The effect of natural gas supply on U.S. renewable energy and CO2 emissions

Using expert assessments of U.S. natural gas supply, this paper examined the effect of different gas supplies on the future composition of the U.S. power sector and greenhouse gas (GHG) emissions. Results suggest abundant supplies of natural gas will do little to reduce GHG emissions, because inexpensive gas boosts electricity consumption and hinders expansion of cleaner energy sources such as wind and solar. This study was a collaboration between Near Zero and researchers at the University of California, Irvine, and Stanford University.

The increased use of natural gas has been proposed as a means for lowering U.S. greenhouse gas (GHG) emissions, as natural gas emits roughly half the carbon dioxide when used for electricity as coal. We combine expert elicitation and energy modeling to examine the effects of increased gas use on U.S. electricity and GHG emissions.

We asked natural gas experts for their estimates of natural gas supply curves – the total amount of natural gas available in the U.S. at different wellhead prices. Using the energy-economic model MARKAL, we then modeled the effect of varying natural gas supplies on the U.S. electricity mix, as well as the resulting greenhouse gas emissions. We also looked at four different scenarios for climate policies: no policy, a moderate carbon tax, a stringent cap on emissions, and a requirement of 50% renewable electricity by 2050.

We found that when natural gas supplies were higher, this led to less coal use — but also less renewable electricity use. This was true for the first three levels of climate policy: none, moderate, and stringent. Only the 50% renewable mandate resulted in similar amounts of renewable electricity use across gas supplies. Under no climate policy, high gas supply also increased overall electricity use, as it lowered power prices.

High natural gas supply did not significantly lower GHG emissions, as it delayed renewable electricity use.

Due primarily to the delay in renewable use, abundant gas had little effect on U.S. emissions (2013-2055). Abundant gas was most effective at reducing emissions under the 50% renewable mandate, which forced gas to compete more directly with coal, making cumulative emissions about 13% lower at a 1.5% leakage rate.

For the other three climate policies (none, moderate, and stringent) and assuming a methane gas leakage rate of 1.5%, high gas supply reduced emissions by at most 6% or increased them by 2%. Varying the methane gas leakage rate 0 to 3% did not substantially alter this result, reducing emissions by at most 9% or raising them by 5%.

In short, our results suggest the increased use of natural gas for electricity will not significantly lower GHG emissions, primarily because it delays renewable electricity use.

This paper was published in the peer-reviewed journal Environmental Research Letters.