Abundant natural gas is a game changer

I recently responded to a question on the National Journal blog, “What role should natural gas play in the United States?”

You can read more on the original blog post and other responses at the National Journal.

Here is my response:

The new abundant supply of natural gas is a game changer for our economy, energy security, and environment. But steps are needed to ensure that natural gas lives up to its promise responsibly and that it becomes part of a well-rounded portfolio of energy sources.

The evidence of fuel switching in favor of low-priced natural gas abounds. We are already seeing natural gas displacing coal at power plants, and most planned new generating capacity will use gas. Natural gas is also increasingly being used to directly heat our homes and businesses, instead of electricity. It is even a substitute for some of the oil used in our cars.

It’s improving our economy now by providing jobs not only in natural gas production but also by offering lower-priced energy to manufacturers of all types. In particular, the chemical industry is more competitive in the global marketplace thanks to cheaper natural gas and associated gas liquids — ethane, butane and propane — that form the foundation of that industry. An estimated $30 billion in new investment in the manufacturing sector is directly attributable to recent low natural gas prices.

This game change also has the potential to improve our long-term energy security by replacing some of the oil used in the transportation sector with domestic natural gas. Investments in engines, equipment and infrastructure for a nascent natural gas trucking network are well underway, and there is potential in the passenger fleet, too.

When natural gas is burned in place of other fossil fuels, such as coal and oil, it emits less carbon dioxide, and that’s good for the environment. Natural gas also doesn’t produce the sulfur dioxide, nitrogen oxides, ash, or mercury that coal does.

However, methane (the primary component of natural gas) is itself a potent greenhouse gas when released directly into the atmosphere – 23 times more powerful than carbon dioxide. Thus to fully realize the benefits of expanded natural gas use for our environment and our battle against climate change, producers must continue to focus their attention on minimizing natural gas leaks from the point where it is extracted from the ground to where it is used.

In addition to wasteful leaks, methane is sometimes intentionally vented or burned off in a process called “flaring.” The Environment Protection Agency released new performance standards in August that would require that new wells utilize “green completion” technology to allow excess natural gas from the well completion process to be taken to market, rather than vented or flared. More steps like this need to be taken to reduce leakage, venting, and flaring and put that natural gas to good use.

Additionally, industry has an obligation to address the public’s reasonable concerns regarding the drilling technique responsible for the natural gas production boom — hydraulic fracturing or “fracking.” These concerns include the implications for water resources, land use and disruptions to local communities. Full transparency, including full disclosure of the fluids used in the fracking process, will help to build public trust.

There is also a danger that the current low price of natural gas will undermine investment in other forms of energy, including nuclear, solar and wind power. It could also discourage the development of carbon capture and storage, which is needed if we are ever to see clean coal and near-zero emission fossil fuel power generation as viable.

To guard against this, we must level the playing field by taking such steps as putting a price on carbon or setting clean energy standards and providing limited, targeted subsidies where appropriate, such as extending the wind production tax credit.

As natural gas becomes a growing segment of the U.S. energy equation, we need a more comprehensive discussion with stakeholders in the private and public sectors, the environmental community, and consumers about ways to expand use of natural gas while keeping methane leakage in check and continuing to support a diverse portfolio of energy sources