In Washington, natural gas has been lumped in with the oil industry as a conventional fossil fuel. And, as Robin West, chairman of PFC Energy, puts it: “The oil industry is just toxic, politically.”
Yet natural gas is the cleanest of the fossil fuels (oil, coal and natural gas), and the industry says new technology has brought US supplies up from about 30 years’ worth to 100 years’ worth in the past few years.
Some argue that the Obama Administration should be looking at to act as a bridge until renewables can be developed economically and at scale to make an impact in the US energy mix. Indeed, West believes that natural gas can increasingly back out high carbon coal, cutting greenhouse gas emissions:
This whole gas play is a game changer in north American energy. This can change the whole carbon policy in the US.
The problem for the natural gas industry is that policy makers have so far discounted natural gas. The natural gas lobby had not bothered to organise itself until it saw that the Waxman-Markey bill going through Congress not only provided it no benefits, but actually contained measures that would hurt the industry.
Congress is looking at tapping the oil and gas industry to raise $31bn over the next decade by cutting tax breaks. Yet the industry fears the tax increases will damage the small companies producing most US oil and gas, undermining energy independence and security.
While oil has been trying to fight the battle against looming punitive legislation, the natural gas industry only joined forces in March to form America’s Natural Gas Alliance to lobby Congress. Rod Lowman, Alliance president, said it was too late to have an impact in the House, so it is focusing efforts on the Senate.
He says senators are listening, and he has hopes they will recognise the growing role natural gas could play in the US, given how new technology has opened unconventional shale gas projects across the country, making the potential role of natural gas far larger than anyone anticipated just three years ago.
It is one West considers crucial, noting that transitioning from hydrocarbons to alternatives requires altering massive markets, which will take years and use technology that does not yet exist (such as cellulosic ethanol) or require massive subsidies to industries that are not economic.
President Barack Obama’s target is to cut US greenhouse gas emissions back to 1990 levels by 2020. They are now about 14 per cent above 1990 levels. By 2050, the administration wants to cut emissions to 80 per cent below 1990 levels. Karen Harbert of the US Chamber of Commerce, says:
President Obama’s 2020 emissions goal would require a 1bn ton reduction in CO2 emissions. To meet that goal, America would have to shut down half of its coal plants and increase our nuclear capacity by 125 percent or our wind capacity by 900 percent.
Given the enormity of that task, conventional production will be needed for years. Whether supplies will be sufficient will depend on the new tax initiatives and how well the natural gas alliance fights against them.
An abundance of natural gas, well into winter (FT Energy Source 24/07/09)
The pitfalls of natural gas as the default climate change option (FT Energy Source, 18/06/09)