Maersk Line CEO calls for major changes in shipping industry; reliability, ease of business, environmental excellence
Leclanché and Schüco cooperate for Lithium-ion solar energy storage solutions

Separate MIT, IEA reports both outline major expansion in role of natural gas; caution on climate benefits

World primary energy demand by fuel in the IEA high gas scenario. Source: IEA. Click to enlarge.

Given the abundance of natural gas available through large global resources and the recent emergence of substantial unconventional supplies in the United States, worldwide usage of the fuel is likely to continue to grow considerably and contribute to significant reductions of greenhouse gas emissions for decades to come, according to a multidisciplinary 3-year study by MIT researchers.

Separately, the International Energy Agency (IEA) released its own report exploring the potential for a “golden age” of gas. The new report, part of the World Energy Outlook (WEO) 2011 series, examines the key factors that could result in a more prominent role for natural gas in the global energy mix, and the implications for other fuels, energy security and climate change.

Both reports also emphasized that although natural gas is the lowest carbon fossil fuel, it is still a fossil fuel. Speaking at the launch of the IEA report in London, IEA Executive Director Nobuo Tanaka said that “An expansion of gas use alone is no panacea for climate change.” The MIT report said that natural gas should be seen as a “bridge” to a low-carbon regime, rather than as the ultimate long-term solution itself.

Change in cumulative energy-related CO2 emissions by sector and fuel in the IEA GAS Scenario relative to the New Policies Scenario, 2009-2035. Source: IEA. Click to enlarge.

MIT: The Future of Natural Gas. An interim report with some of this study’s major findings and recommendations was released in June 2010. (Earlier post.) The full report, including additional data and extensive new analysis, was released by MITEI this week.

The study—managed by the MIT Energy Initiative (MITEI) and carried out by a team of Institute faculty, staff and graduate students—examined the scale of US natural gas resources and the potential of this fuel to reduce greenhouse gas emissions. Based on the work of the multidisciplinary team, with advice from a board of 18 leaders from industry, government and environmental groups, the report examined the future of natural gas through 2050 from the perspectives of technology, economics, politics, national security and the environment.

High-level findings of the MIT study include:

  1. There are abundant supplies of natural gas in the world, and many of these supplies can be developed and produced at relatively low cost. In the US, despite their relative maturity, natural gas resources continue to grow, and the development of low-cost and abundant unconventional natural gas resources, particularly shale gas, has a material impact on future availability and price.

  2. Unlike other fossil fuels, natural gas plays a major role in most sectors of the modern economy—power generation, industrial, commercial and residential. It is clean and flexible. The role of natural gas in the world is likely to continue to expand under almost all circumstances, as a result of its availability, its utility and its comparatively low cost.

  3. In a carbon-constrained economy, the relative importance of natural gas is likely to increase even further, as it is one of the most cost-effective means by which to maintain energy supplies while reducing CO2 emissions. This is particularly true in the electric power sector, where, in the US, natural gas sets the cost benchmark against which other clean power sources must compete to remove the marginal ton of CO2.

  4. In the US, a combination of demand reduction and displacement of coal-fired power by gas-fired generation is the lowest cost way to reduce CO2 emissions by up to 50%. For more stringent CO2 emissions reductions, further de-carbonization of the energy sector will be required; but natural gas provides a cost-effective bridge to such a low-carbon future.

  5. Increased utilization of existing natural gas combined cycle (NGCC) power plants provides a relatively, low-cost short-term opportunity to reduce US CO2 emissions by up to 20% in the electric power sector, or 8% overall, with minimal additional capital investment in generation and no new technology requirements.

  6. Natural gas-fired power capacity will play an increasingly important role in providing backup to growing supplies of intermittent renewable energy, in the absence of a breakthrough that provides affordable utility-scale storage. But in most cases, increases in renewable power generation will be at the expense of natural gas-fired power generation in the US

    (However, the report also finds that natural gas will also play a central role in integrating more intermittent renewable sources—wind and solar—into the electricity system because they can easily be brought in and out of service as needed.)

