From the Harvard School of Engineering and Applied Sciences
Reduction in U.S. carbon emissions attributed to cheaper natural gas
Lower emission from power plants in 2009 was driven by competitive pricing of natural gas versus coal
Cambridge, Mass. – February 27, 2012 – In 2009, when the United States fell into economic recession, greenhouse gas emissions also fell, by 6.59 percent relative to 2008.
In the power sector, however, the recession was not the main cause.
Researchers at the Harvard School of Engineering and Applied Sciences (SEAS) have shown that the primary explanation for the reduction in CO2 emissions from power generation that year was that a decrease in the price of natural gas reduced the industry’s reliance on coal.
According to their econometric model, emissions could be cut further by the introduction of a carbon tax, with negligible impact on the price of electricity for consumers.
A regional analysis, assessing the long-term implications for energy investment and policy, appears in the journal Environmental Science and Technology.
In the United States, the power sector is responsible for 40 percent of all carbon emissions. In 2009, CO2 emissions from power generation dropped by 8.76 percent. The researchers attribute that change to the new abundance of cheap natural gas.
“Generating 1 kilowatt-hour of electricity from coal releases twice as much CO2 to the atmosphere as generating the same amount from natural gas, so a slight shift in the relative prices of coal and natural gas can result in a sharp drop in carbon emissions,” explains Michael B. McElroy, Gilbert Butler Professor of Environmental Studies at SEAS, who led the study.
“That’s what we saw in 2009,” he says, “and we may well see it again.”
Patterns of electricity generation, use, and pricing vary widely across the United States. In parts of the Midwest, for instance, almost half of the available power plants (by capacity) were built to process coal. Electricity production can only switch over to natural gas to the extent that gas-fired plants are available to meet the demand. By contrast, the Pacific states and New England barely rely on coal, so price differences there might make less of an impact.
To account for the many variables, McElroy and his colleagues at SEAS developed a model that considers nine regions separately.
Their model identifies the relationship between the cost of electricity generation from coal and gas and the fraction of electricity generated from coal.
“When the natural gas prices are high, as they were 4 years ago, if the gas prices come down a little bit, it doesn’t make any difference,” explains lead author Xi Lu, a postdoctoral associate at SEAS. “But there’s a critical price level where the gas systems become more cost-effective than the oldest coal-fired systems.
“If the gas price continues to drop, you’ll continue to go down this curve so that you’ll knock out not just the really ancient coal-fired power plants, but maybe some of the more recent coal-fired plants.”
The model also predicts that a government-imposed carbon tax on emissions from power generation would drive a move away from coal.
“With a relatively modest carbon tax—about $5 per ton of CO2—you could save 31 million tons of CO2 in the United States, and that would change the price of electricity by a barely noticeable amount,” says McElroy.
The initial model was developed by Jackson Salovaara ’11, an applied mathematics concentrator at SEAS. His work was recognized as the “best senior thesis” in the Harvard Environmental Economics Program, earning him the Stone Prize in May 2011.
Since then, the model has been “souped up,” incorporating more sophisticated regional data analysis, and producing not just the findings on 2009 but also predictions for more recent years.
“While the data from 2011 are not yet available, based on the gas prices, we’re making a confident prediction that there should be a continued shift from coal to natural gas in 2011 as compared to 2008,” says McElroy.
“That’s good news for the atmosphere.”
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This research was supported by the National Science Foundation.
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Start building natural gas and LPG powered vehicles.
The USA already has a quarter million NG/LPG vehicles, but other countries are far ahead, such as Brazil, Argentina, and interestingly Iran with 2 million+ vehicles.
NG vehicles are both less polluting and safer than petrol vehicles.
I see a “souped up” model was used to get these results.
I doubt if there has been a shift from coal fired to natural gas fired boilers that provide the steam for electric power generation. Shifting the fuel supply takes planning, time and money. So I doubt if the study can list the power plants that have Been converted.
Babcock & Wilcox, the boiler manufacturer, has a white paper discussing some of the factors to consider at:
http://www.babcock.com/library/pdf/MS-14.pdf
One the factors B&W says to consider is “impact of future changes in fuel prices and the
potential risk associated with natural gas price volatility”
A colleague of mine once did a study for the American Gas Association (AGA) and came to the conclusion that natural gas supply depended on price- not the other way around. This is because if the price is too low, the gas is simply left in the ground. It will still be there when the price goes back up(of course, he was asked not to put that in his report).
