Natural Gas:

“A long and expensive bridge”

By Mark Crisson, American Public Power Association

If natural gas is the bridge fuel that will take us to the promised land of carbon free electricity generation, it’s going to be a pretty long and expensive bridge.

That’s one of the conclusions found in a new study commissioned for the American Public Power Association. The study was prepared to inform APPA members who are concerned about potential hurdles related to regulatory- and legislation-driven coal to natural gas conversions. Fossil fuel power plants and coal plants in particular face the prospect of a significant body of regulation over the next several years, even before the likely enactment of a climate change law. (The attached possible timeline for environmental regulations is sobering, to say the least.) Natural gas has been cast as the bridge fuel that will take us from relying on coal to generate more than half of our electricity, to a lower-carbon future of renewables, carbon capture and geological sequestration of CO₂, new nuclear plants, and perhaps plug-in hybrid electric cars.

Given the possibility of this coal-to-gas fuel-switching scenario, APPA commissioned the study, Implications of Greater Reliance on Natural Gas for Electricity Generation. The study was conducted by Catherine Elder, a natural gas expert at the Aspen Environmental Group. It is available for download here.

APPA commissioned this study because our members are concerned about just how utilities would extract, store, and move natural gas to where it is needed in a reliable, sustainable, affordable and environmentally sound way. It was never intended to be an advocacy tool, beyond advocating that policymakers – and utility planners – take a hard, fact-based look at energy policy options and their implications.

The implications of switching all coal-fueled electric generating plants to natural gas are daunting. The report found:

• Overall demand for natural gas would increase from 23 trillion cubic feet per year to 36 Tcf per year – a nearly 60 percent increase – with two-thirds of it serving electric power plants, up from just under one-third today.
• Certain areas of the country, such as the East Coast and Central Plains states, have significantly more pipeline capacity issues and gas storage problems than other areas. The pipeline capacity in 21 states would be inadequate to meet the extra demand from fuel switching. The estimated cost of the new pipeline capacity needed to meet this increased demand would be approximately $348 billion.
• There exists a common misconception that existing coal-fueled units can be retrofitted to burn natural gas, but virtually all conversions to date have been replacements, not retrofits. Combined-cycle gas-fired generation costs roughly $1 million per megawatt, (installed), so replacing the existing 335,000 MW of coal-fueled generation should cost in the range of $330 billion.
• Natural gas storage capacity will need to increase by 1.4 trillion cubic feet, at a cost of close to $12.5 billion. However, natural geology limits the opportunities to build new storage facilities where they are needed. The study points out that almost half the states have inadequate or no natural gas storage capacity.