The Role of Natural Gas in Decarbonizing the U.S. Energy and Industrial Economy
Total Page：16
File Type：pdf, Size：1020Kb
CENTER FOR CLIMATE AND ENERGY SOLUTIONS ENERGY AND FOR CLIMATE CENTER U.S. POLICY The Role Of Natural Gas Of De-Carbonizing In The Natural Role Energy The U.S. Economy Industrial and THE ROLE OF NATURAL GAS IN DECARBONIZING THE U.S. ENERGY AND INDUSTRIAL ECONOMY by Jeffrey Brown University of Wyoming Stanford University July 2021 THE ROLE OF NATURAL GAS IN DECARBONIZING THE U.S. ENERGY AND INDUSTRIAL ECONOMY by Jeffrey Brown University of Wyoming Stanford University June 2021 The Role Of Natural Gas In De-Carbonizing The U.S. Energy and Industrial Economy i CONTENTS I. INTRODUCTION AND CONTEXT 1 Summary of Blocks of Decarbonization 3 Fuel Switching—Block 2 5 Carbon Capture at the Emitting Facilities in Power and Industry—Block 3 and Block 4 5 Decarbonized Fuels—Block 5 6 Framing the Stages in Terms of Carbon Intensity 6 Tasks Beyond the Scope of this Paper 7 Organization of the Analysis 7 II. WHERE WE HAVE BEEN: RECENT POWER SECTOR EMISSIONS REDUCTIONS DRIVEN BY NATURAL GAS 9 Last Two Decades: More Electricity and Lower Emissions 9 Causes of Power Sector Emissions Reductions 2000–2018 10 III. CURRENT U.S. EMISSIONS, WITH FOCUS ON NATURAL GAS 13 Tracking Natural Gas Emissions in U.S. Government Data 13 Process Use of Natural Gas 13 Industrial Heating Use of Natural Gas 14 U.S. Stationary Source Carbon Dioxide Emissions 14 IV. NATURAL GAS IS NOT DISAPPEARING SOON 17 IEA and IPCC Projections of Global Fossil Fuel Use, with Focus on U.S. Natural Gas 18 V. BLOCK 1: RENEWABLE PENETRATION REDUCES FOSSIL GENERATION 21 Block 1: Renewable Penetration Impact on Fossil Fuels in the Electric Sector 21 Why is it so likely that significant fossil-fired electric generation remains? 22 VI. BLOCK 2: COAL-TO-GAS FUEL SWITCHING IN THE POWER SECTOR 25 VII. BLOCK 3: DEPLOYING CARBON CAPTURE ON REMAINING GAS (AND COAL) PLANTS 27 How Much Does Power Sector Carbon Capture Cost? 27 Estimated Emissions Reduction Impact of Carbon Capture for the Power System 28 VIII. BLOCK 4: DEPLOYING CARBON CAPTURE FOR INDUSTRIAL PROCESS EMISSIONS 31 Industrial Process Emissions Related to Natural Gas Feedstock and Gas Processing 31 Impact of Capturing Carbon Dioxide from Industrial Processes 32 ii Center for Climate and Energy Solutions IX. BLOCK 5: ADDRESSING INDUSTRIAL COMBUSTION EMISSIONS WITH DECARBONIZED FUELS 35 The Heterogenous Landscape of Industrial Combustion Emissions 35 Industrial Heating Applications for Decarbonized Fuels 36 Quantification of Emissions Reductions from Decarbonized Fuels Use 37 Decarbonized Fuel May Also be a Power Sector Alternative 39 X. CONCLUSIONS 41 APPENDIX A: LIST OF ABBREVIATIONS AND KEY TERMS 43 APPENDIX B: COAL-TO-GAS FUEL SWITCHING AND COST OF AVOIDED CARBON DIOXIDE 45 ENDNOTES 47 The Role Of Natural Gas In De-Carbonizing The U.S. Energy and Industrial Economy iii iv Center for Climate and Energy Solutions I. INTRODUCTION AND CONTEXT What role might natural gas play in deep issues, that nuclear plant could provide round-the-clock decarbonization? Some think natural gas should play baseload energy. Further, if accompanied by co-located no role at all, while others think we can continue to use plants to make hydrogen from electrolysis of water, natural gas in the future as we have in the past. In fact, hydrogen storage, and banks of hydrogen fuel cells, we need a third, or middle path, in which we steadily excess nuclear energy could be stored and released to reduce our reliance on natural gas while simultaneously, meet daily and peak energy demands. Fine. However, the and radically, improving natural gas’ environmental above-described situation does not now exist. What are performance. This paper lays out in detail what that we going to do today? middle path looks like. The Center for Climate and C2ES’s “Getting to Zero: A U.S. Climate Agenda” (GTZ) Energy Solutions (C2ES) has addressed policy specifics and “Climate Priorities for the New Administration and elsewhere, whereas this paper is focused on the Congress” outline the policy recommendations that are feasibility of and emissions reduction from various necessary to pave the path for decarbonizing the power decarbonization strategies. and industrial sectors. The need for carbon pricing or The techno-economic approach taken in this paper Clean Energy Standards to include a broad selection is grounded in a view that there is a climate crisis today, of technologies as well as needed infrastructure are and the climate crisis will be worse tomorrow unless we discussed in the GTZ report. take immediate action. As with an accident victim, we The focus of the paper is on the potential quantity need to apply first aid, we need to repair the injury at the and cost of carbon abatement strategies that are hospital, and then we will need to start rehabilitation. technologically available now and are practical to