Another factor B&W says to consider: “ amount of acceptable de-rate “ In other words you are going to get less power when switching to natural gas.
So a US Government agency, ‘supports’ the research, including recommendation of a carbon-tax. I am completely suprised as are all of you I’m sure. I do enjoy the first point made about the redux in “carbon” with the caveat they don’t use coal all that much. How accurate is any of these ‘measurments’ really? Well off I go to my Church of Cynicism; or is it just Honesty.
and as for LNP automobiles, try methanol, I’m sure Soros and T. Boone will still get rich(er).
I note that whatever the finding, the solution is ALWAYS the same…introduce a tax to increase the power of central government and drive up the price of EVERYTHING. What is it about watermelon solutions that always wind up with a big government bureaucracy and a diminution of personal liberties?! It was the solution to “Global Cooling”, it has been the solution for “Global Warming”, “Anthropogenic Global Warming” (Catastrophic or not) “Global Climate Disruption” (whatever that is!) “Hang Nails” and “Split Ends”. Really! They need to find a new solution (preferably one that doesn’t involve killing half the people on the planet!)
old engineer says: February 27, 2012 at 8:02 pm
I doubt if there has been a shift from coal fired to natural gas fired boilers that provide the steam for electric power generation. Shifting the fuel supply takes planning, time and money. So I doubt if the study can list the power plants that have Been converted.
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The switch from coal to gas doesn’t necessarily mean converting currently existing plants. Coal burners are typically Rankine cycle operations with boilers optimized for the fuel (as you say). There are a lot of new gas plants that are Brayton cycle machines, sometimes using additional Rankine cycle (combined cycle) hardware to increase overall efficiency. These are easy to get permitted and cheap to install. They’re based on redesigned airliner jet engines driving alternators instead of bypass fans. Coal is cheap per KWh generated; NG plants are cheap to buy, but with higher cost to fuel.
I don’t know of any power plants recently converted from coal to NG, but the Morro Bay plant in California was converted from burning oil to NG about 1995.
@ur momisugly Philip Bradley
I drove a natural gas powered van (car pool) for 8 years. No complaints about its power. Big, big complaint that I had to fill the tank every other day as I could only go about 120 miles on a full tank (52 mile round trip/day). It also takes considerably longer to fill a NatGas tank than a gasoline tank. So it essentially extended my awful commute time even further. The other issue was finding a filling station. My employer had one on campus, so that helped, but otherwise there were no filling stations between my start and end point; and this was in Los Angeles! So if we should move to all NatGas/LPG for cars, understand that the support infrastructure needs a lot of work.
If my experience is typical, then I think you will see a fair amount of resistance to going with NatGas/LPG for cars. I was fine with driving a provided NatGas vehicle, but I wouldn’t buy one.
Unemployed people don’t have enough money to buy gas, don’t need to to drive to work, and don’t go shopping as much.
California has been losing jobs and citizens at a very large rate. We used to fab a lot of silicon (energy intensive) and that’s all pretty much gone now. Car company shut down (used to make Fords in Fremont / MIlpitas area, now even NUMI is down). Aerospace packed up and left. Even popular gadgets like iPods and iPhones are now made in China (where the old Apple II was made here)
Basically, IMHO, it’s the the ongoing slide into depression, unemployment, and poverty of the Green Utopia of The Liberal Left Coast…
Note that Texas shows the lowest drop. They have added a lot of citizens escaping from the other areas and added businesses (even if Obama killed offshore oil drilling and has stifled new refining of Canadian Oil…)
I’d also speculate that the massive drops in the Rust Belt States relates directly to the massive shipping of their jobs to China too…
I’d not be crowing over that chart, were I them. China is building new coal plants at a prodigious rate (1 a week or so) as their economy is growing very fast (at least until recently when we became poor enough to slow down buying their trinkets…)
Oh, and The Feds shut off water to a large chunk of the area toward Fresno / Kern to ‘save the delta smelt’ (a trivial bait fish not significantly different from all the other smelt that are out competing it…) putting a lot of farm equipment in the barn and a lot of folks out of work and a lot of food processing equipment turned off and…
Hey, ‘every little bit of poverty helps’ /sarcoff>
Oh, probably ought to add the death of the local housing industry and all the Mexican home builders leaving…
old engineer says:
February 27, 2012 at 8:02 pm
You don’t need to build new plants. There’s always some excess capacity built into the system. To handle outages for maintenance or acts of nature. So it’s possible to ramp up production at gas powered plants, and ramp down production elsewhere.
