Note: Synopsis drawn from report’s executive summary. Synopsis intended solely for purposes of generating discussion.
The Future of Natural Gas: An Interdisciplinary MIT Study
By the Massachusetts Institute of Technology Energy Initiative
Natural gas has moved to the center of the current debate on energy, security and climate. This study examines the role of natural gas in a carbon-constrained world, with a time horizon out to mid-century. The overarching conclusions are that:
- Abundant global natural gas resources imply greatly expanded natural gas use, with especially large growth in electricity generation.
- Natural gas will assume an increasing share of the U.S. energy mix over the next several decades, with the large unconventional resource playing a key role.
- The share of natural gas in the energy mix is likely to be even larger in the near to intermediate term in response to CO2 emissions constraints. In the longer term, however, very stringent emissions constraints would limit the role of all fossil fuels, including natural gas, unless capture and sequestration are competitive with other very low-carbon alternatives.
- The character of the global gas market could change dramatically over the coming decades.
1. To maximize the value to society of the substantial U.S. natural gas resource base, U.S. CO2 reduction policy should be designed to create a “level playing field,” where all energy technologies can compete against each other in an open marketplace conditioned by legislated CO2 emissions goals. A CO2 price for all fuels without long-term subsidies or other preferential policy treatment is the most effective way to achieve this result.
2. In the absence of such policy, interim energy policies should attempt to replicate as closely as possible the major consequences of a level-playing-field approach to carbon emissions reduction. At least for the near term, that would entail facilitating energy demand reduction and displacement of some coal generation with natural gas.
3. Notwithstanding the overall desirability of a level playing field, and in anticipation of a carbon emissions charge, support should be provided through RD&D and targeted subsidies of limited duration, for low-emission technologies that have the prospect of competing in the long run. This would include renewables, carbon capture and sequestration for both coal and gas generation, and nuclear power.
4. Coal generation displacement with NGCC generation should be pursued as a near-term option for reducing CO2 emissions.
5. In the event of a significant penetration of intermittent renewable electricity production, policy and regulatory measures should be developed (e.g. ancillary services compensation) or adapted (e.g. capacity mechanisms) to facilitate adequate levels of investment in natural gas generation capacity.
6. Regulatory and policy barriers to the development of natural gas as a transportation fuel (both CNG and natural gas conversion to liquid fuels) should be removed, so as to allow it to compete with other technologies. This would reduce oil dependence, and CNG would reduce carbon emissions as well.
7. For reasons of both economy and global security, the U.S. should pursue policies that encourage an efficient integrated global gas market with transparency and diversity of supply, and governed by economic considerations.
8. Since natural gas issues will appear more frequently on the U.S. energy and security agenda as global demand and international trade grow, a number of domestic and foreign policy measures should be taken, including:
- Integrating energy issues fully into the conduct of U.S. foreign policy, which will require multiagency coordination with leadership from the Executive Office of the President;
- Supporting the efforts of the International Energy Agency (IEA) to place more attention on natural gas and to incorporate the large emerging markets (such as China, India and Brazil) into the IEA process as integral participants;
- Sharing know-how for the strategic expansion of unconventional resources;
- Advancing infrastructure physical- and cyber-security as the global gas delivery system becomes more extended and interconnected; and
- Promoting efficient use of natural gas domestically and encouraging subsidy reduction for domestic use in producing countries.
9. There is a legitimate public interest in ensuring the optimum, environmentally sound utilization of the unconventional gas resource. To this end:
- Government-supported research on the fundamental challenges of unconventional gas development, particularly shale gas, should be greatly increased in scope and scale. In particular, support should be put in place for a comprehensive and integrated research program to build a system-wide understanding of all subsurface aspects of the U.S. shale resource. In addition, research should be pursued to reduce water usage in fracturing and to develop cost-effective water recycling technology.
- The United States Geological Survey (USGS) should accelerate efforts to improve resource assessment methodology for unconventional resources.
- A concerted coordinated effort by industry and government, both state and Federal, should be organized so as to minimize the environmental impacts of shale gas development through both research and regulation. Transparency is key, both for fracturing operations and for water management. Better communication of oil- and gas-field best practices should be facilitated. Integrated regional water usage and disposal plans and disclosure of hydraulic fracture fluid components should be required.
10. The Administration and Congress should support RD&D focused on environmentally responsible, domestic natural gas supply, through both a renewed Department of Energy (DOE) program weighted towards basic research and a synergistic “off-budget” industry-led program weighted toward technology development and demonstration and technology transfer with relatively shorter-term impact. Consideration should also be given to restoring a public-private “off-budget” RD&D program for natural gas transportation and end use.
Any discussion of natural gas should include its global warming effect and the fact that each molecule of methane is equal to 25-50 molecules of CO2 in terms of global… Read more »
Emissions from production in the US, including distribution losses, are less than 3% of total CO2 equivalent (not CO2 but CO2e) of total emissions from the gas sector including combustion.… Read more »
The MIT gas study on page 50 discusses compressed natural gas as a transport fuel. Based on various briefings it appears that there are a bunch of regulatory and other… Read more »
Thanks, Charles. Good information. I wonder how much of the lower European retrofit cost is due to the generally smaller vehicle sizes there—so that the US-Europe numbers may not be… Read more »
I don’t think the difference in retrofit prices in the US compared to Europe have anything to do with vehicle size.