With Coal On The Way Out, Policymakers Have Their Eye On Natural Gas

While the nation focuses on the Russian invasion of Ukraine, energy and environmental wonks are quietly developing plans to be carbon neutral by 2050. The thrust: provide tax incentives to encourage the growth of renewable energy and to impose pollution limits at power plants.

President Biden aims to decarbonize the power sector by 2035 and to be net-zero by 2050. His administration considers clean energy to be any facility that produces no CO2 or that can capture carbon and bury it. That keeps natural gas in the fold, which is the biggest part of the country’s electricity mix.

“Coal is on a trajectory” — one that is going down — “but maybe not fast enough” for some, says Emily Fisher, general counsel for the Edison Electric Institute, in a symposium hosted by Our Energy Policy. With utilities vowing to decarbonize, “that is a radical change. Natural gas will be a really hard issue to deal with. But Princeton (University’s) Net-Zero America shows a lot of gas on the system in 2050.” She adds that more than 30 members of the trade group have net-zero goals.

The U.S. Energy Information Administration says that natural gas comprises 40% of the electric generation portfolio while coal is at 19% and falling. Natural gas has been replacing coal because it releases about half the emissions when it is burned in a power plant. Wind and solar make up 10%, although their outlook is much brighter. Nuclear energy makes up 19% of the country’s electricity composition while it represents 60% of its carbon-free generation.

The Environmental Protection Agency says that it is working with stakeholders and that its goal is open communications and transparency. It wants to ensure that electricity is affordable, reliable, and clean. But EPA Administrator Michael Regan told CERAWeek that public health will always be the agency’s “North Star.” To that end, he says that power plants are the largest source of harmful pollutants — something that produces 1.2 million tons of emissions annually and that causes adverse health effects totaling $80 billion a year.

But Regan notes that key pollutants have dropped 80% since 1970. At the same time, the nation’s economy has grown by 270%. Over the last 10 years, the cost of wind energy has fallen by 70% while the price of utility-scale solar power has dropped by 80%. He says that 80% of the country’s coal plants are 30 years or older and they are unable to compete.

Net Zero Pathways

Consider Duke Energy and Southern Company’s Georgia Power: both companies have traditionally been coal-heavy but they have vowed to shed all of their coal plants by 2035. Meantime, Xcel Energy has said it will get 80% of its electricity from carbon-free sources by 2030. Avista Utilities, which runs on hydropower and biomass, has said it will be carbon neutral by 2027. Eversource Energy, which is a distribution company, has promised to do the same by 2030.

“The power sector is cleaner because markets are leading there,” says Regan. “Cleaner renewable electricity is affordable and reliable. And (green energies) are sound, long-term investments.”

To be clear, net-zero does not mean the elimination of fossil fuels. It means off-setting those emissions. The goal: to keep temperature increases to no more than 2 degrees Celsius by 2050. That can be done by creating modern transmission grids that can carry more green electrons and underground pipelines that transport the CO2 that has to be stored — something that U.S. Energy Secretary Jennifer Granholm endorses.

Most experts say that the United States can get 70% of the way to its net-zero goals by 2035. The technologies to do so now exist. But the real challenge is to get the rest of the way. This country, specifically, will have to double the current pace of investment over the next 15 years. The cornerstone of such research will be on energy efficiency, decarbonized electricity, and electrification in transportation, buildings, and industry.

“Net-zero pathways require spending a similar fraction of GDP that we spend on energy today, but we have to immediately shift investments toward new clean infrastructure instead of existing systems,” says Jesse Jenkins, professor at the Princeton’s Andlinger Center for Energy and the Environment. The country is expected to spend $9.4 trillion on energy over the next decade. But that figure needs to rise by 3% to have a chance at hitting decarbonization goals.

But what role will natural gas have in the quest? The International Energy Agency says that oil and gas will still make up 46% of the global energy portfolio in 2040. So the immediate goal is to limit flaring and mitigate fugitive emissions such as methane — a greenhouse gas that is far more potent than CO2. Oil and gas companies want to capture escaping methane because it can be resold to manufacturers.

The American Gas Association adds that natural gas delivers three times more energy on the coldest days of the year than does the electric system on the hottest days. Meantime, the natural gas pipelines can also move hydrogen — up to 20% by volume. The goal is not to leave any stranded infrastructure and to possibly retrofit those systems to meet the needs of a low-carbon world. Moreover, natural gas is used to firm-up wind and solar when the weather does not permit it.

“This is more of a smooth turn than a sharp pivot. There will be a continuing need for fossil fuels during the transition,” says Mike Rutkowski, senior vice president at the Gas Technology Institute, in an earlier call with this reporter. “It is possible to get to net-zero by mid-century. If we scale up, the technologies will materialize and we will have a smooth transition. But time is already running short.”

Clearly, the nation will continue to invest in renewable energies and green technologies. But it will also produce and export natural gas — underscored by the Russian war on Ukraine and the shortfalls now taking place in Europe. While some may grimace, natural gas will remain a prominent part of the American economy not just to generate electricity but also to assist in the manufacturing process.