Declining or increasing atmospheric levels of CO2 are meaningless. CO2 emissions are simply a means to double tax hydrocarbons oxidized to perform work. It is a disgrace that semi-intelligent people have fallen for carbon dioxide as climate controller. Never forget our governments (Federal, state, municipal etc.) decide how much they want to spend, then institute tax policy to TAKE the money from you and me.
If you believe this statement: “According to their econometric model, emissions could be cut further by the introduction of a carbon tax, with negligible impact on the price of electricity for
consumers.” your intelligence quotient may be much lower than you believe…………………
Uzi
I wish federal government would simply remove CO2 (aka plant food) from the equation when establishing their energy policy.
Better yet, I wish the federal govt would get out of the economy entirely and shutdown the Dept of Energy and the EPA. State governments are more than capable of setting their own pollution standards that meet the unique economic, social, and environmental priorities of their citizens.
The federal government manipulating energy policy to serve the needs of special interest groups is destroying our energy independence, stifling energy innovation and development, drives up costs and drives me crazy.
As a side note, I’m getting sick and tired of politicians and news “experts” erroneously attributing exploding oil prices on everything under the sun (Middle East tensions, improving economy (lol), lack of domestic production, China’s over consumption of oil, etc.) when the only TRUE reason is all the money printing being done by the Federal Reserve to finance $1.5 TRILLION/yr budget deficits. As almost all oil contracts are based in dollars, any devaluation of the dollar by excessive increases to the US$ money supply will automatically increase the price of oil as the US$ loses value.
I’m also sick and tired af all the money being wasted on “green” energy white elephants that supposedly “create” jobs. They don’t they destroy them. A study conducted on Spain’s “green” energy initiatives found that for every “green” job created, two private sector jobs were lost because alternate energies are so expensive, unreliable (no wind and the whole concept of night) and inefficient.
Thorium/fluoride reactors seem to offer the best alternative energy available: cheap (theoretically of producing energy at $0.01/kwh), abundant (about the same quantity in nature as lead), safe, efficient, and very little nuclear waste (and very short half-life,too). The EPA will, of course, prevent this viable energy source from ever being developed for the US.
Natural gas is the way to go.
Using Dan in California’s numbers for CO2 emissions from coal plants (20,000 tons per day per plant), and multiplying out the $5 per ton suggested carbon tax gives us an increased cost of operation of $36.5 million per year per plant. And this is a “negligible” increase in electric rates?? Where? For the utility company that operates 10 coal fired units this is a rate increase of $365 million per year. That can’t possibly be negligible for any rate structure I can think of.
Thanks for reminding me — There is no such thing as Environmental Economics. There’s just Economics. Anything else is just political indoctrination masquerading as a real field of study.
Gentlemen
In my view, this study seriously over simplifies the situation faced by utilities in 2009. While the drop in electrical demand did result in a disproportionate drop in all emission, including CO2, The study appears to ignore several factors in play in 2009.
Indeed, 2009 was such an unusual year, I don’t feel it would be appropriate to suggest that low natural gas prices played a predominate role in lowering GHG emissions that year.
Factors in play during 2009 included:
1) The price of gas was unusually low compared to coal due to a unusual glut in domestic gas coupled with high international demand and a relative shortage of coal. (e.g. exceptionally high demand for coal in Asia was driving coal prices up). Hence the coal to gas price ratio was distorted.
2) Changes in the CAIR regulation were significant factors in 2009. Complicating factors included:
• Utilities were shifting from the CAIR Phase I regulations to the stricter Phase II regulations. The Phase II regulations had a new requirement to meet NOx emissions requirements year-round rather that just in the ozone season. Consequently, the cost of running uncontrolled units was significantly higher in 2009 compared to 2008. (When utilities calculate their dispatch cost, they factor in the price of emissions allowances for SO2 and NOx).
