POWER April 2021 - 20

NATURAL GAS
RMI estimated that a statewide ruling for
the 2022 code cycle, versus waiting until
the next code cycle in 2025, could save
California 3 million metric tons of carbon
emissions by 2030.
Bradford said BTU Analytics' forecast
of U.S. residential/commercial (res/com)
natural gas demand to 2050 is relatively
flat from current levels, at 21.6 billion cubic
feet per day (Bcf/d) in 2020. He said
that res/com gas demand " has been relatively
flat since 2010, bouncing around 20
and 23 Bcf/d depending on year-over-year
" In the U.S., the new Biden administration
... likely will give strong support
to further moves away from reliance
on gas-fired power generation. It is
too early to tell whether that support
will be matched by state-level regulatory
support and mandates, " said Steve
Davis, a partner with Akin Gump and
co-leader of the firm's energy team.
" Nonetheless, many of the largest oil
and gas companies, as well as the largest
car manufacturers, appear to be
voting strongly with their capital dollars
" Many of the largest oil and gas companies,
as well as the largest car manufacturers,
appear to be voting strongly with their
capital dollars that the trends toward
renewables and electrification are here
to stay and even accelerating. "
-Steve Davis, partner with Akin Gump
HDD [heating degree day] changes. "
He continued: " Going forward, there
are offsetting forces between new-build
res/com demand versus the combination
of tighter building codes, higher
efficiency
appliances, and the continued
demographic shift south and west.
BTU's forecast has falling res/com demand
from a peak in 2026 at 22.3 Bcf/d
down to 22.0 Bcf/d by 2050. From a regional
perspective, I would expect the
most traction on municipal regulation of
new-build gas burn to occur on the West
Coast and mid-Atlantic to New England
corridor, based on current municipal-level
climate action. "
The Texas Situation
The widespread power outages in Texas
caused by a severe winter storm highlighted
the shortcomings of a reliance on
natural gas, though energy experts said
proper winterization of equipment would
have helped avoid, or at least lessen, the
negative impacts. State data showed
that production of natural gas, and gasfired
power generation, each fell by
about a third in Texas during the period
of extreme cold. Energy analysts agreed
that the state's gas infrastructure and
power generation failed because it is not
designed to work in such conditions, unlike
the equipment in other areas where
cold temperatures are more common.
20
that the trends toward renewables and
electrification are here to stay and even
accelerating. It may be more regionally
focused, with states with significant oil
and gas-related facilities delaying mandates
for a significant period of time.
Still, the mid-February Texas weather
events and their fallout are too early,
and perhaps too potentially many and
material, to predict. "
" Wholesale energy markets were
designed and have been very effective
at selecting the lowest-cost generation
to meet reliability needs for over two
decades, " said Rumsey. " As gas prices
fluctuate, so will generation dispatch. "
He said that while environmental concerns
will bring more renewable energy
generation, " highly efficient, flexible
baseload generation will be needed to
balance the intermittency of renewables.
We have seen the challenges
of an overreliance on non-dispatchable
generation. The lowest-emitting, efficient,
and reliable technology available
to ensure reliability while facilitating
renewable growth is combined cycle
natural gas generation. "
Drilling Limits
Among the policy considerations for
natural gas is what impact new limits
on U.S. drilling from the Biden administration
will have on the sector. One of
www.powermag.com
the administration's first actions was to
temporarily suspend oil and gas permitting
on federal lands and waters.
" Fracking [hydraulic fracturing] is a
hot-button issue for this administration, "
Thomas Lorenzen, a partner with international
law firm Crowell & Moring, told
POWER. " Natural gas is increasingly
taking the place of coal. There may be
opportunities for the administration to
work with the gas production industry
to reduce methane leaks and reduce
methane emitted into the atmosphere.
We can expect to see more regulation
on methane emissions on public lands,
requiring the sector to fix leaks. "
" The impacts of the recent moves by
the Biden administration to limit drilling
on federal lands is nuanced, " Bradford
said, but he generally doesn't anticipate
a significant impact in the near-term.
" The president's decision to freeze new
drilling leases and permits on federal
lands is likely to impact New Mexico
the most, " as federal land accounts for
almost two-thirds of that state's natural
gas production. Bradford noted, though,
that " over the last two years producers
have slowly built up a significant backlog
in drilling permits that could sustain drilling
for over three years. "
Andrew Griffith, a senior consultant
for international consultancy ICF, told
POWER, " Restricting drilling on federal
lands will have a significant impact in
some regions, but the national impact
would be far less today compared to 10
years ago. In 2010, about 23% of the
country's natural gas production came
from federal lands. That proportion has
declined every year since, and it was
about 11% in 2019. Since 2019, some oil
and natural gas producers, anticipating
potential restrictions to drilling on federal
lands, began shifting their focus to
areas of the country where they could
drill on privately held land. "
Griffith continued: " Given this transition
of production away from federal
lands, the gradual nature that any new
restrictions on leasing of federal lands
likely would be implemented, and the
fact that the lowest-cost oil and natural
gas resources in the U.S. are not on
federal lands, the impact will not be an
immediate loss of 11% of natural gas
production. The Marcellus and Utica production
basins, for example, sit almost
entirely on privately held lands and likely
would make up a significant amount of
the difference in gas production. " ■
-Darrell Proctor is associate
editor for POWER.
POWER | April 2021
http://www.powermag.com
POWER April 2021

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