Natural Gas and Decarbonization Goals: Will the United States be able to break up with its second favorite fossil fuel?
Dec 12, 2019
In the context of climate change, the war over the future of electricity generation has long been about coal. Yet, as coal continues to be phased out—due to uneconomical and ageing infrastructure—the time has come for the debate to shift toward natural gas. This less carbon-intensive fossil fuel is often touted as the “next best” thing in the United States. But even though natural gas has moved U.S. part way toward lower carbon emissions, it is now in the way of a deeply decarbonized future.
Though often skewed by subsidies, energy investments follow economics. This is why less profitable coal plants have steadily closed, despite the recent federal rollback of emissions regulations. In a recent interview with UtilityDive.com, a Duke Energy spokesperson said, “As we retire old coal, in most cases we will replace that with natural gas.” Consequently, utilities’ sustainability plans appear to show great progress on the path to carbon-free electricity.
But rather than serving as a bridge to an even lower carbon future, natural gas investments are locking us into a fossil fuel infrastructure that is costly for both consumers and the environment. Since 2017 utility decarbonization commitments have slowed and investments in natural gas-fed infrastructure with 30-to-40-year life spans have increased. The U.S. Energy Information Administration predicts that natural gas will continue to be the dominant electricity source into the foreseeable future. The 29 states that have passed renewable portfolio standards—statewide targets to generate a certain percentage of electricity with renewables—will not meet these goals if natural gas investments increase.
Some utilities are not only failing to address how to replace natural gas but are also proposing or building new natural gas infrastructure. One of these proposals was from Indiana’s Utility Vectren. The Indiana Utility Regulatory Commission rejected the 850-megawatt natural gas-fueled power plant proposed to replace retiring coal plants because Vectren failed to explore renewables as an alternative. The project’s steep cost would leave their electricity consumers at financial risk with stranded assets, and the investment was therefore labeled as “uneconomic.”
Current prices of renewables and storage are not only competitive with natural gas, they are often cheaper, and their costs are predicted to continue to fall with further technological development and market expansion. This grid parity with solar makes an even sounder case for the transition to renewables without the need for natural gas as the “bridge” to propel us there. Another reason for declining futures for the gas market is the shift to heat pumps and more efficient electric heating systems that will decrease the use of natural gas in buildings. Recognizing this, Berkeley, California, voted in July 2019, to ban natural gas heating in new buildings. As the first city to codify this requirement, Berkeley will influence other cities to favor electrification over fossil fuel infrastructure.
So, what is preventing decarbonization? Some utilities say that they are wary of shifting away from natural gas because they fear potential reliability issues with intermittent renewables and the impact on the grid. In an interview with Columbia’s Center on Global Energy Policy, Xcel Energy’s President and CEO Ben Fawk spoke of the utility’s “commitment” to be carbon-free by 2050. But he cautioned against suddenly increasing intermittent energy sources that could negatively affect the grid without a controllable source of energy like natural gas to smooth load peaks.
That argument is becoming outdated. Renewable power generation does require updated grid systems and storage to meet peak demand power loads. The development of better storage technologies, however, can more efficiently smooth out the intermittency of renewables with a shorter lag time than generating with natural gas.
Will the U.S. be able to break up with its number two? The resources, intent and economic incentives are present—what is lacking is clear federal action and leadership. The U.S. can decarbonize fully, and researchers have laid out roadmaps to achieve this. The choice will be up to utilities, cities, states and most importantly the federal government to fully commit and make binding targets that will help make natural gas obsolete.
About the author
Grace Boroughs
Former Associate Research Fellow
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