Natural Gas: Part of the Solution or Part of the Problem?

 

By Patrick Parenteau, Senior Counsel to the Environmental and Natural Resources Law Clinic, Professor of Law and David Scott, JD ‘15

Summary:
The recent fracking boom may do more harm than good for the climate if the U.S. EPA doesn’t do a better job of regulating methane releases. Even if it does, will cheap natural gas displace cleaner energy options like wind and solar?

Article:
Fracking1Late last year, the State of New York and six other states sued the U.S. EPA, demanding the agency set standards for methane, the volatile greenhouse gas that is released by a practice heralded by the fuels industry as a climate change solution: hydraulic fracturing or “fracking.” The states sued for standards on methane emissions from fracking and related operations connected with extracting and transporting natural gas located deep underground. In 2014, the EPA faces a choice: it can either defend its decision not to set standards for methane in court or agree to a settlement that would establish a timetable for developing regulations to strictly limit and monitor methane emissions. Its decision could have major consequences for the gas industry as well as the climate.

News that the planet’s atmosphere surpassed 400 ppm carbon dioxide for the first time in three million years has intensified calls from climate scientists to “decarbonize” the energy sector as fast as possible. Even marginal attempts to lower CO2 emissions, including “bridge technologies” fuels that produce less CO2 that might displace dirtier coal while cleaner sources like wind and solar energy are brought on-linehave become attractive. Natural gas, which burns cleaner than oil and coal, is regarded by experts such as Daniel Yergin as the perfect bridge fuel.

Technological innovations have greatly increased the efficiency and cost-competiveness of fracking, allowing natural gas extraction from deep shale formations previously considered not profitable. The Energy Information Administration predicts that 46% of the United States’ natural gas supply will come from shale gas by 2035.

However, an overreliance on gas creates very real risks to the goal of avoiding the worst consequences of climate change this century. First, methane leaks, the issue in the multi-state litigation, pose a major threat because methane has a global warming potential 32 times greater than carbon dioxide over a 100-year period and 86 times over a 20-year period. Small differences in leakage rates make a huge difference in the climate impacts of gas. Unfortunately, as demonstrated in a recently published study in the Proceedings of the National Academy of Science (PNAS), we do not have a good handle on actual leakage rates for methane. According to the PNAS study, actual emissions may be twice as high as the EPA estimates. Various studies using different methodologies have calculated rates, with results ranging from 1.5% to 9%. At an 8% leakage rate, natural gas’s contribution to climate change is actually worse than coal’s. There is not only a need for better data, but also a need for better regulation. The EPA has the authority under the Clean Air Act to regulate methane emissions from oil and gas operations but it has so far declined to exercise it, opting instead to set standards for volatile organic compounds that will have the incidental benefit of reducing methane at new wells. Unfortunately, existing natural gas wells, including those built recently for the purpose of fracking (which number in the hundreds of thousands), are not covered.

Even if methane leaks are contained, natural gas could do more harm than good by delaying the transition to cleaner, more efficient forms of energy. Cutting emissions by a factor of three or four hardly makes any difference in terms of preventing dangerous increases in global temperature. According to respected climate scientists like Ken Caldeira, emissions must be cut by a factor of ten or twenty times to avoid a significant amount of warming this century. At best, natural gas is a short-term transitional fuel that should see peak use no later than 2030. A major investment in gas threatens to create yet another carbon lock-in unless steps are taken to use gas as leverage. Encouraging utilities to replace aging, dirty coal plants with cleaner, more efficient gas plants is a net benefit for the environment, but this must be accompanied by more aggressive investments in energy efficiency and renewables.

Gas may seem cheap today, but gas prices are notoriously volatile. Renewable energy’s zero-fuel-cost operates as a hedge against price fluctuations. Power systems must balance gas and renewables to take advantage of cheap gas while simultaneously insuring against fuel price spikes. This underscores the need for strong renewable portfolio standards at the state level. Putting a price on carbon, perhaps via a GHG (green house gas) tax (as recommended by the Congressional Budget Office), would be the single most important policy change at the national level.

Aside from potential climate impacts, fracking raises a number of more immediate issues, including local air pollution, groundwater contamination, earthquakes, and habitat fragmentation. These effects can be managed through effective regulation and best practices. However, fracking is currently exempted from eight different federal environmental laws and state regulations vary widely across the country. New York and its fellow litigants point to a plethora of independent studies, recommending more consistent and comprehensive regulatory approaches to the expanded scope of fracking.

In sum, the arrival of cheap natural gas poses both opportunities and risks. While it can be used to build a more sustainable energy system, there is a risk that cheap natural gas will perpetuate our economy’s dependence on fossil fuels. Looking ahead to 2014, the EPA should agree to establish a schedule under the Clean Air Act for setting a methane standard balancing the short-term benefits of bridge fuels and long-term advantages of renewables.