Report: Natural gas can play major role in greenhouse gas reduction

Natural gas is important in many sectors of the economy: for generating electricity, as a heat source for industry and buildings, and in chemical feedstock. Given the abundance of natural gas available through extensive global resources and the recent emergence of substantial unconventional supplies in the United States, worldwide usage of the fuel is likely to continue to grow considerably and contribute to significant reductions of greenhouse gas emissions for decades to come, according to a comprehensive, multidisciplinary study carried out over the last three years by MIT researchers.

The study — managed by the MIT Energy Initiative (MITEI) and carried out by a team of Institute faculty, staff and graduate students — examined the scale of U.S. natural gas resources and the potential of this fuel to reduce greenhouse gas emissions. Based on the work of the multidisciplinary team, with advice from a board of 18 leaders from industry, government and environmental groups, the report examines the future of natural gas through 2050 from the perspectives of technology, economics, politics, national security and the environment.

An interim report with some of the study’s major findings and recommendations was released in June 2010. The full report, including additional data and extensive new analysis, was released by MITEI this week.

Because it has the lowest carbon content of all fossil fuels, natural gas can play a critical role as a bridge to a low-carbon future. The study’s economic analysis of the effects of a national policy calling for a 50 percent reduction in greenhouse gas emissions shows that such a policy would result in widespread substitution of natural gas for coal in electricity generation. However, in order to achieve even greater reductions in carbon emissions — which may be mandated in coming decades — natural gas will in turn need to make way for other low- or zero-carbon sources of energy. It is in this sense that natural gas may be seen as a “bridge” rather than as the ultimate long-term solution itself.

The report says that it is important to continue a robust program of research and development on other energy alternatives, which can be used to take the place of natural gas later in the century if and when emissions regulations become stricter. Henry Jacoby, MIT professor of management and co-chair of the study, said that such research is crucial because “people speak of [natural] gas as a bridge to the future, but there had better be something at the other end of the bridge.”

The study found that, contrary to best estimates of a decade or so ago, natural gas supplies are abundant and should be ample even for greatly expanded use of the fuel in coming decades. This is largely the result of the development of “unconventional” sources, such as shale gas. Because of its abundance, widespread distribution and advantages in cost and emissions, use of natural gas is expected to increase substantially under virtually all scenarios involving national policies, regulations and incentives, the study notes.

“Shale gas is transformative for the economy of the United States, and potentially on a global scale” because it has so dramatically increased the amount of gas that can be economically produced domestically, Anthony Meggs, a visiting engineer at the MIT Energy Initiative and co-chair of the study, said at Thursday’s press conference introducing the report.

Concerns have been raised about the possible environmental effects of developing shale gas using a controversial process called “fracking” (for hydro-fracturing), which involves injecting fluids into deep horizontal wells under pressure. The ultimate disposal of those fluids after they are pumped back out, and the possibility that they could contaminate water supplies, have been the subject of lawsuits and legislative attempts to limit the practice. The study found that “the environmental impacts of shale development are challenging but manageable,” and that some cases of the gas entering freshwater tables were “most likely the result of substandard well-completion practices by a few operators.”

Meggs said that in the small number of cases where there has been contamination, the problem has stemmed from improper cementing of the well casings. “The quality of that cementing is the area where the industry, frankly, has to do a better job,” he noted. But even so, he said, the study found only 42 documented incidents of such problems, out of tens of thousands of wells drilled. “It is not trivial,” he said, “but neither is it all-encompassing.” And, he added, even where there are problems, it is possible to go back and fix the well casings later.

The study recommends that to address these concerns, “it is essential that both large and small companies follow industry best practices; that water supply and disposal are coordinated on a regional basis and that improved methods are developed for recycling of returned fracture liquids.” Government funding for research on such systems should be “greatly increased in scope and scale,” the report says.

The robust supply situation enhances the opportunities for natural gas to substitute for other fuels. Using very efficient natural gas powerplants to replace coal-fired plants is “the most cost-effective way of reducing CO₂ emissions in the power sector” over the next 25 to 30 years, the report says. Natural gas will also play a central role in integrating more intermittent renewable sources — wind and solar — into the electricity system because they can easily be brought in and out of service as needed.

The study also finds important opportunities for cost and emissions reduction in industry by switching to very high-efficiency natural gas boilers, and for more efficient energy use in commercial and residential buildings through new standards that would provide consumers information on end-to-end energy use of space- and water-heating alternatives. Furthermore, the current large price difference between oil and natural gas, if sustained, could lead to increased use of gas as a transportation fuel, either directly or through conversion to liquid fuel.

The study group suggests that U.S. national security interests will be served by policies that encourage integration of the presently fragmented global natural gas markets, and calls for better integration of such issues into foreign policy.

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.

In addressing public concerns about the environmental impact of natural gas drilling operations, the industry could be taking a much more active role, said Ernest Moniz, director of MITEI and chairman of the study. The study makes many specific recommendations for improving well-development procedures, including full disclosure of chemicals used in the hydro-fracturing process and regional coordination on water-use issues. “An endorsement [of these policy recommendations] by industry would be very welcome,” Moniz said. “If industry actively promotes them, that can certainly help overcome” these public and legislative concerns.

Ironically, the study found that “public and public-private funding for natural gas research is down substantially,” even as the fuel is being recognized as a major contributor to strategies for lowering greenhouse gas emissions, said Melanie Kenderdine, executive director of the MIT Energy Initiative. The study recommends a substantial increase in such research.