ACSF and several other groups initiated and sponsored the report. The other groups included the MIT Energy Initiative (MITEI) members Hess Corporation and Agencia Naçional de Hidrocarburos (Colombia), the Gas Technology Institute (GTI), Exelon, and an anonymous donor. Gregory C. Staple, the Foundation’s CEO, served on the report’s 18-person advisory committee. Incoming Energy Secretary Ernest J. Moniz, former MITEI director, testified before the U.S. Senate Committee on Energy and Natural Resources about this report.

Full Report

Download PDF • Request Print Copy

In the Press

Ernest Moniz, MIT Physicist, Nominated as Energy Secretary: The Washington Post, March 4, 2013

An M.I.T. Plan for Natural Gas with Planet in Mind: New York Times, June 9, 2011

MIT: Natural Gas to Become More Entwined in US Economy: SNL Financial, June 9, 2011

Natural Gas Gives Edge to US Manufacturers: Financial Times, June 8, 2011

The Future of Natural Gas: Geology.com, June 28, 2010

Does Our Energy Future Line in Natural Gas?:  Consumer Affairs, June 28, 2010

The Future of Natural Gas: RedOrbit, June 28, 2010

Offshore Drilling Uncertainty Likely to Boost Search for Onshore Deposits: allvoices, June 28, 2010‎

Study Says Natural Gas Use Likely to Double: New York Times, June 25, 2010

MIT Study Urges US Gas Industry to Back Price on Carbon Emissions: Platts, June 25, 2010

For Climate Relief, US Will Turn to Gas: Nature.com, June 25, 2010

MIT Researchers See Natural Gas as the Choice for Lower Carbon Emissions: New York Times, June 25, 2010

MIT: The Future Is A (Natural) Gas: Forbes, June 25, 2010

Natural Gas Seen as Key in a Carbon-Constrained Futuree: Greentech Media, June 25, 2010

MIT Releases Major Report: The Future of Natural Gas: PhysOrg.com, June 25, 2010

MITEI-Led Study Offers Comprehensive Look at The Future of Natural Gas: MIT News, June 25, 2010

Natural Gas Use to Double in US in Coming Decades: MIT Report: Treehugger, June 25, 2010‎

By Gregory C. Staple Esq. and Joel L. Swerdlow, Ph.D., 2009.

Working Paper

“Regulations are prompting the use of cleaner, more efficient power plants, and current electric transmission planning will shape the grid that connects those plants for years to come.”

Since 2010, ACSF has docketed comments in various federal regulatory proceedings to help facilitate the use of reliable, clean power (See Better Rules to Live By, p. 9). This article highlights the role of the Federal Energy Regulatory Commission (FERC) and two sets of regulatory dockets that may shape the grid for years to come: 1) federal environmental rules and 2) interstate electric transmission planning.

Environmental Regulation and the Electric Power Sector

The electric power sector is undergoing significant change. Environmental regulations are prompting the use of cleaner, more efficient power plants. And domestic natural gas production has dramatically increased, providing an abundant, affordable, low-emitting fuel source for power plants. Intermittent renewable energy also is being increasingly deployed.

Over the last year, the U.S. Environmental Protection Agency has finalized two significant power sector rules: the Cross-State Air Pollution Rule and the Mercury and Air Toxics Standards (MATS). The first seeks to reduce power plant pollution that drifts across state lines and impedes the ability of downwind states to meet federal air quality standards. The second addresses toxic emissions of mercury and other “hazardous air pollutants.” Both of these rules have been decades in the making.

Due to the power sector’s significant emissions and relatively costly pollution control equipment, EPA power sector rules are frequently subject to litigation. The Cross-State rule and MATS are both being challenged in the DC Circuit Court of Appeals. Regardless of how the Court rules, however, at least some of the emission control measures required by these rules are likely to be upheld under the Clean Air Act. Additional EPA regulations, including for coal ash and wastewater, will likely further impact coal-fired power. Bottom line: The electric power sector is becoming increasingly clean, as many older, high-emitting coal plants either retrofit with advanced emission controls or retire.

FERC’s Role in Processing Environmental Compliance Extensions

Some power companies and regulators have raised concerns that coal plant retirements brought about by the Cross- State rule and MATS may leave the grid with insufficient power. In particular, the stringent MATS generally require compliance by 2015. However, EPA can extend the MATS compliance deadline for power plant operators on a case-by-case basis.

On January 20, FERC issued a staff white paper for public comment describing how the agency might advise EPA on extension requests under the MATS that involve closing power plants and the subsequent affect on reliability standards. In response, ACSF filed comments urging a common sense solution: power plant operators should undertake early and transparent planning for plant retirements that meaningfully involves state regulators and other stakeholders. The ACSF comments identified how FERC could act through its statutory authority over electric system reliability to undertake a more proactive approach to reliability issues. The comments identified the importance of FERC working with state regulators and other stakeholders. In a subsequent policy statement, FERC signaled its intention to continue addressing potential reliability issues and to work with states via the National Association of Regulatory Utility Commissioners/ FERC Forum on Reliability and the Environment. FERC also stated that it will continue to review relevant information submitted by other stakeholders.

In its FERC comments, ACSF alsostressed that a large number of existing gas-fired power plants are underutilized. As older coal plants retire, these underutilized gas power plants provide an obvious means of helping to provide replacement power and promote grid reliability.

Transmission Planning

FERC has also been active with respect to transmission planning and related issues. Notably FERC Order 1000 (issued on July 21, 2011) requires authorities to plan for new facilities both within a region and between regions.

ACSF has been providing input on related issues, including two studies by the Department of Energy on transmission congestion in both 2010 and 2012.

ACSF advised DOE that, given “the low emissions profile and relatively small footprint of natural gas electric generating units, these units are uniquely well-suited for siting closer to sources of electricity demand;” they, therefore, can reduce transmission congestion. Similarly, natural gas located closer to load centers can reduce the need for, costs, and environmental impacts associated with long-distance transmission.

Order 1000 and Public Policy Requirements

Order 1000 also requires transmission needs to be guided by “public policy requirements,” such as the Cross-State rule and MATS. Both renewables and low-emitting gas-fired plants can help achieve the goal of reducing power sector emissions. In particular, natural gas emits no mercury and either little or none of other major pollutants emitted by coal-fired power plants (see Clean Skies Infographic).

Furthermore, natural gas plants can be more flexible than coal-fired power plants, and can ramp generation up and down to provide support to intermittent renewable generation when the wind isn’t blowing and the sun isn’t shining. In doing so, natural gas-fired power helps states to meet their Renewable Portfolio Standards–also “public policy requirements” under order 1000.

In its FERC comments ACSF has also argued that consideration should be given to how capacity markets and compensation for ancillary services can promote the type of flexible gasfired generation.

For background on the multiple fuel sources used by power plants, view Energy 101: Electricity Generation.

On April 13, the U.S. Environmental Protection Agency proposed a significant standard to limit greenhouse gas (GHG) emissions from new fossil-fuel fired electric power plants. Power plants are the largest anthropogenic source of GHG emissions in the United States, and coal-fired power plants have particularly high levels of these emissions.

This proposed rule builds on EPA’s proposed regulation of GHG emissions from vehicles, the second largest source of these emissions.

The proposed power plant GHG rule is due to usher in a new era of direct carbon limits for new power plants.

Significantly, the proposed rule bases the GHG emission limit “on the performance of widely used natural gas combined cycle” technology. Thus, natural gas units will literally “set the standard” for fossil fuel units more broadly. To control their inherently higher GHG emissions, new coal-fired power plants would generally have to install carbon capture and storage equipment.

In proposing these power plant GHG standards, EPA recognizes natural gas as a foundation of our nation’s clean energy future. Here are some of EPA’s comments on natural gas in the proposed rulemaking docket:

• “EPA’s proposed standard reflects the ongoing trend in the power sector to build cleaner plants, including new, clean-burning, efficient natural gas generation, which is already the technology of choice for new and planned power plants.”
• “Natural gas prices have stabilized over the past few years as new drilling techniques have brought additional supply to the marketplace. As a result, natural gas prices are expected to be competitive for the foreseeable future and utilities are likely to rely heavily on natural gas to meet new demand for electricity generation.”
• “Because this standard is in line with current industry investment patterns, this proposed standard is not expected to have notable costs and is not projected to impact electricity prices or reliability.” In short, EPA emphasizes that lowcost, efficient natural gas units can provide an effective means to address GHG emissions.

Of course, low-emitting power sources, such as renewable energy, also have a key role in reducing power sector emissions. But natural gas generation, which can operate more flexibly than other generation types, also has been broadly recognized as needed to provide load-support to variable intermittent renewal energy sources.

The EPA rulemaking notice excerpted on this page can be found at: http://epa.gov/carbonpollutionstandard/actions.html.

[sharethis]

In this episode of Energy 101 host Lacey Lett explains how combined cycle natural gas-fired power plants work.

As America produces more and more natural gas, lots of people are thinking about using clean-burning natural gas to run our cars and trucks. It’s not only likely to cost less but it could cut back our oil imports a whole lot, especially from unfriendly regimes.

On March 12,  ACSF issued a new, 227-page publication which brings together more than a dozen presentations made at the Foundation’s landmark November 4, 2011, public forum on Carbon Capture and Sequestration (CCS) for natural gas-fired electricity generation. CCS for gas-fired plants may be needed over the long term if there is widespread future regulation of greenhouse gas emissions. The ACSF forum brought together leaders from the Clean Energy Group of utilities, Great Plains Institute, President’s Interagency Task Force on CCS, California CCS Review Panel, MIT, Carnegie Mellon University, the Clean Air Task Force, EPA and other organizations to review the presentations. Hard copies are available on request; the report can also be downloaded here – (PDF, 36.5 MB).

Pre-conference documents, media and schedule are still available below.

A CARBON CAPTURE AND STORAGE LEADERSHIP FORUM FOR NATURAL GAS POWER PLANTS

While combined cycle gas turbine facilities emit roughly 60% less CO₂ per kilowatt hour than conventional coal generators, over the long term controlling the CO₂ footprint of gas-fired power via carbon capture and storage (CCS) will be essential for achieving our carbon reduction goals.

Today, however, U.S. RD&D efforts have concentrated almost exclusively on developing and deploying CCS for coal.

Click here to download our CCS Forum Flyer.

Click here to see ACSF’s background paper.

Agenda

Forum agenda (PDF download)

8:30 am – 9:00 am

Registration and Continental Breakfast

9:00 am – 9:15 am

Introduction, Forum Overview: Greg Staple, CEO, American Clean Skies Foundation

9:15 am – 10:15 am

Natural Gas and CCS: Framing the Issues (Video )

• Jerome Hinkle, VP Policy and Research, American Clean Skies Foundation; Download PDF
• Joel Swisher, CAMCO International; Consulting Professor of Civil and Environmental Engineering, Stanford University; (Presented by Jerome Hinkle) Download PDF
• Carl Bauer, Chair, California Carbon Capture and Storage Review Panel; former Director, National Energy Technology Laboratory; Download PDF

10:15 am – 10:30 am

Break

10:30 am – 12:00 pm

CS Technology and Economics for Natural Gas(Video )

• Robert Hilton, Alstom Power; Download PDF
• Howard Herzog, Senior Research Engineer, MIT Energy Initiative; Download PDF
• Edward Rubin, The Alumni Professor of Environmental Engineering and Science; Professor, Engineering and Public Policy and Mechanical Engineering, Carnegie Mellon University; Download PDF

12:10 pm – 1:00 pm

Lunch

Keynote: Politics of RD&D Funding: Honorable Byron L. Dorgan, retired; Senator from North Dakota—Chairman, Energy and Water Appropriations Subcommittee; Chairman, Democratic Policy Committee, senior member, Energy and Natural Resources Committee; Chairman, Indian Affairs Committee; now Senior Fellow at the Bipartisan Policy Center, and Co-chair of the BPC Energy Project.
(Video )

1:00 pm – 2:30 pm

Demonstrating CCS(Video )

• Brad Crabtree, Policy Director, Great Plains Institute; Download PDF
• Michael Holmes, PCOR Director, Energy and Environmental Research Center, University of North Dakota; Download PDF
• Mark Taylor, Lead Analyst, CCS & Geothermal, Bloomberg New Energy Finance
• George Peridas, Scientist, Climate Center, Natural Resources Defense Council; Download PDF

2:30 pm – 2:45 pm

Break

2:45 pm – 4:15 pm

Deploying CCS on Natural Gas: Policy and Regulatory Landscape(Video )

• Tom Curry, Vice President, M.J. Bradley & Associates LLC; Download PDF
• Dina Kruger, Principal, Kruger Environmental Strategies, former Director of the Climate Change Division, USEPA; President’s CCS Task Force; Download PDF
• Don Neal, Vice President Environment, Health, and Safety, Calpine Corporation; Download PDF

4:15 pm – 4:30 pm

Closing Thoughts: Jerome Hinkle, VP Policy and Research, American Clean Skies Foundation

Shale Gas and America’s Future is a  30-minute, made-for-TV film that looks at how local communities in Pennsylvania are dealing with the potential benefits and risks of shale gas development. In November 2012 the film was awarded the top prize for short documentaries by the Washington D.C.-area association of the Television, Internet & Video Association (TIVA). The film was produced for ACSF in 2010 by the award-winning, Washington D.C.-based documentary group Hillmann & Carr. Click on the image below to view the film.

The second image takes you to ShaleCountry.com. This web site features first-person accounts of the impact of gas production on the economy, the environment and the lives of people living in major shale “plays”– the Haynesville  in Louisiana,  the Fayetteville in Arkansas, and the Marcellus in New York and Pennsylvania.

[SlideDeck id=’809′ width=’682px’ height=’280px’]

Today experts tell us that America has roughly a 100-year supply of natural gas, a fuel that burns with 50% less global warming pollution than coal, and 20% less than most petroleum fuels. And, on a barrels-to-barrels comparison, in 2010, domestic U.S. production of natural gas was greater than that of coal and almost double that for oil.

Full Report (PDF) | Full report (HTML, one page) | In the Press

This paper provides an updated, comparative fuel chain calculation of the greenhouse gas (GHG) emissions of natural gas- and coal-fired electricity. The analysis incorporates revised 2011 US EPA estimates of fugitive methane emissions from the upstream (i.e., production) portion of the fuel chain. Based on this revised EPA data and average generation heat rates, we find that existing gas-fired generation is still, on average, about 51% less GHG intensive than existing coal-fired generation. Similarly, a new gas-fired combined-cycle unit produces about 52% less GHG emissions per kWh than a new coal-fired steam unit; about 58% less than the average coal-fired unit; and about 63% less than a typical older coal-fired unit.

Key relevant concepts include:

• footprint/fuel chain
• fugitive emission
• efficiency
• GHG intensity

Read the report (Adobe PDF document).

In The Press

Press release

Cornell study on shale gas flawed?: UPI.com, April 20 2011.

Emissions All In, Gas Still Beats Coal, Says Report: NGI’s Shale Daily, April 22 2011.

Findings & Recommendations | Full Report (PDF) | Task Force Members | Original Commissioned Research | In the Press

On March 22, the American Clean Skies Foundation and the Bipartisan Policy Center released the final report of a jointly convened task force of environmentalists, consumer advocates and natural gas users that looked at natural gas markets.
Read the complete 70-page report (Adobe PDF document, ~5MB).

“The fact that a diverse Task Force like this could reach a consensus on these particular findings and recommendations was unexpected,” said Task Force co-Chair Gregory C. Staple, CEO of ACSF. “This consensus suggests that, although we may have a stalemate on many other energy issues, there is at least one important area — natural gas — where progress is within reach.”

With storage and potential import capacity at a record high, the Task Force predicted a relatively stable price horizon for natural gas through the next decade. Greater use of long-term contracts and other hedging arrangements are recommended to mitigate remaining price variability. Federal and state regulators are urged to avoid measures that limit these financial tools.

The Task Force members represent natural gas producers and distributors, consumer groups and large industrial users, as well as independent experts, state regulatory commissions and environmental groups. During the yearlong work, the Task Force commissioned 11 background papers from leading industry and academic experts.

Interest has grown recently in natural gas as a cleaner, low-carbon, low-cost alternative to other fossil fuels in the electric power and industrial sectors. In his State of the Union address, President Obama called for a federal clean energy standard for generating electricity that could be fulfilled through the use of natural gas.

Task Force Members

Sponsoring Task Force Members

Additional Task Force Members

In The Press

Press release

Natural Gas Now Viewed as Safer Bet: New York Times, March 21 2011.

Congressmen Reed and Boren Hail Study on Natural Gas Markets: March 31 2011

NATURAL GAS: Utilities must embrace long-term contracts, market forces: E&E News, March 22 2011

Task Force: Shales, Price Stability Keys to Growing Gas Role: NGI’s Shale Daily, March 23 2011

US Faces ‘Good Problem’ as Gas Glut Stabilizes Prices: SNL Energy Finance Daily, March 24 2011.

Task Force: Dodd-Frank Could Impede Risk Management, Hedging: SNL, March 23 2011.

Stable price remains the key to shifting power sector from coal to natural gas: ClimateWire, March 23 2011

Report calls for increased use of natural gas: NewsOK, March 23 2011

Task force recommends natural gas shift: TulsaWorld, March 23 2011

Shale revolution enabling regulators to fight gas price volatility: SNL Natural Gas Report, February 15 2011.

Commissioned Papers

Natural Gas Price Volatility: Lessons from Other Markets
Austin Whitman
M.J. Bradley & Associates, LLC

The report draws lessons from markets in the U.S., Europe, and Asia to determine (1) how natural gas markets are structured in the largest consuming regions of the world, (2) the effect that exposure to natural gas prices has had on corporate performance, and (3) how natural gas price movements relate to those of other commodities.

Long-term Contracting for Natural Gas
Bruce Henning
ICF Consulting

This paper defines the objectives and elements of long-term contracts; traces the evolution of natural gas contracts; assesses the economic value of long-term contracts; analyzes the relationship between long-term contracts and natural gas price stability; and examines natural gas contracts for regulated entities.

Managing Natural Gas Price Volatility: Principles and Practices Across the Industry
Steve H. Levine and Frank C. Graves
The Brattle Group

This paper describes gas market risk characteristics; identifies risk management principles and tools for managing price volatility; describes risk management processes and controls, and analyzes limitations in managing price volatility; and compares industry hedging practices.

Staff Memo: Water Impacts Associated with Shale Gas Development
Lourdes Long
BPC Staff

How might water availability challenges constrain efforts to expand shale gas production? This memo summarizes the main water impacts associated with shale gas development in order to address this central question.

Introduction to North American Natural Gas Markets: Supply and Demand Side Drivers of Volatility Since the 1980s
Rick Smead
Navigant Consulting, Inc.

This paper examines the history of chronic natural gas price instability across three periods from 1976-2010, and identifies fundamental changes in supply and demand that could influence natural gas markets going forward.

Impact of LNG and Market Globalization
Ken Medlock
Rice University’s James Baker Institute for Public Policy

This paper seeks to answer central questions about LNG and market globalization: What are the potential impacts of North American LNG imports and exports on natural gas price volatility? Given the relative abundance of shale gas in North America, is there any reason to believe that LNG imports will rise in the coming years? In the US, how do LNG, the domestic shale gas resource, and domestic storage interact? If there are any potential adverse impacts of globalized gas trade and increased LNG imports, are there policy options available to mitigate the adverse impacts?

Abundant Shale Gas Resources, Short-Term Volatility, and Long-Term Stability of Natural Gas Prices
Stephen Brown and Alan Krupnick
Resources for the Future

This paper examines the extent to which natural gas prices are likely to remain attractive to consumers. The authors examine how the apparent abundance of natural gas and projected growth of its use might affect natural gas prices, production and consumption, using NEMS‐RFF to model a number of scenarios through 2030.

FASB Accounting Rules and Implications for Natural Gas Purchase Agreements
Bente Villadsen and Fiona Wang
The Brattle Group

An overview of FASB accounting rules and their implications for natural gas contracts; normal purchases and sales exemption and fair value accounting treatment of natural gas contracts.

Staff Memo: The Impact of EPA Utility MACT Rule on Natural Gas Demand
Jennifer Macedonia and Lourdes Long
BPC Staff

A background on the MACT Standards and the results of BPC modeling to analyze the impacts of the MACT rule on electric utility generation and natural gas demand.

NATURAL GAS VEHICLES (NGVs): An Economical and Clean Alternative

Natural gas can also be compressed and used to fuel the internal combustion engines used in cars, trucks and buses.

• Reduce carbon monoxide emissions 90%-97%
• Reduce nitrogen oxide emissions 35%-60%
• Potentially reduce non-methane hydrocarbon emissions 50%-75%
• Emit fewer toxic and carcinogenic pollutants
• Emit little or no particulate matter

(more…)

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.

(more…)

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.

(more…)