The Natural Gas Debate
The Economist just finished hosting an online debate on natural gas. The resolution was an interesting one: This house believes that natural gas will do more than renewables to limit the world’s carbon emissions. At first glance, the statement may seem preposterous; after all natural gas is a fossil fuel and natural gas usage will therefore generate net carbon dioxide emissions. But there is perhaps more there than meets the eye.
Arguing for the resolution was Robert Bryce, author of Power Hungry and Gusher of Lies, and Senior Fellow at the Center for Energy Policy and the Environment at the Manhattan Institute. Opposing the resolution was Steve Sawyer, the Secretary General for the Global Wind Energy Council. I was asked to contribute an essay to the debate, but I didn’t feel really comfortable being put in the position of either defending or opposing natural gas. I was told that this wouldn’t be a problem, that I could write what I wanted to write and wouldn’t have to choose a side. What I sought to do was not pit natural gas against renewables, but rather to bring up some factors that had thus far not been considered. I will include my full entry below.
Initial voting showed that only 20% of readers agreed with the resolution, but by the end of the debate that number had grown to 49%. Either Robert Bryce did a good job of convincing people, or perhaps some natural gas advocates started to spread the word that they needed to go vote (or more likely, a combination of the two).
As far as my opinion of the question, as I said in my essay I think it comes down to what is theoretically possible versus what is likely. It is theoretically possible that renewables could reduce our net carbon emissions to zero. But over the next decade or so, I think it is much more likely that natural gas does in fact do more than renewables to limit carbon emissions. In many cases — as I argued in my essay — renewables are highly dependent upon natural gas anyway, so the roles sometimes overlap. But I am getting ahead of myself. Below is the full text of the essay I offered. Here is a link to the original.
The question at hand—whether natural gas will do more than renewables to limit the world’s carbon emissions—is really a question about the long-term economic viability and sustainability of many renewables. Ironically, for many renewables the economic viability may be influenced by the price and availability of natural gas, because many forms of renewable energy are presently dependent upon natural gas.
For corn ethanol, natural gas is used to produce the fertilizer for the corn and the process steam for the ethanol refinery. In the production of biodiesel, natural gas is used not only in the supply chain for steam and fertilizer but also for the production of methanol, a key reagent in the chemical reaction used to convert vegetable oils into biodiesel.
Many sources of renewable energy utilize hydrogen, and most of the world’s industrial hydrogen comes from natural gas. In America, for example, about 95% of industrial hydrogen comes from natural gas, and thus processes that rely on hydrogen are dependent on natural gas.
For hydrotreating processes that are used to produce “green diesel” (a true hydrocarbon unlike biodiesel), natural gas provides the hydrogen needed to hydrotreat the oils and convert them to diesel. For green diesel produced from biomass via the Fischer-Tropsch process, hydrogen can be added to significantly boost the yields of the process.
But natural gas also plays an important role in the production of renewable electricity. Consider wind power. If the wind dies down during a period of high demand, other sources of electricity must be brought online. In an ideal world, wind power could be backed by hydropower, but for many areas this is not an option. Natural gas is often called upon to fill that role, because natural-gas-fired generators can respond fairly quickly if the wind stops blowing.
Natural gas can also limit future emissions in other ways. First, as has already been discussed by both Robert Bryce and Steve Sawyer, carbon-dioxide emissions in power plants are sharply reduced when using natural gas instead of coal. Second, as noted, natural gas plays a key role in enabling many renewables through the production of fertilizers, electricity and hydrogen, and as back-up power for intermittent sources of electricity. But natural gas also plays an important role directly as a transport fuel.
Countries like Brazil and India are well known for their sugarcane ethanol production. Less well known is the fact that Brazil and India have some of the largest compressed natural gas (CNG) fleets in the world. Brazil’s fleet of 1.6m CNG vehicles represents 14% of the world’s total, and is larger than the combined natural gas fleets of the European Union and all of North America. India’s fleet is just under 1m vehicles. (Neighboring Pakistan has the world’s largest CNG fleet at 2.3m vehicles.)
By comparison, the CNG fleet in America is only 110,000 vehicles (of a total of approximately 250m vehicles), and in Britain there are only about 200 CNG vehicles. As in the power sector, use of natural gas greatly reduces emissions relative to petroleum. The American government estimates that natural gas vehicles emit 60-90% less smog-producing pollutants and 30-40% less greenhouse gas emissions than petroleum-fueled cars — thus there is enormous potential for developed countries to reduce their carbon emissions by encouraging a transition to CNG vehicles.
Given the environmental and price advantages over petroleum (prices are presently $4.40 per million BTU for natural gas and $16.84 per million BTU for Brent crude, which must still be refined into finished products), it may seem surprising that more developed countries have not aggressively pursued CNG vehicles. But instead of encouraging greater use of natural gas in the transport sector, America has burdensome licensing requirements that make the conversion of vehicles to CNG very expensive.
In any case, the potential is there for natural gas to provide an enormous reduction in carbon emissions via multiple pathways. Will it ultimately provide a greater reduction than will renewables? That is a question of what is theoretically possible versus what is likely. In theory, algae-derived fuels produced with renewable fertilizers, electricity, and hydrogen could provide a large reduction in net carbon emissions in the transport sector. But many technical hurdles remain, and there are no assurances that they will be overcome.
On the other hand, we know how to build natural-gas-fired power plants and CNG vehicles today. We can easily quantify the carbon-emission savings from doing so. But instead of arguing that perhaps renewables cannot compete with the emission savings from expanded use of natural gas, I have a different suggestion. Let each side give it their best effort, and if each is moderately successful then we all win.