  7. The current supply outlook for natural gas will contribute to greater competitiveness of US manufacturing, while the use of more efficient technologies could offset increases in demand and provide cost effective compliance with emerging environmental requirements.

  8. Transformation of the current approach to appliance standards to one based on full fuel cycle analysis will enable better comparison of different energy supply options in commercial and residential applications.

  9. Natural gas use in the transportation sector is likely to increase, with the primary benefit being reduced oil dependence. Compressed natural gas (CNG) will play a role, particularly for high-mileage fleets, but the advantages of liquid fuel in transportation suggest that the chemical conversion of gas into some form of liquid fuel may be the best pathway to significant market penetration.

  10. International gas trade continues to grow in scope and scale, but its economic, security and political significance is not yet adequately recognized as an important focus for US energy concerns.

  11. Past research, development, demonstration and deployment (RDD&D) programs supported with public funding have led to significant advances for natural gas supply and use.

The study’s economic analysis of the effects of a national policy calling for a 50% reduction in greenhouse gas emissions shows there would be a substantial substitution of natural gas for coal in electricity generation. However, in order to achieve even greater reductions in carbon emissions, natural gas will in turn need to make way for other low- or zero-carbon sources of energy. It is in this sense that natural gas may be seen as a “bridge” rather than as the ultimate long-term solution itself.

Concerns have been raised about the possible environmental effects of developing shale gas using fracking (hydro-fracturing), which involves injecting fluids into deep horizontal wells under pressure. The ultimate disposal of those fluids after they are pumped back out, or the possibility that they could contaminate water supplies, have been the subject of lawsuits and legislative attempts to limit the practice. The study found that “the environmental impacts of shale development are challenging but manageable.” The report says some cases of the gas entering freshwater tables were “most likely the result of substandard well-completion practices by a few operators.

The study recommends that to address these concerns, “it is essential that both large and small companies follow industry best practices; that water supply and disposal are coordinated on a regional basis and that improved methods are developed for recycling of returned fracture liquids.” Government funding for research on such systems should be “greatly increased in scope and scale,” the report says.

The report includes a set of specific proposals for legislative and regulatory policies, as well as recommendations for actions that the energy industry can pursue on its own, to maximize the fuel’s impact on mitigating greenhouse gas. The major recommendations include:

  1. Government-supported research on the fundamental challenges of unconventional natural 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 US shale resource. In addition, research should be pursued to reduce water usage in fracturing and to develop cost-effective water recycling technology.

  2. 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.

  3. The US should support unconventional natural gas development outside US, particularly in Europe and China, as a means of diversifying the natural gas supply base.

  4. The US government should continue to sponsor methane hydrate research, with a particular emphasis on the demonstration of production feasibility and economics.

  5. To maximize the value to society of the substantial US natural gas resource base, US 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.

  6. 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.

  7. Natural gas can make an important contribution to GHG reduction in coming decades, but investment in low-emission technologies, such as nuclear, CCS and renewables, should be actively pursued to ensure that a mitigation regime can be sustained in the longer term.

  8. The displacement of coal generation with NGCC generation should be pursued as the most practical near-term option for significantly reducing CO 2 emissions from power generation.

  9. In the event of a significant penetration of intermittent renewable production in the generation technology mix, policy and regulatory measures should be developed to facilitate adequate levels of investment in natural gas generation capacity to ensure system reliability and efficiency

  10. Improved energy efficiency metrics, which allow consumers to accurately compare direct fuel and electricity end uses on a full fuel cycle basis, should be developed. Over time, these metrics should be tailored to account for geographical variations in the sources of electric power supply and local climate conditions.

  11. The US government should consider revision to its policies related to CNG vehicles, including how aftermarket CNG conversions are certified, with a view to reducing up-front costs and facilitating CNG-gasoline capacity.

