A new study from the Massachusetts Institute of Technology (MIT) that examines the future of natural gas through 2050 from the perspectives of technology, economics, and politics concludes that natural gas will play a leading role in reducing greenhouse gas (GHG) emissions over the next few decade if older, inefficient coal plants are replaced with modern combined-cycle gas generation.
The study, which examined the scale of U.S. natural gas reserves and the potential of the fuel to reduce carbon and other GHG emissions, was conducted by an MIT study group comprised of 30 faculty members, researchers, and graduate students. Findings, summarized in an 83-page report, were presented to lawmakers and senior administration officials last week.
The report includes a set of specific proposals for legislative and regulatory policies, as well as recommendations for actions that the energy industry can pursue on its own, to maximize the fuel’s impact on mitigating greenhouse gas. The study also examined ways to control the environmental impacts that could result from a significant expansion in the production and use of natural gas—especially in electric power production.
“In the very long run, very tight carbon constraints will likely phase out natural gas power generation in favor of zero-carbon or extremely low-carbon energy sources such as renewables, nuclear power or natural gas and coal with carbon capture and storage,” said Ernest J. Moniz, director of the MIT unit that conducted the research. “For the next several decades, however, natural gas will play a crucial role in enabling very substantial reductions in carbon emissions.”
The study found that there are significant global supplies of conventional gas. How much of this gas gets produced and used, and the extent of its impact on greenhouse gas reductions, will depend critically on some key political and regulatory decisions, it said.
In the U.S., for example, there is 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,” Moniz said, “reduces those carbon emissions by a factor of three. It does however raise complicated regulatory and political issues that will have to be resolved to take advantage of this potential.”
Some other key findings follow.
- The U.S. has a significant natural gas resource base, enough to equal about 92 years’ worth at current domestic consumption rates. Much of this is from unconventional sources, including gas shales. While there is substantial uncertainty surrounding the producibility of this gas, there is a significant amount of shale gas that can be affordably produced. Globally, baseline estimates show that recoverable gas resources probably amount to 16,200 trillion cubic feet (Tcf)—enough to last more than 160 years at current global consumption rates. Further, this global resource figure, excluding the U.S. and Canada, does not include any unconventional gas resources, which are largely uncharacterized in the rest of the world. Russia, the Middle East, and the U.S. have the highest concentration of global gas reserves. In the U.S., unconventional gas resources are rapidly overtaking conventional resources as the primary source of gas production. The U.S. currently consumes around 22 Tcf per year and has a gas resource base now thought to exceed 2,000 Tcf. In order to bring about the kind of significant expansion in the use of natural gas identified in this study, substantial additions to the existing processing, delivery and storage facilities will be required 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).
- Environmental issues associated with producing unconventional gas resources are manageable but challenging. 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; and surface and local community disturbance, due to drilling and fracturing activities.
- Natural gas consumption will increase dramatically and will largely displace coal in the power generation sector by 2050 (the time horizon of the study) under a modeling scenario where, through carbon emissions pricing, industrialized nations reduce CO2 emissions by 50% by 2050, and large emerging economies (such as China, India and Brazil) reduce CO2 emissions by 50% by 2070. This assumes incremental reductions in the current price structures of the alternatives, including renewables, nuclear, and carbon capture and sequestration.
- The introduction of large amounts of intermittent power generation from, for example, wind and solar, will have specific short- and long-term effects on the mix of generation technologies. The short-term effects (meaning daily dispatch patterns of various fuels) of large amounts of wind generation, for example, will reduce gas generation significantly and could force baseload coal plants to cycle, an outcome that is highly undesirable from an operational perspective.
- In the longer term, the reliability of a system in which renewables assume a baseload role in power generation will require additional flexible natural gas peaking capacity, although this capacity may be utilized for only short periods of time. Renewables as baseload power, firmed by natural gas generation, will require new regulatory structures to ensure reliability of the system and incentivize the building of flexible gas capacity.
- The overbuilding of natural gas combined cycle plants starting in the mid-1990s presents a significant opportunity for near-term reductions in CO2 emissions from the power sector. The current fleet of natural gas combined cycle (NGCC) units has an average capacity factor of 41%, relative to a design capacity factor of up to 85%. However, with no carbon constraints, coal generation is generally dispatched to meet demand before NGCC generation because of its lower fuel price. Modeling of the ERCOT region (largely Texas) suggests that CO2 emissions could be reduced by as much as 22% with no additional capital investment and without impacting system reliability by requiring a dispatch order that favors NGCC generation over inefficient coal generation; preliminary modeling suggests that nationwide CO2 emissions would be reduced by over 10%. At the same time, this would also reduce air pollutants such as oxides of sulfur and nitrogen.
- In the transportation sector, the study found a somewhat smaller role for natural gas. The use of compressed or liquefied natural gas as a fuel for vehicles could help to displace oil and reduce greenhouse gas emissions, but to a limited extent because of the high cost of converting vehicles to use these fuels. By contrast, making methanol, a liquid fuel, out of natural gas requires much less up-front conversion cost and could have an impact on oil usage and thus improve energy security, but it would not reduce greenhouse gases.
- A global “liquid” market in natural gas in which supply sources are diverse and gas prices are transparent, set by supply and demand with price differences based on transportation costs, is desirable for U.S. consumers.
MIT has released two frequently referenced studies on the future of major energy sources titled The Future of Nuclear Power (2003 with an update in 2009) and The Future of Coal (2007). The most recent installment in the series is titled The MIT Study on The Future of Natural Gas.