Hurdles for a Natural Gas Transition

Natural gas might emerge as a “bridge” fuel in controlling carbon dioxide emissions, but switching over from coal would cost hundreds of billions of dollars — not even counting the cost of the gas, according to a study sponsored by the American Public Power Association.

Natural gas flaring from a well in Karnes County, Tex., last month.
Bloomberg News Natural gas flaring from a well last month in Karnes County, Tex.

With the Environmental Protection Agency having just issued an updated air pollution rule for power plants and with other rules already scheduled to take effect, some utilities already seem to be replacing their oldest, dirtiest and least efficient coal-fired operations with natural gas. And others may begin phasing out slightly younger plants.

All of this is a response to new or impending rules on emissions of sulfur dioxide, nitrogen oxides and particulates and on the disposal of coal ash but ahead of any agreement on carbon dioxide limits.

“Carbon may push them over the edge, but the other regulations will get them very close,’’ said Catherine Elder, a natural gas expert at the Aspen Environmental Group, a consulting firm that prepared the report.

But coal provides roughly half the supply of electricity, and getting that much out of natural gas would be difficult, she cautioned.

Her calculation runs like this: coal-fired capacity comes to 335,000 megawatts today, and it produces an average of 72 percent of the electricity that would result from around-the-clock full-power operation. Doing that with modern, efficient natural gas plants would consume 39 billion cubic feet of gas a day, or 14.1 trillion cubic feet a year.

That is a rather large number given that today, national consumption of natural gas for all purposes is only a little over 20 trillion cubic feet a year.

These are merely projections; the precise numbers are not known. Most states now have renewable portfolio standards that will require construction of wind farms and will displace some coal and gas; the nuclear industry has plans – but at this point, mostly just plans – to expand its production with new reactors. The pace of future demand growth is unknown. (Lately, demand has been shrinking.)

And most analyses of a large-scale switch to gas from coal have focused on how this would affect the price of natural gas. It is now a little over $4 per million BTU, the standard unit of measurement, but two years ago it was over $10.

Ms. Elder, however, focused on the cost of pipelines and storage capacity, which together would come to $360 billion, she calculated, plus $40 billion for new pipelines that would gather gas from new sources, including gas drilled from shale underground. How much gas from shale formations will be available is not clear, and some environmentalists predict that severe damage to drinking water could result from such drilling.

On top of that is $335 billion for new generating equipment, although not all of that expense is new; even if the country stuck with coal, new capital expenses would be incurred. Two-thirds of the coal plants are more than 30 years old, she noted.

Not everybody would be unhappy to see vast sums spent on new generating stations and pipelines. The public power agencies are acutely price-sensitive. (The American Public Power Association represents over 2,000 utilities serving 45 million people.)

Exactly how much pipeline capacity would be needed would also depend on the state of the transmission grid; if it is rebuilt to accommodate vast amounts of wind energy, then natural gas-fired power plants might be built where the gas is found and the energy shipped over power lines instead of through pipelines to a spot near the demand.

But it is notoriously difficult to get permission to build new power lines, which are under local and state jurisdiction; adding pipelines, under federal jurisdiction, is easier.

“If this study gets Congress and policymakers more behind electric transmission, great,’’ said Mark Crisson, president and chief executive of the public power group.

By MATTHEW L. WALD/NYTimes

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