We urgently need to use current technology to implement today. Those immediately available strategies minimize emissions: the first aid. We also rapidly build the middle path for natural gas.1 need to develop better energy technologies to replace We consider the issues of practicality and policy today’s energy technologies: the hospital. We will then separately: the fact that a technology is highly practical need to implement negative emissions technologies— and cost-effective from an economic and engineering likely to be very expensive—to remedy the excessive point of view is not, by itself, sufficient to cause the carbon accumulations caused by the world’s delays and technology to be deployed in the real world: in many dithering: the rehab. cases there are legal barriers or lack of enabling policies This paper is really about the role natural gas can that block technologies that otherwise would be adopted play in applying first aid. How can our massive current quickly.2 production of natural gas, processing and pipeline This middle path for natural gas is but one infrastructure, and gas power plant and petrochemical component of a multi-technology strategy that supports manufacturing facilities be leveraged to reduce penetration of all zero-emitting and low-emitting energy emissions in parallel with the development of more technologies on the way to a zero-emissions future. A elegant solutions? As we race to invent and deploy radical major theme of this paper is that immediate action to technological improvements, we have an imperative to decarbonize use of natural gas today can support other try to leverage, mitigate, and repurpose today’s assets to low- and zero- carbon technologies—in the future: stabilize the patient. Tomorrow’s perfect does not need • Today: Decarbonized natural gas power plants— to be the enemy of today’s good. with carbon capture— can back up wind, solar To illustrate the point, if we had today a nuclear photovoltaic (PV) and other intermittent zero- power plant technology that was widely accepted as safe carbon electricity producers, especially to meet day- and scalable, accompanied by a solution to waste disposal to-night and seasonal production and consumption The Role Of Natural Gas In De-Carbonizing The U.S. Energy and Industrial Economy 1 mismatches. Thus, such decarbonized natural the proposed Clean Power Plan (CPP). In the CPP, gas power plants can permit a swifter and deeper EPA calculated cumulative Carbon dioxide reductions as penetration of renewables into the power grid states moved through various “Building Blocks” (BBs).8 without loss of system reliability.3 EPA’s BBs were: • The future: Low-carbon “blue hydrogen” can • BB1–2.3 percent reduction of fossil heat rate build scale and infrastructure that can ultimately • BB2–raising average capacity factor of NGCCs to be used by zero-carbon “green hydrogen.” While 75 percent. all hydrogen is zero-carbon when burned, the • BB3–approximately 21 percent pro rata reduction manufacturing of that “zero carbon fuel” may or in fossil steam and NGCC emissions through use may not emit greenhouse gas. of renewables Today’s hydrogen production is nearly all “grey EPA’s stepwise set of calculations allowed analysts to hydrogen.” It is generally made by the refining drill down on the practicality of the actions hypothesized process known as cracking natural gas in in each Building Block. We took the same approach steam methane reforming (SMR) plants for the same reason. As with EPA’s Building Blocks, that emit 100 percent the methane feedstock’s we assume no strict chronology of implementation: in carbon as carbon dioxide (CO ).4 About 10kg 2 practice our “Blocks” are likely to overlap or even go out of carbon dioxide is emitted per 1kg of hydrogen of order. That said, we numbered our Blocks so those (H ) product.5 2 with large and inexpensive strategies had lower numbers The term “blue hydrogen” refers to H2 than those with smaller, more expensive strategies. manufactured at plants where carbon The magnitudes of abated carbon dioxide tonnage capture equipment has been added to grey calculated from each Block are generally consistent with hydrogen SMRs. well-known analyses such as those of the International “Green hydrogen” refers to H2 made by Energy Agency (IEA), International Panel on Climate electrolyzing water with electricity made from Change (IPCC), and those used in EPA’s technical zero carbon power generation. support documents for the CPP. For instance, we begin Either blue or green hydrogen manufacture is much the entire analysis postulating a 400 percent increase in less greenhouse gas-emitting than conventional H2 installed capacity (i.e., MW—not MWh of generation) production. However, given current equipment and of wind and solar PV. In reality, that change is likely feedstock costs, green hydrogen is 3-5 times the cost of to occur simultaneously with many other abatement 6 grey hydrogen.