  12. The US government should implement an open fuel standard that requires automobile manufacturers to provide tri-flex fuel (gasoline, ethanol and methanol) operation in light-duty vehicles. Support for methanol fueling infrastructure should also be considered.

  13. Analysis of the infrastructure demands associated with potential shift from coal to gas-fired power should be undertaken. Pipeline safety technologies should be included in natural gas RD&D programs.

  14. The EPA and the US Department of Energy (DOE) should co-lead a new effort to review, and update as appropriate, the methane emission factors associated with natural gas production, transmission, storage and distribution. The review should have broad-based stakeholder involvement and should seek to reach a consensus on the appropriate methodology for estimating methane emissions rates. The analysis should, to the extent possible: (a) reflect actual emissions measurements; (b) address fugitive emissions for coal and oil as well as natural gas; and (c) reflect the potential for cost-effective actions to prevent fugitive emissions and venting of methane.

  15. The US should pursue policies that encourage the development of an efficient and integrated global gas market with transparency and diversity of supply.

  16. Natural gas issues should be fully integrated into the US energy and security agenda, and a number of domestic and foreign policy measure should be taken, including:
    • integrating energy issues fully into the conduct of US 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; and
    • advancing infrastructure physical- and cyber-security as the global gas delivery system becomes more extended and interconnected.

  17. The Administration and Congress should support RD&D focused on environmentally responsible domestic natural gas supply. This should entail both a renewed DOE program, weighted towards basic research, and a complementary industry-led program, weighted towards applied research, development and demonstration, that is funded through an assured funding stream tied to energy production, delivery and use. The scope of the program should be broad, from supply to end-use.

  18. 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.

Given an appropriate regulatory environment, which seeks to place all lower carbon energy sources on a level competitive playing field, domestic supplies of natural gas can play a very significant role in reducing US CO2 emissions, particularly in the electric power sector. This lowest cost strategy of CO2 reduction allows time for the continued development of more cost-effective low or zero carbon energy technology for the longer term, when gas itself is no longer sufficiently low carbon to meet more stringent CO2 reduction targets.

The newly realized abundance of low cost gas provides an enormous potential benefit to the nation, providing a cost effective bridge to a secure and low carbon future. It is critical that the additional time created by this new resource is spent wisely, in creating lower cost technology options for the longer term, and thereby ensuring that the natural gas bridge has a safe landing place in a low carbon future.

—The Future of Natural Gas

IEA: Are We Entering a Golden Age of Gas? The IEA report presents a scenario in which global use of gas rises by more than 50% from 2010 levels and accounts for more than a quarter of global energy demand by 2035. However, the report also strikes a cautious note on the climate benefits of such an expansion, noting that an increased share of gas in the global energy mix is far from enough on its own to put the world on a carbon emissions path consistent with a global temperature rise of no more than 2 °C.

Recent developments have created considerable opportunities for greater future use of natural gas globally, depending on the interaction between economic and environmental factors and policy interventions in the market. This report presents an illustrative “high gas scenario”—the Golden Age of Gas Scenario—which incorporates a combination of new factors that could support a more positive future outlook for gas. These include ample availability of gas (much of it unconventional), which lowers average gas prices, implementation by China of an ambitious policy for gas use, lower growth of nuclear power and more use of natural gas in road-transport.

In the scenario, China’s natural gas demand alone rises from about the level of Germany in 2010 to match that of the entire EU in 2035. To meet the growth in demand, by 2035 annual gas production must increase by 1.8 tcm, about three times the current production of Russia. Conventional natural gas will continue to make up the greater part of global production, but unconventional gas becomes increasingly important, meeting more than 40% of the increase in demand.

Global natural gas resources are vast, widely dispersed geographically and can help improve energy security. All major geographical regions have recoverable natural gas resources equal to at least 75 years of current consumption. However, timely and successful development of these resources depends on a complex set of factors, including government policy choices, technological capability and market conditions.

