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Is Natural Gas a Sustainable Threat to Coal?

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Louisville, Ky.   Aug 16, 2012 By Lindsay Morris in Power Engineering

As the power industry faces record low natural gas prices and a number of federal regulations aimed at cleaning up coal power, the battle between natural gas and coal is raging full-force. During a session at the COAL-GEN Conference and Exhibition in Louisville, Ky. on Aug. 16, speakers focused on answering the question, “Natural Gas: Is the Threat to Coal Sustainable?”

Dave Hughes, president of Global Sustainability Research, said gas production in the U.S. has grown dramatically over the last two decades. In fact, the number of gas wells has tripled since the 1990s, and gas will continue this upward movement, he said. According to the Energy Information Administration (EIA), natural gas is expected to grow by 16 percent of the power generation mix by 2035. Natural gas will largely fill the void that will remain after the EIA-projected 49 GW of coal is retired over the same time period, Hughes said.

The main draw to natural gas is the low price. At sub- $3 per mmBtu natural gas prices, the levelized cost of coal is three times higher, said Dr. Joseph Smith, president, Systems Analyses and Solutions.

Shale gas represents a growing percentage of the gas mix, Hughes said. The EIA estimates that shale gas will comprise 49 percent of the gas supply by 2035. However, Hughes said power generators should be aware that potential EPA regulations could be enforced on methane emissions from shale gas. “The methane in shale gas could be more harmful to the environment than greenhouse gases in coal,” he said.

Power generators should also be mindful that gas power – not just coal – emits greenhouse gas, said Grant Grothen, principal, Burns & McDonnell. Greenhouse gases could soon by limited through the EPA’s New Source Performance Standard (NSPS). The proposed rule would require any new power plant to emit no more than 1,000 pounds of carbon dioxide (CO2) per megawatt-hour of electricity produced. The average U.S. natural gas plant, which emits 800 to 850 pounds of CO2 per MWh, meets that standard; coal plants, however, emit an average of 1,768 pounds of carbon dioxide per MWh.

However, some natural gas combined-cycle units may not be able to meet the proposed NSPS.

For example, Louisville Gas & Electric is currently planning a natural gas combined-cycle plant that would not be able to operate without carbon capture and storage technology under the proposed standard. John Voyles Jr., vice president of transmission and generation for LG&E, who spoke during the COAL-GEN keynote session, said that on the surface, the new 640 MW plant could operate on less than 1,000 pounds of CO2 per MWh.

“Unfortunately, when you apply production standards to start-ups and shut downs at the plant, we will not be able to comply,” Voyles said.

Another potential challenge for natural gas plants is infrastructure, Grothen said. By default, pipelines are fully subscribed when constructed, he said, but an electric utility might be able to buy space from third parties. However, even if a utility manage to secure adequate space on a pipeline, in cold conditions, when natural gas is in high demand, a typical pipeline offers “little or no room for additional resources.”

Too much dependence on natural gas could threaten more than just coal generation, Smith said. Cheap natural gas is reducing research and development efforts for alternative energy, he said, particularly bioenergy projects.

“Overemphasis on natural gas is a threat to energy stability,” Smith said. “A major shift to natural gas-fired power generation will reduce U.S. energy security as the country becomes too dependent on gas and there are sudden shifts in gas prices.”

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