Selected category: Natural Gas

Greater Flexibility, Efficiency in Gas Markets Requires New Standards

Markets for electricity and natural gas in the U.S. grew up independently of one another. The rules in one do not always align with the rules in the other, creating challenges for both operators and regulators. Cumbersome inefficiencies are becoming more evident with the rapid evolution of the electric system. With more gas-fired power plants coming online, and the growing requirement to balance intermittent renewable sources on the electric grid, there is now a pressing need to synchronize these two markets. Fixing the disconnects means the two systems need a better framework for doing business with one another. The place where the markets meet is gas generators’ use of the nation’s pipeline system.

Flexibility is Key

Pipelines primarily make money by selling firm (i.e., premium) transportation service. This type of service places value on one thing: moving gas from point A to point B. This market design means that pipelines have no commercial incentive to provide services that are actually needed by gas generators (they get paid regardless of how the capacity is used). The fuel supply needs of gas generators vary over the course of the day and therefore require pipelines to deliver gas on a more variable basis—a “smart” service far more valuable to power generators because they are paying for what they use, rather than for pipeline capacity. Furthermore, signing up for firm service is often too expensive for gas generators who don’t need the service on every day of the year and are not guaranteed recovery of these costs in the electric markets. Read More »

Also posted in Gas to Clean, General| Comments are closed

More than ever, EPA’s Greenhouse Gas Inventory Program is Vital to Understanding Methane Emissions

In its 2017 GHGI Inventory, published last week, EPA estimates 2015 methane emissions from the U.S. oil and gas industry were 8.1 million metric tons,which is enough to fulfill the domestic heating needs for over 5 million homes.

In addition to estimating 2015 emissions, EPA has revised their estimates of previous years’ emissions based on new scientific data. The lower estimates compared to the 2016 Inventory is almost entirely due to new accounting methods – the actual decrease in emissions from 2014 to 2015 was only 2%, and this was due to fewer well completions resulting from lower oil and gas prices.

EPA still has room for improvement

Although the estimate of oil and gas emissions went down in this year’s report, it should not be viewed as a final answer since EPA plans to make further improvements including better accounting of super-emitters, which science has shown to be a major source of emissions. These changes likely would counteract the decreases in other emission sources. Read More »

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As Oil and Gas Industry Goes Big in the Permian, Efforts to Tackle Emissions Will Be Telling

By Jon Goldstein and Ben Ratner

Much ink has been spilled recently about big new oil and gas investments in the Permian Basin across West Texas and Southeastern New Mexico. What some are dubbing “Permania” includes a more than $6 billion investment by ExxonMobil in New Mexico acreage and an almost $3 billion one by Noble Energy across the border in Texas, among others. But a large question remains: will these types of big bets also come with the needed investments to limit methane emissions?

It’s not just an academic question. The answer will go a long way toward revealing if industry actors plan to operate in a way that serves the best interest of local communities and taxpayers. Unfortunately, New Mexico is currently the worst in the nation for waste of natural gas resources from federal lands (such as those that are found in large parts of the state’s Permian Basin). Largely avoidable venting, flaring and leaks of natural gas from these sites also puts a big hole in taxpayers’ wallets, robbing New Mexico taxpayers of $100 million worth of their natural gas resources every year and depriving the state budget of millions more in royalty revenue that could be invested in urgent state needs like education. Read More »

Also posted in General, Methane| Read 1 Response

How Polluting Less Can Help Pennsylvania Employ More

By Andrew Williams and Isabel Mogstad

For decades, the polluter lobby has argued that environmental regulations are too costly and kill jobs. A new report out today is calling their bluff.

The report, from international consulting firm Datu Research, looks at a sector of the economy that focuses on finding and fixing oil and gas leaks – which contribute to climate change, waste energy, and damage local air quality. A growing number of states  have been requiring companies to reduce emissions by regularly checking their equipment for leaks. In those regions, companies that provide pollution control services have grown up to 30%.

This could mean big things for Pennsylvania – which has committed to implementing its own oil and gas pollution protections targeted at cutting methane from new and existing natural gas infrastructure. Read More »

Also posted in General, Jobs, Methane, Pennsylvania| Comments are closed

Trump Undermining Jobs That Conserve Natural Gas, But States Should Create Them

The biggest irony of the Trump Administration’s attack on environmental safeguards is that it will undermine a central promise of his candidacy: supporting boots on the ground, American jobs in growth sectors. One prime example? The emerging service industry that puts people to work finding and fixing harmful natural gas leaks.

American workers in the methane mitigation industry keep the product, methane (the main ingredient in natural gas), in the pipes and out of the sky. That’s a win for workers, who receive technology training, competitive wages, and opportunities for upward mobility. It’s a win for surrounding communities, as methane emission reductions also help keep smog-forming pollutants out of the air they breathe. It’s a win for oil and gas operators, which make operations more efficient and improve safety. And it’s a win for the climate, since methane is 84 times more potent in the near term than carbon dioxide.

In other words, if winning were more than a campaign slogan, supporting America’s methane mitigation industry would be an obvious opportunity to seize. Unfortunately, President Trump’s anti-jobs approach to undermining methane safeguards does just the opposite. Read More »

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More Subsidies than You Think Influence the Cost of Electricity

The Texas electricity market is evolving. Low prices have helped natural gas become the dominant electricity generation resource, surpassing coal for the first time. The state’s unique competitive wholesale market, along with recently built transmission lines, have led to exciting opportunities for the rapid development of wind and solar generation. But in looking at the cost of various fuel sources and Texas’ energy future, confusion about electricity subsidies needs to be addressed.

Yes, wind and solar power have recently benefitted from the federal Production Tax Credit and Investment Tax Credit. That said, it’s important to recognize that natural gas and coal generation have enjoyed state and federal incentives for a century, and continue to do so.

The tax benefits for wind and solar generation are not the same as those for fossil fuel generation, but each plays a similar role: Tax benefits affect the final cost of electricity. Read More »

Also posted in Solar Energy, Texas, Wind Energy| Comments are closed
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