CNG Civic – despite being heavily dependent on coal.

True, the Volt’s battery-only range is just 35 miles before the petrol engine kicks in, and that would raise emissions for longer journeys. But the new Nissan Leaf battery electric claims a range of over 100 miles, and, according to the EPA, will travel that distance on the equivalent of a single gallon (99 mpge). If charged on the EU average generating mix, which produces almost 40% less carbon than the US, the Leaf would emit just 160 grams per mile, or 99 grams per kilometre. That’s 40% lower than a typical petrol car in Europe, according to figures from the Joint Research Centre of the European Commission.

What this means is that not only are EV emissions already lower than those from CNG in a variety of scenarios, despite the persistence of coal in the electricity supply, but also they will continue to fall as power generation is decarbonized. By contrast, CNG is an emissions-reduction dead-end: even if CNG could cut emissions by 30% as claimed, the remaining 70% would continue to spew from the exhaust pipe. “By far the best way to eliminate tailpipe emissions is to eliminate tailpipes”, says Gary Kendall, a former Exxon chemist, and author of a report for WWF entitled Plugged In: The End of the Oil Age. “And that means switching to electric cars, which get cleaner along with the electricity mix, and are the only vehicles capable of eliminating their emissions altogether”.

It is also clear that in the short term it makes more sense to burn natural gas in a power station and run EVs on the electricity it produces than to compress the gas and burn it in a car engine. That might suggest natural gas can still save the world – or at least start to – simply by displacing coal in power generation, which would cut both power and transport emissions. But here again the picture is not as simple as the gas industry and its supporters would have us believe.

One reason is that, although natural gas cannot become cleaner, it can get dirtier. Much dirtier, according to Robert Howarth of Cornell University, who has developed a controversial analysis of the lifecycle greenhouse gas emissions of shale gas.

While most critiques of shale gas production have concentrated on the potential to contaminate water supplies, professor Howarth looked at the impact of ‘fugitive emissions’ of methane caused by hydraulic fracturing, the process of splitting the rock using high pressure water and chemicals. These emissions happen in the first few weeks after fracking, as the fluid returns up the well to the surface, before the well is sealed and a pipeline installed. The fluid brings with it methane that escapes to the atmosphere, which Howarth estimates can amount to 1.9% of well’s total output, and subsequent leaks at the well-site or downstream can raise total fugitive emissions to almost 8% of lifetime production.

As a result, Howarth suggests not only does shale gas emit more lifecycle carbon than conventional gas, but that both can be more carbon intensive than coal per unit of energy. At worst, he calculates, shale gas could have twice the emissions of surface mined coal. Even after allowing for the greater efficiency of gas fired power stations over coal fired plant, electricity produced from shale gas could still be over 40% more carbon intensive than that from coal. The findings “certainly call into question the idea of using shale gas as a bridging fuel”, says Howarth.

Howarth’s work has been vehemently attacked by the gas industry for its data and assumptions. Howarth himself has accepted the data is “lousy”, based as much of it is on scarce and approximate industry sources. However, he vigorously defends his assumptions – particularly his treatment of the impact of natural gas on the climate over the short term.

Methane is commonly accepted to be 25 times more powerful than carbon dioxide in its global warming potential (GWP) over 100 years, and 72 times more potent over 20 years – because CO persists in the atmosphere for about a century while methane lasts only a tenth of that time. But Howarth used higher values of 33 and 105 respectively, based on recent research showing methane has an even greater impact than previously thought, because of the way it interacts with aerosols. And whereas most climate scientists tend to use the 100-year timeframe, Howarth stresses the 20-year period, and that makes gas look worse.

But Howarth insists his approach is fair because the short-term impact of methane is helping propel the climate towards an early tipping point. Cutting methane emissions now would have an earlier impact on global temperatures than cuts in carbon dioxide, he argues, and that would give more time for cuts in CO2 to take effect. “Without controlling methane we’re in a lot of trouble”, he says.
Other studies that use the standard GWP come up with far lower estimates of the impact of shale gas, but agree the new resource is raising lifecycle emissions.