• It was not all that clear how reliable the industries SCRs could be operated for NOx control with the new year-round requirement. Consequently, it was not uncommon to have coal units on backup standby to cover base-load units with a questionable SCR… while running the gas units hard for peaking. (i.e. a good deal of non-economic dispatch was occurring to protect system reliability).
• Utilities were preparing for a drop in SO2 allowances planned for 2010 under CAIR Phase II. This meant a number of utilities had units on outage to allow the installation of new SO2 and NOx controls. (i.e. units not previously considered economic to controlled were in the process of being controlled AND being operated less until controls could be installed)
• The sudden drop in electrical demand also significantly impacted the type of plants each utility dispatched in 2009. Pre-2009, when the economy was good, utilities used their smaller coal units to cover the extra peak and seasonal demands associated with the healthy economy. These small units typically had fewer pollution controls; largely because it was more economical to control large based-load units and still meet the EPA CAIR rules. However, when the economy tanked, the need run to run the uncontrolled units diminished with the drop in demand.
3) Finally, if you examine the study’s regional impacts on CO2 emission reductions; you can see a disproportionate impact from the Mid-West/South to the East. This is a pretty good indicator that the CO2 reduction is mainly due to reduced demand because: The U.S. East coast (including Florida) imports a substantial of electricity from the south east and mid-west. See typical power flows here:
http://www.eia.gov/todayinenergy/images/2011.12.12/RegionalPowerFlows.png
When the economic crises hit, manufacturing was hit hard in all of the mid-west to eastern regions This resulted in a substantial drop in demand in these regions; particularly compared to the west coast, which manufactures… well virtually nothing.
The problem with single year “studies”, like the one above, is that they assume an economy/industry in transition is operating to an idealistically economic optimum with few overriding non-economic drivers. This is almost never the case. The study may be a useful academic exercise for a doctorial thesis. But, in my view, it has no real world value.
The bottom line is that 2009 was such an unusual year that very few in the industry use it as being representative. And no one in his right mind would make investment/policy decisions based solely on an analysis of events occurring in that year.
With regard to Mr. McElroy’s predication:
“While the data from 2011 are not yet available, based on the gas prices, we’re making a confident prediction that there should be a continued shift from coal to natural gas in 2011 as compared to 2008,”
Given my knowledge of which units were dispatched in 2011, I would agree that we will see more gas used in the 2011 data. Indeed, I will likewise predict that 2011 will show an increase in gas use.
However, the current situation has little in common with 2009. I would attribute the increase use of gas to a combination of: 1) the EPA’s passage of the odious CSAPR, MACT, and GHG rules and the general regulatory attack on the coal industry; 2) the continuing bad economy as compared to the whole of 2008; 3) reduced 2011 winter electrical demand due to mild weather; 4) an increased winter 2011 gas supply due to a mild weather; 5), on the bright side, the emergence of cheap shale gas at historical low well head prices, and 6) continued high demand for coal in Asia.
In the long run, I will go two steps further. I predict: 1) That to the extent that utilities build any new power plants they will more likely build gas units (as the new EPA rules simply don’t allow any other outcome); 2) Those existing coal units which are controlled, or will be controlled, will produce electricity cheaper than the new gas units (i.e. the total cost of the nearly fully depreciated coal-units will be cheaper than the un-depreciated gas units).
Regards,
Kforestcat
Kforestcat says: February 28, 2012 at 10:59 am
Gentlemen
In my view, this study seriously over simplifies the situation faced by utilities in 2009. While the drop in electrical demand did result in a disproportionate drop in all emission, including CO2, The study appears to ignore several factors in play in 2009. ………………….
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Thank you for what is obviously an insider’s view of how the power generating industry works. I’m just a nosy outsider looking into this field.
As shown by this EIA document,
http://205.254.135.7/totalenergy/data/monthly/pdf/sec7_5.pdf
US total electricity generation fell off a cliff in 2009.