Unconventional gas resources are now estimated to be as large as conventional resources, but their production outlook is uncertain as the use of hydraulic fracturing to produce unconventional gas has raised environmental concerns and tested existing regulatory regimes, the report notes. Like the MIT report, the IEA report notes that adhering to best practices in production can mitigate potential environmental risks, such as excessive water use, contamination and disposal. Based on available data, the report estimates that shale gas, produced to proper standards of environmental responsibility, has 3.5% higher “well-to-burner” emissions than conventional gas.

Natural gas is a particularly attractive fuel for countries and regions that are urbanizing and seeking to satisfy rapid growth in energy demand, such as China, India and the Middle East. These countries and regions will largely determine the extent to which natural gas use expands over the next 25 years. When replacing other fossil fuels, natural gas can lead to lower emissions of greenhouse gases and local pollutants.

However, the high gas scenario shows carbon emissions consistent with a long-term temperature rise of over 3.5°C. A path towards 2°C would still require a greater shift to low-carbon energy sources, increased energy efficiency and deployment of new technologies including carbon capture and storage (CCS), which could reduce emissions from gas-fired plants.




More proof that we are far from peak oil.


If you are going to switch from coal to gas for electricity generation, you might as well add as much wind as you can - the gas can balance it out.
(or solar, if you have the right climate).
The question then is how to use gas for transportation - do you convert it to liquid form, or just use it compressed or liquefied ?
If batteries improve we can move further along the path to full EVs, but even if we get to hybridization, or small battery PHEVs, we could save quite a bit of fuel.


"The analysis should, to the extent possible: (a) reflect actual emissions measurements; (b) address fugitive emissions for coal and oil as well as natural gas; and (c) reflect the potential for cost-effective actions to prevent fugitive emissions and venting of methane."

One must wonder how much of this is simply make-work. Since all vented methane from man-made sources is vastly LESS than that vented naturally via volcanic / magmatic activity on land and undersea.

Both the IEA and MIT studies are an import step in adopting NG as the bridge fuel from coal and oil to near zero carbon energy sources. Renewables should continue to expand, however with ever greater care to enviro impact on land / water use.

The evolution not mentioned in either study is the eventual replacement of NG with low cost H2. The path for this transition will become clearer as technology is introduced that facilitates extremely low cost high efficiency electrolysis.

All in all, these reports represent a valuable guide to realigning energy production with domestic resources. Added benefits to domestic NG production in all industrial nations is the positive impact on JOBS and economies. Building out the NG infrastructure will employ hundreds of thousands around the world.

All the while reducing the number of new coal-fired plants - especially in India and China where particulate air pollution kills up to a million people annually.


Natural gas with gasified biomass can help in many ways. The natural gas increases the yield per ton of biomass and the carbon is more CO2 neutral.


According to BP, the known crude oil reserves will meet demands (at current level) for another 47+ years.

New oil discoveries, non-conventional sources, production of more ethanol and bio-fuels, the progressive introduction of electrified vehicles, machinery, trains and the introduction of more efficient HVAC and lights, the progressive switch to Solar and Wind power sources etc., could make crude oil reserves last 100+ more years.

Sustained higher crude oil price could also help to make it last longer.


WE (the world) may have 40 years of oil at projected consumption, but over half of it is in the middle east and they are not giving it away.


The middle east oil monarchies raised their claimed reserves by large amounts during the 80's OPEC quota wars, and haven't subtracted their production from them since. It's certain that their actual reserves are far less than they claim, else they would allow outside auditors to verify their figures.


As for GHG benefits of NGVs and energy security, electric traction is the answer. NG can be converted to electricity with 60+% effciency, and EVs are not dependent on NG should supplies turn out to be less than forecast (or the NG is needed elsewhere).


Saudi Arabia has discovered huge under sea deposits. Israel has huge shale oil deposits to be exploited soon. More under sea oil deposits will be discovered and exploited soon if the selling price is high enough.

More of that stuff does not meant that we should stop developing electrified vehicles. They are the future.

The comments to this entry are closed.