Last year, the Environmental Protection Agency upped its estimate of fugitive emissions, and a report from Deutsche Bank shows this revision increases the average emissions per megawatt hour of US gas fired power stations by 11%. That’s still 47% lower than average emissions from US coal fired stations, but the advantage will shrink as shale production increases. The US Department of Energy predicts shale production will quadruple by 2035, hoisting its share of the total US gas supply to almost half.

Shale gas fugitive emissions could be much reduced by installing equipment to capture the fugitive emissions at the well-site, and the EPA has proposed a regulation that could encourage this. But in once sense the higher carbon intensity of shale gas is irrelevant: even if all natural gas remained as ‘clean’ as conventional gas is generally believed to be, it still could not deliver the emissions cuts demanded by climate science.

One problem is that global energy demand growth is so strong that any notion of gas ‘displacing’ coal now looks fanciful. In the US and China, the world’s biggest polluters, coal and gas consumption are both forecast to rise over the next 25 years. So at best rising gas consumption will moderate the rate of growth in coal emissions, but will not reduce them in absolute terms. Professor Kevin Anderson, of the Tyndall Centre, Manchester, which has published a damning report about the potential climate impact of UK shale gas, argues economic growth trumps the argument that gas would displace coal. “In a world that is clamouring for energy”, he says, “exploiting a new resource like shale means emissions will rise, not fall”.

Even if gas were to displace all coal, however, it still could not deliver Britain’s legally binding commitment to cut emissions by 80% by 2050. To achieve that, the Committee on Climate Change has calculated that average emissions from electricity need to fall from around 500g/kWh today to just 50g/kWh by 2030, because electricity emissions should be the easiest to cut, and because low carbon power is needed to help decarbonise transport and heating. But the most efficient gas plants emit around 440g/kWh, so a second ‘dash for gas’ might reduce emissions fractionally in the short term, but would make later targets harder and much more expensive to hit.

“We’ve played that trick once, and we can’t play it again”, says Dustin Benton of the Green Alliance think tank, and author of a recent report entitled ‘Avoiding Gas Lock-in: why a second dash for gas is not in Britain’s interest’. The report warns that so much gas fired plant is either under construction or being planned that power stations worth ₤£10B will have to be retired early if emissions targets are to be achieved in the 2020s. Mr Benton says in future, gas plant will have to operate as ‘peaking’ plant, generating only a few hours per year, or be fitted with carbon capture and storage (CCS).

The need to install CCS on gas fired plant is reinforced by a scenario developed by the International Energy Agency (IEA) called the Golden Age of Gas. The scenario describes gas taking market share from oil and coal over the next 25 years, but still leads to global warming of 3.5C – far higher than the generally agreed threshold for runaway climate change.

If gas needs CCS as much as coal, there is no guarantee if or when it will become technically and commercially viable. The Government’s CCS competition ran for almost five years before collapsing last October in a dispute over costs with the one remaining contestant. But if the technology does deliver, it could make gas less competitive. Another study from the IEA shows that coal and gas fired plants fitted with CCS could both produce power at about the same price, but the cost of abating a tonne of carbon would be far lower in the coal fired plant. Paradoxically, that’s because coal plants produce much more carbon, making each tonne cheaper to capture. So if CCS becomes compulsory for both coal and gas plant, and policy is driven by a carbon price, gas could be at a disadvantage.

None of which will deter the gas industry from continuing to insist that “natural gas is truly the bridge fuel to civilization’s sustainable future”, in the words of Robert Hefner. But perhaps that’s no surprise. After we touched down at Farnborough in his private jet, Mr Hefner was quickly on the mobile to a drilling rig in the US that was just about to penetrate a new gas reservoir, of which his company owned a quarter share. The value of the gas it was expected to contain at then prevailing prices: $8B.

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