Moreover, it is not clear from the Harvard study that they adequately took into account weather related effects. Were they using actual generation numbers or weather-adjusted? If they’re using actual generation, then you can’t tell anything meaningful from their study.
What is clear from the above document is that US electricity consumption rose steadily every single year from 1973 at approximately 1,860 TWh to about 4,100 TWh in 2004. It has flatlined ever since. What this document tells me is that US electricity demand has marched along steadily with US GDP growth over time with the largest portion of that growth being supplied by new nuclear, particularly for 1973-1995. From 1973, nuclear power increased its total energy output by a factor of 10, while nat gas increased its output by a factor of about 2.5.
What the flatlining in 2004 tells me is that this is roughly the time when manufacturing in the US also went to zero growth. If so, then it suggests to me that the days of 6-7 per cent annual GDP growth in the US are gone, possibly permanently. At least until someone shuts down the morons at EPA. No one’s going to make any large industrial investment in this climate of regulatory havoc, and no one has.
Furthermore, the Harvard study is meaningless rubbish because it looks at far too short a time line for changes in generation patterns. In a span of just a couple of years, the result is likely to be contaminated by all kinds of immediate factors like plant outages and weather effects, which disappear over a long term trend line.
Old Engineer @ur momisugly 8:02 is right. There has not been enough time for conversion of coal-fired boilers to gas-fired boilers. What there has been is a significant fleet of gas CTUs used at only limited capacity on the east coast of the US. These were idled even during winter peak loads during the middle part of the last decade because of high gas prices. By and large, utilities such as NEPOOL and NYPA were importing more electricity from southern states coal generation and increased imports of hydraulic generation from Quebec. The collapse of gas prices over the last two years has simply fueled a higher utilitization rate of these CTUs.
As a former coal power-plant engineer, I can tell you why electricity demand (carbon production) has fallen off — lack of industrial demand (which was over 40% of total load). My company was (is) very sensitive to that. And electric sales to other utilities used to be a big money-maker — no more.
Instead of celebrating, the loss of demand just illustrates how industry is leaving/scaling down. This is a BAD thing.
Mr. Holle,
The reason that the North American continent is a Net Carbon dioxide sink has little to do with suburban lawns and landscaping, although I suppose that has some marginal contribution.
It is because North America has vast amaounts of land used for ranching, agriculture, and Silviculture. It is not well known but there is more land set aside than thearea of13 original colonies. It is preserved and dedicated to Parks, and Wilderness,all of which consumes and sequesters vast amounts of CO2 blowingf inon the winds from the Pacific and presumeably generated in Asia, although net ocean outgassing is a possibility, not fully understood.
Man in Amrica, has created an environment that consumes Flora biomass and allows for a net increase in the use of CO2 because these flora products are not just allowed to rot and returrn CO2 to the atmosphere.
Ignorant, thoughtless Greenies muttering about wishing for “old growth forests” overlook that a dead tree rotting in an old forest just puts CO2 back into the atmosphere. Harvesting crop and wood for food, lumber and paper consume the flora biomass, while also providing work and product for humanity. The NASA satellites as well as the Princeton studies and mesurements all over America, affirm that CO2 on NET is being sequestered. That can only come from the actions of Man that are different then are employed elswhere in the world.
The Amazon Rain forest is a prodigious producer of biological life but it is largely a constant recycler of the same quantiy of bio-tonnage and therefor provides only a small Net carbon dioxide sink. The carbon dioxide sink is still a sink from the Amazon though, consuming net CO2 from the atmosphere. I think it is also proof that the so called exploitation of the rain forest is just so much overblown fears, and on margin the Amazon Rain Forest is still re-expanding.
The NASA satellites are afirming a greening Earth everywhere from the fertilizing effect of more atmsopheric CO2. The Plant Kingdom has consumed too much CO2 from the atmosophere and are have stunted their growth. The rise in trace levels of atmospheric CO2, from Man or Ocean outgassing, is wholly benign and beneficial, as the feared climactic effects are increasingly seen as de minimus, and of little concern..
Speaking of the Amazon, did you note the recent discovery of immense “geoglyphs” lurking under the jungle? Seems that pre-Columbus, the Amazon was substantially cleared and cultivated. All good Greenies should be pressing to return to those Halcyon Days!