The Source - Winter 2008 - (Page 25)

electricity. It represents approximately two-thirds of our total current demand for natural gas. Since the United States has never produced more than 19 TCF (dry) in any one year, the pressure on natural gas prices presented by this scenario likely would be extreme, notwithstanding recent predictions from T. Boone Pickens or Chesapeake Energy CEO Aubrey McClendon that new production from shale resources justify widespread use of natural gas as a substitute for liquid petroleum fuel in automobiles. Alternate scenario four Scenario four is a less extreme variant of scenario one. It has the same load growth, renewables and CCS assumptions as scenario one. But it keeps nuclear at the 25 percent from EPA’s “core scenario,” compared with 19 percent today. To meet the 1,700 million ton target, this scenario backs down some of the remaining non-CCS coal and replaces it with gas. The resulting gas burns are a probably tolerable 8 TCF, about 15 percent above today’s level. Conclusions Figure 1 shows percentages of each resource type used to meet demand across the scenarios we developed. The names on the X-axis include the amount of gas burned (in annual TCF) to generate electricity in 2036 for each scenario. We emphasize that the scenarios were constructed without consideration of cost or feasibility. Nonetheless, the analysis leads us to draw the following observations: Figure 1 100% 7% 20% 0% 60% 49% 40% 13% 20% 2% 19% 0% Today (6.9 Tcf ) EPA Core (10.7) 24% 30% 12% 18% 20% 24% 5% 25% 5% 8% 12% • Load growth has a tremendous impact on our ability to address carbon emissions as it helps “bound” the problem. Continued growth at the recent historical rate of 1.5 percent/ year appears unsustainable in the context of carbon regulation. Given the dominance of coal in the fuel mix, it is hard to see how natural gas burns do not rise dramatically without CCS. Gas utilities may wish to support CCS research and development. Nuclear power can substitute for CCS, but our analysis shows that not having nuclear power means even more CCS is necessary and vice versa. Gas utilities may want to encourage use of more renewables than assumed by EPA. Increasing renewables from the 13 percent of the portfolio used by EPA to the 20 percent level that we tested in several scenarios reduces the gas burn by 2 TCF and reduces emissions by approximately 200 million tons of carbon. The bottom line: if load growth is not controlled and other tools do not become available, the switch to natural gas to meet carbon emission targets could be horrendous—even with 20 percent renewables. Gas utilities cannot afford to sit back and wait to see how much gas their electric brethren will have to burn to meet load in a carbon-constrained environment. They need to join the debate and encourage solutions that reflect the interests of all gas consumers. • • • Catherine Elder is a senior director with R.W. Beck. 6% 26% 5% 5% 16% 80% 30% 12% 0% 14% 21% 18% 20% 20% 20% 13% 19% Scenarion 1 (4.0) Scenarion 2 (9.6) 25% 25% Scenarion 3 (12.4) Scenarion 4 (8.1) THE SOURCE | WINTER 2008 , VOL. 1, ISSUE 2 25 http://www.farwestcorrosion.com

Table of Contents Feed for the Digital Edition of The Source - Winter 2008

The Source - Winter 2008 Contents First Person The Bridge to Renewable Energy Future Natural Gas: The Comfortable, Responsible Energy Solution Gas Hydrates: Poised for the Next Phase The Role of Natural Gas in a Carbon-Constrained World Natural Gas Prepays Taking the Leap to Natural Gas Vehicles The Pipeline Legislative Outlook Advertiser's Index Advertiser.com At Last

The Source - Winter 2008

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