American Clean Skies Foundation

Climate Change Legislation

Because natural gas can generate electricity with 50% less CO₂ than coal, the expanded use of natural gas could be a "game changer" for U.S. climate action.

However, the cap-and-trade bills now before the Congress do not give priority to increasing the power sector's use of natural gas. We think that is a mistake and have developed a natgas incentive program that would address this shortcoming.

This program would enable Congress to accelerate CO₂ emission reductions from capped emitters by awarding additional emission rights to parties that use natural gas in place of a higher carbon fuel. One ton of emission credits would be awarded for every net ton of CO₂ emission reductions attributable to the substitution of natural gas, as compared to business as usual.

For more details about this cap-and-trade based incentive program, see this two page summary. Several examples of how capped entities would earn emission credits for using natural gas can be found here.

The merits of using more natural gas to help the country meet the environmental objectives set by climate change legislation have been endorsed by the Center for American Progress, the WorldWatch Institute and the Executive Director of the Sierra Club, among others. The specific natgas incentive program developed by the Foundation has also won the support of America’s Natural Gas Alliance and the Natural Gas Supply Association.

Copenhagen Forum

The Foundation, together with the Worldwatch Institute and the UN Foundation, brought natural gas to the center of climate policy discussions in Copenhagen during the landmark UN negotiations for a new global climate change treaty in December 2009. These negotiations are formally known as the 15th Conference of the Parties (COP-15) to the UN Convention on Climate Change (UNFCC). The initiative will highlight the potential of natural gas to contribute to near- and medium-term emission reductions.

On December 12, ACSF and its co-sponsors hosted a major Side Event at the Copenhagen headquarters of the Danish Society of Engineers (known as the IDA). At the Side Event, ACSF released a comprehensive new working paper entitled "North America's New Natural Gas Resources and their Potential Impact on Energy and Climate Security." Download the introduction (PDF, 340kb).

Copies can be obtained by request from the Foundation. See the media advisory and agenda for more details about this event.

ACSF's Copenhagen event was also covered by the Sopris Foundation. See their interview with CEO Gregory C. Staple.

Also at the event, ACSF and RPSEA (Research Partnership to Secure Energy for America) jointly released the following report "Worldwide Gas Shales and Unconventional Gas: A Status Report." The report was commissioned from Advanced Resources International, Inc. and written by ARI's President, Vello A. Kuuskraa.

Managing NatGas Price Volatility

ACSF and the National Commission on Energy Policy (NCEP) are co-sponsoring a 16-month Task Force to develop new government and private sector options for managing natgas price volatility.

America’s growing natural gas resource base is now widely recognized. Yet, the development of these resources, especially unconventional shale gas "plays", will depend on sustained long term demand from end-users at prices that are sufficient to cover upstream production and transport costs. Whether or not this demand will be forthcoming – and at a sufficient price level – is now the subject of considerable debate.

North American markets for natural gas have historically seen periods of substantial price escalation and volatility, and these price swings have tended to destroy industrial demand followed, in turn, by large cut backs in production and E&P activities.

Against this background, a full understanding of the factors underlying market volatility for this commodity and the best options available for managing it -- both from a regulatory standpoint and through commercial, private sector activities – takes on a new importance. Indeed, better tools for managing price volatility may be an essential prerequisite for recognizing the economic promise of America’s new natgas resource base as well as the potential public policy benefits.

ACSF and NCEP are assembling a task force of leading stakeholders to examine these issues through three sets of white papers and broad-based, but invitation-only, workshops. The papers will cover: (1) economic and legal background; (2) private sector options for managing volatility; and (3) public policy options. Based on the papers and workshop dialogues, the Foundation and NCEP plan to prepare a final, book-length report and recommendations for government action and private sector initiatives. This work will then be presented at a day long public conference.

Our current schedule contemplates workshops in March, June, and October of 2010, with a final report publicly released in January 2011. Up to eight corporate co-sponsors will be accepted for this project, and some sponsorship opportunities are still available. Please contact the Foundation's CEO if you are interested.

MIT Future of Gas Study

In 2008, the Foundation agreed to underwrite a comprehensive new two-year study by the Massachusetts Institute of Technology (MIT) faculty on the role of natural gas in the United States energy future. The study is designed to provide a detailed assessment of the supply of natural gas both in the U.S. and overseas over the mid to longer term, and to examine the potential sources of demand for natural gas during this time frame.

This study, which will be completed in the Summer of 2010, will augment MIT's prior reports on The Future of Coal (2007) and The Future of Nuclear Power (2003).

The study is being directed by Dr. Ernest Moniz, Director of the MIT Energy Initiative, and Melanie Kenderdine, Associate Director.

The work of the MIT study team is also overseen by an independent Advisory Board whose members include: