A study group at the Massachusetts Institute of Technology has concluded that natural gas will play a leading role in the U.S. over the next several decades, both in providing fuel for the nation’s energy needs and in reducing greenhous gas emissions. The study was conducted over two years by a group of thirty MIT faculty members, researchers and graduate students, assisted by an advisory committee of industry leaders and consultants. The study group has released an interim 80-page report summarizing its findings. A full report with additional analysis will follow later this year.
Among the study’s findings:
— New discoveries of natural gas will result in greatly expanded natural gas use, especially in electricity generation.
— Natural gas will provide an increased share of energy in the near and intermediate term because of its substantially lower carbon footprint. Natural gas is “a ‘bridge’ to a low-carbon future.” “Among the fossil fuels, it has the lowest carbon intensity, emitting less carbon dioxide per unit of energy generated than other fossil fuels.”
— It is unlikely that use of natural gas as an alternative to gasoline will develop into a major new market for gas in the near term.
— The environmental impacts of development of natural gas shales are “manageable but challenging,” particularly in the area of water management and effective disposal of fracture fluids. The risk of contamination of freshwater aquifers from fracture fluids is small, and “good oil-field practice and existing legislation should be sufficient to manage this risk.” “The effective disposal of fracture fluids may represent more of a challenge, … although again it must be put into the context of routine oil field operations. Every year the onshore U.S. industry safely disposes of around 18 billion barrels of produced water. By comparison, a high-volume shale fracturing operation may return around 50 thousand barrels of fracture fluid and formation water to the surface. The challenge is that these relatively small volumes are concentrated in time and space.”
— Advanced Natural Gas/Natural Gas Combined Cycle electric generation plants “should be pursued as a near-term option for reducing CO2 emissions.” “Preliminary results … suggest that a near-term initiative to displace coal generation with additional generation from existing natural gas combined cycle capacity could result in reductions in power sector CO2 emissions on the order of 10%.”
— Government-supported research on the environmental challenges of shale gas development should be increased, especially to reduce water usage in fracturing and to develop cost-effective water recycling technology. “Integrated regional water usage and disposal plans and disclosure of hydraulic fracture fluid components should be required.”
— “…the application of horizontal drilling and hydraulic fracturing technology to the shales has caused resource estimates to grow over a five-year period from a relatively minor 35 Tcf (NPC, 2003) to a current estimate of 615 Tcf (PGC, 2008), with a range of 420-870 Tcf. This resource growth is a testament to the power of technology application in the development of resources, and also provides an illustration of the large uncertainty inherent in all resource estimates.”
MIT’s study comes on the heels of the EPA’s decision to take over permitting for air emissions at three large Texas industrial plants, and its announcement that it is tightening its rules on sulfur dioxide emissions from coal plants and other sources. See Texas Tribune article. These actions and others will encourage utilities to develop new gas-fired power plants instead of the cheaper-fuel coal-fired plants. A new study from Navigant Consulting has concluded that utilities are switching from coal to natural gas and renewable energy sources. The report says that EPA regulations will force the retirement of about 1/4th of U.S. coal-burning generation facilities by 2015, and that 120 coal-fired power plant projects were canceled over the last decade, and another 50 plants face lawsuits from opponents seeking to halt their construction or operation. Up to 45 gigawatts of coal-fired power generation could be retired by 2020 because of increased EPA and state regulations, which could stimulate about 5 billion cubic feet per day of additional gas demand.
MIT’s study also adds weight to the industry’s argument that development of unconventional shale gas resources is safe and necessary for development of cleaner energy in the U.S.