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Summary:

Despite all of the innovations and investments in solar, wind, and the smart grid, the reality of cutting carbon emissions out of the U.S. energy portfolio will rely on natural gas, which will make up 40 percent of the U.S. energy market according to a report today.

Despite all of the innovations and investments in solar, wind, energy efficiency, and the smart grid, the reality of cutting carbon emissions out of the U.S. energy portfolio will rely on natural gas. A report released out of MIT today and reported by the New York Times estimates that natural gas will one day grow from 20 percent of the energy market in the U.S. to 40 percent.

That growth in natural gas will be at the expense of coal, and is largely due to recent discoveries that the U.S. has a whole lot more reserves of natural gas in shale deposits. A geophysics professor at Stanford University (and a personal friend of mine) Mark Zoback, told me recently that through better technology and recovery tools, we’ve discovered that the U.S. now has an estimated resource of over 2,000 trillion cubic feet of natural gas. That’s — in a word — massive.

Zoback told me he thinks that the newly discovered natural gas resource will help to stabilize the price for natural gas, making it more attractive for both the gas producers and utilities (fluctuating prices has deterred more use of natural gas for power production). And Zoback pegs that price around $6 per million BTUs. That could help natural gas beat coal on price, meaning natural gas could actually be an economic replacement for coal power.

Natural gas has significantly fewer carbon (and toxic) emissions than coal. Zoback estimated that by replacing 30 percent of coal-fired generation with gas (without CCS) it would get the U.S. almost to the point of what the current climate bills call for: a 17-20 percent reduction of carbon emissions by 2020. With carbon capture technologies, gas power could cut carbon emissions even more.

The abundant natural gas reserves could also be used for vehicles — something T. Boone Pickens has been advocating for months. While I’m not convinced the natural gas vehicle market will ever take off outside of enterprise fleets, trucks and buses, natural gas vehicles could play a significant role in cutting carbon emissions. Here’s how the economics of natural gas vehicles works.

While natural gas is less fun to talk about than buzzy startups like Bloom Energy or EEStor — and yes it still emits CO2 — it’s one of the dominant ways that the U.S. will realistically move away from coal and toward a clean power future. Consider it a “bridge technology,” too a carbon-free future.

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By Katie Fehrenbacher

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  1. Tyler Hamilton Friday, June 25, 2010

    The only concern I have with natural gas is that we don’t adequately account for fugitive methane emissions related to the extraction and pipeline infrastructure. This will become an even greater concern with shale gas extraction. Since methane is 21 times more potent than CO2, will we really be any better off moving to natural gas (aside from the benefits of no sulphur dioxide emissions?). That said, it does make sense as a transitionary fuel.

  2. C Magnus Berglund Friday, June 25, 2010

    Natural gas in vehicles will without doubt pave the way for biogas in vehicles.

  3. Bloom Energy and EEStor should not be used in the same sentence. Bloom Energy is a legitimate company and has a functional product, “Bloom Box”. EEStor has no product, just BS and hype for the last nine years which a lot of bloggers have been buying.

  4. Katie Fehrenbacher Friday, June 25, 2010

    @Tyler, interesting, thanks for the comment. @CarlNelson, My using Bloom Energy and EEStor in the same sentence was only to mention too companies that get a lot of press and media attention, not meant to compare their technologies or business strategies.

  5. Just some background from Natural Gas Policy 101. There has always been a big chasm between the Natural Gas industry and Electric Utilities. During the 80s, Electric Utilities sat on the sidelines while Big Coal and Big Gas battled to repeal the “off-gas” provisions of the “Fuel Use Act” which prevented gas from being used to directly generate electricity (exception for “qualified facilities” which were essentially cogen plants). When the provisions were finally repealed in ’86, electric utilities began to order new, combined cycle powerplants which substantially reduced the overall heat rate in the generation of electricity and gave them a technology which more easily fit into baseload and intermediate load applications.

    During the 90s gas prices were relatively stable. There was a sufficient inventory of natural gas resources to keep a lid on the market. The expectation when the “off-gas” provisions were repealed was that gas use by industrial users (mainly fertilizer manufacturers) would decrease and be replaced by demand by electric utilities. By the end of the 90s the inventory of know gas resources had faded and prices began to rise. (As an aside, the shift from coal to gas in midwest powerplants is part of the reason that “cap-and-trade” worked for NOx/SOx reductions)

    The executive summary of the MIT report sounds very optimistic. In the three National Petroleum Council’s studies on natural gas (1992,1999, and 2003) the most critical issue for the industry has been identified as the Transportation and Distribution system.

    When the gas industry tries to exceed 20-22 Tcf (Quadrillion btus – close enough), it begins to push the limits of the ability to produce and distribute gas. During the winter months most pipeline, distribution systems, and storage are filled. Using gas for summer peaking of electric utilities is great, but many places in the country already see summertime excess pipeline capacity diminishing as the industry fills storage fields handle winter peak demand for gas. The Executive Summary of the MIT study only has two references to pipeline issues. One which highlights the need to invest in “gathering systems” for the exploitation of shale gas, and the other in a less than veiled slap at Gazprom and Ukraine over “control” of pipelines.

    Zoback is absolutely right. Innovation in exploration and production of gas has been great. Some of the infrastructure issue pose some big hurdles. Lots of big opportunities for natural gas, but like everything else in the cleantech space lots of hurdles to overcome. For cleantech entrepreneurs lots of things to think about doing — if you can get someone to fund them.

  6. Katie is an EEStor believer. She wouldn’t mention them so much if her leanings weren’t towards believing.

    Keep mentioning them Katie, your inclination is correct.

    1. Katie could speak for herself if she is a believer in EESCAM. She doesn’t need you to state what her leaning is just like Dick Weir does not need Ian Clifford to state when EESCAM’s schedule to reveal the EESU is. Reminder if you pumpers forgot Ian Clifford believed EESCAM’s reveal was “imminent” in 2006. What a bunch of con artists!

  7. Frank Latini Friday, June 25, 2010

    I just saw a documentary called “Gasland” that presents a very disturbing picture of how natural gas is “mined” from the shale through hydraulic fracturization (sp?). It appears (yes, no one can prove it yet) that this “fracting” destroys the local water table by polluting it with natural gas and the chemicals used to fracture the shale. Are we rushing to solve one problem while cresting another?

  8. Frank Latini Friday, June 25, 2010

    I just saw a documentary called “gasland” that describes how we recover the gas form the shale using hydraulic fracturization (sp?). While no one can prove it yet, it appears (highly coincidental) that the local water table is destroyed when the shale is fractured by allowing the natural gas and the chemicals used in the process to seep into the water. Homeowners close to the new wells can actually light their water on fire. Are we trading one problem for another?

  9. Terry Nolan Friday, June 25, 2010

    My understanding is the Bloom Energy Fuel Cell Boxes can and will often use Natural Gas as part of their systems. I believe their fuel cells enhance the use of Natural Gas in producing energy. Cheap Natural Gas and Bloom Energy boxes should help each other in becoming a viable alternative to oil.

  10. through better technology and recovery tools

    I would have him define better. I assume he means higher yield not cleaner. The horror stories surrounding the fracking should be looked at closer. Just the fact that they don’t have to follow the safe drinking water act, raises serious questions in my mind. It seems to me reducing Co2 emissions at the expense of water supply is a bad idea. Surly not clean and green method of power production the gas companies would like us to believe.

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