Shale Gas and GHG Emissions: What’s the Deal?
Few foresaw the rapid emergence of shale gas development as the growing force in the US energy mix that it is today. In four years, shale gas development has boomed in a diverse set of geographic locations. According to the US Energy Information Agency, the US has 2.214 trillion cubic feet of technically recoverable natural gas — enough to meet a considerable amount of US energy demand for years. Closely associated to the boom, state and federal government entities are actively engaged with public and private stakeholders to set sustainability and other regulatory standards for production of shale (and other unconventional) plays.
The scale and cumulative impact of this development in the US is coming into focus and there are an undeniable set of environmental and social risks to be addressed. From an energy security perspective, if the right rules are put in place and a social license to operate is achieved, the shale gas industry is indeed crucial. From a climate change perspective, however, shale gas is most valuable if it significantly contributes to reducing GHG emissions at a scale that meets science-based goals. Below I briefly allude to a few key issues to address if shale gas can effectively lay claim to a “game changer” title in a low carbon economy:
1) Fully Assess Upstream GHG Emissions
There is consensus that it is necessary to assess the full lifecycle of the sector’s technologies and systems, not just GHG emissions of end-users of the fuel to understand the total footprint. There are a variety of emerging opinions and analysis on the precise nature and impact of upstream GHG emissions. It is difficult to know all the right answers on upstream production-related emissions at this point as most studies to date have serious methodological and data challenges and conjectures on emissions as opposed to real, independently verified emissions data. Some preliminary analyses have projected upstream emissions to be quite significant, while other reports suggest lower and less significant emissions. Considerable serious, non-politicized research remains to be done on this topic before a definitive way forward can be developed. EPA has recently promulgated rules that mandate green completions that will likely serve to reduce a significant portion of some identified upstream GHG emissions. A key missing piece is the development of objective, multi-stakeholder reviews of the full upstream GHG emissions footprint of shale production based on real-world operational data. Morgan Bazilian, from the Joint Institute for Strategic Energy Analysis, notes such studies are underway.
2) Set Clear Demand Signals in Power and Other Sectors
A mixture of market and regulatory signals are driving an emerging transition towards gas in the power sector. Several US power generators are taking advantage of low natural gas prices and displacing large chunks of their coal fleet with gas. EPA regulatory actions are also playing a role in driving the US power portfolio towards gas. Media reports note that Southern Company anticipates running more power through gas than coal in 2012, for the first time in company history. EIA notes that in February of 2012 power generators consumed approximately 35 percent more natural gas than the previous year, displacing coal as a result. US 2012 GHG emissions are at their lowest point since 1992, which EIA claims is in part due to increased reliance on natural gas in the power sector. With a lower GHG footprint, this transition from coal to gas is a net positive from a climate mitigation perspective. Yet the abundance of shale gas is creating a glut in the market and low prices of natural gas reflect this reality. A new wave of demand signals will need to emerge if fuel switching trends can continue at scale. The manufacturing and chemical sectors (and potentially transportation) are also significant consumers of natural gas and the GHG emissions of those sectors are part of the equation.
3) Embrace Synergy Between Renewable Energy & Natural Gas
The large scale of shale gas and increasing role it is projected to play in the overall US power portfolio has some concerned it will delay ambitions for scaled-up solar, wind and other low carbon sources of energy. There are at least 3 good reasons, however, that gas and renewables should actually partner to design and advocate energy policy:
–Scaled-up renewable energy deployment can serve to hedge risk of gas price spikes.
–Natural gas is an obvious companion to balance out the grid with more variable sources of electricity production like wind and solar. General Electric, for example, has introduced “FlexEfficiency” systems that enable grid operators to rapidly adapt as renewable energy comes on and off the grid.
–A diversified power portfolio in the US can only serve to enhance aspects of energy security.
From Pennsylvania to Texas shale development marches forward as does work to ensure it can be developed in a safe and responsible manner. Much more analysis, policy innovation and advocacy needs to acknowledge this reality and ensure shale gas plays a robust role in leading the US down the path to a low carbon economy.
Jon D. Sohn is an experienced climate change and clean energy public policy leader. He has first hand experience preparing U.S. domestic and international environmental policy and regulations backed by advocacy and testimony before the United States Congress and Executive Branch. He has in depth understanding of private sector finance, multilateral development banks and United Nations processes in climate and energy policy matters coupled with a unique ability to work collaboratively with private sector, government and non-governmental organization stakeholders to formulate public policy solutions. He also represents clients before the Environmental Protection Agency and the Department of Energy on a broad range of regulatory and policy matters.
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