Category Archives: energy

Jackie Bavaro Liquefied Natural Gas Poised to make its Mark in the Global Energy Arena

The cover story for the June issue of American Gas magazine, titled, “Taking the Global Stage,” examines the current state of the liquefied natural gas (LNG) market and the opportunity for significant growth around the world.

The global LNG industry plays a key role in expanding access to an energy resource that will help achieve a lower-carbon future, cleaner air in metropolitan areas and a prosperousJune Capture economic outlook. Yet, over the next two years, new LNG supplies combined with weaker economic growth, increased competition from competing fuels and drastically lower oil prices may place downward pressure on LNG prices.

Despite these barriers, the global, social and political groundswell demonstrated by the COP21 agreements in Paris, France last November indicated that LNG can be a critical part of the future global energy mix.

Currently, the United States, which is now shipping from the lower 48 states with Cheniere’s first commissioning cargo in late February, has been reaching across the globe with its exports. The impact has rippled throughout the domestic natural gas industry. As a result, U.S.-based LNG companies have relationships with companies in many LNG-consuming countries with the ability to sell to eager buyers worldwide. New trade options are also opening up with the proliferation of emerging LNG markets in Australia, Southeast Asia, the Baltic states, Latin America and even the Middle East. In the short term, sellers will focus on Europe as a market for their excess volumes of LNG in 2016.

Last year marked the largest trade year in the history of the LNG industry. As a result, close to 10 percent of the world’s demand for natural gas is now met through LNG. A big year for trade paired with new import markets and a handful of liquefaction projects reaching final investment decision means global LNG is on the rise.

You can read the full American Gas article here.

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Jackie Bavaro Infrastructure Week 2016: #InfrastructureMatters

Today marks the beginning of the fourth annual Infrastructure Week. This non-partisan initiative is the largest, most diverse coalition of its kind and assembled by the nation’s leading policy, labor and business organizations, to raise awareness about the lack of infrastructure investments across the nation.

The theme for 2016 is “Infrastructure Matters” which tells the story of what infrastructure, both big and small, means to Americans, and how it affects our country, communities, economy, quality of life and overall safety. Natural gas utilities are consistently working to upgrade natural gas systems to ensure continued safe and reliable delivery of this foundation fuel to customers across the nation, and these investments are an important contributor to the U.S. economy, and ultimately to every aspect of Americans’ daily lives.

This week, advocates from across infrastructure sectors will gather in Washington D.C., and throughout the nation to highlight the importance of policies and investments essential for keeping our bridges, roads, rails, airports, natural gas pipelines and the power grid functioning safely and reliably into the future. There are a number of events being held throughout the country to highlight the “Infrastructure Matters” theme.

Throughout Infrastructure Week 2016, follow the AGA Twitter and Facebook pages for updates on events and to follow our progress on Capitol Hill and communities nationwide. Use the hashtag #InfrastructureMatters to join in the conversation.

You can learn more about how to participate in Infrastructure Week 2016 here.

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Richard Meyer Science, Like Fashion, is Never Finished

New knowledge sharpens our understanding of natural gas system emissions

The facts on methane are evolving. They are also complicated, and sometimes contradictory.

The questions around methane—how much, and from what sources—help clarify how the use of natural gas may achieve greater environmental benefits.

Prior work has shown that natural gas systems have a small methane footprint shaped by a declining trend. During the past few years, a number of efforts were launched to study and better understand the magnitude and location of methane emissions from the natural gas and other industries.

Two analyses were released in April 2016 that summarize and synthesize a growing body of work to date on methane. These studies are important because they help refine our understanding of emissions from natural gas systems and the implications for the greenhouse gas (GHG) profile of natural gas.

The first is the annual Inventory of U.S. Greenhouse Gases and Sinks from the U.S. Environmental Protection Agency (EPA).  It’s the most comprehensive assessment of natural gas system methane emissions available.

This year’s edition featured significant revisions to its methodology and data sources for estimating methane released from natural gas industry operations. It incorporated data from EPA’s GHG Reporting Program, to which many natural gas companies across the U.S. are required to report. This dataset includes information on equipment counts and other “activities” or emissions sources.

In addition, the new Inventory integrates recent peer-reviewed studies that measured emissions from different components of the natural gas industry. New studies offer more recent and accurate data relative to prior editions.

For example, in this study a research team from Washington State University went into the field and measured emissions from natural gas distribution systems in 13 cities. They found that emissions from pipeline leaks and other gas utility systems were 36 to 70 percent lower than what EPA had been showing. These measurements formed the basis for new “emission factors,” which is a kind of average emissions per source that is used in EPA’s estimation methods

With all these changes, the Inventory reveals once again that natural gas system emissions have declined since 1990. The bottom-line total shows that total methane released from all natural gas systems declined 15 percent from 1990 to 2014.rmchart1

Furthermore, emissions from gas utility distribution systems in particular are now a small fraction of what they were two decades ago—down 74 percent since 1990—even as the system expanded more than 30 percent in terms of miles of pipe installed and numbers of customers served. The chart below illustrates the estimates for emissions from distribution mains alongside the growth in the miles of those pipelines. You can see the simultaneous decline in emissions and growth in the miles of main installed.

rmchart2This exceptional record can be traced to safety as the top priority for gas utilities who continue to systematically upgrade infrastructure. Today, there is a growing effort to accelerate the replacement of pipelines. Thirty-nine states and the District of Columbia have some form of accelerated infrastructure replacement program or policy, which is helping reduce emissions. It is because of these continuing efforts to modernize infrastructure and to enhance pipeline safety that natural gas emissions from distribution are expected to continue to decline.

In this year’s Inventory, EPA also expanded its universe of sources for the field production stage, which in turn revised emissions upward by 31 percent. The level of emissions may be higher than before—again due to accounting for gathering and boosting infrastructure that was not included in earlier inventories—but the trend is largely flat for the last decade. Field production emissions have been level since 2005 even as production increased 34 percent.

In all, the methane emissions rate of production—the so-called “leakage rate”— is now 1.4 percent. This is a level well below even the most stringent thresholds for immediate climate benefits achieved through coal-to-gas switching.

This exceptional record can be traced to safety as the top priority for gas utilities who continue to systematically upgrade infrastructure. Today, there is a growing effort to accelerate the replacement of pipelines. Thirty-nine states and the District of Columbia have some form of accelerated infrastructure replacement program or policy, which is helping reduce emissions. It is because of these continuing efforts to modernize infrastructure and to enhance pipeline safety that natural gas emissions from distribution are expected to continue to decline.

In this year’s Inventory, EPA also expanded its universe of sources for the field production stage, which in turn revised emissions upward by 31 percent. The level of emissions may be higher than before—again due to accounting for gathering and boosting infrastructure that was not included in earlier inventories—but the trend is largely flat for the last decade. Field production emissions have been level since 2005 even as production increased 34 percent.

In all, the methane emissions rate of production—the so-called “leakage rate”— is now 1.4 percent. This is a level well below even the most stringent thresholds for immediate climate benefits achieved through coal-to-gas switching.

More on the recent Inventory and changes to its methodology can be found in a white paper analysis I published titled, “New Science, New Facts: Understanding Updates to the EPA Inventory of Greenhouse Gases.”

The second analysis released in April is a comprehensive summary of the current literature. Titled Finding the Facts on Methane Emissions: A Guide to the Literature, ICF International examined 75 different studies to provide context for their respective conclusions. The consulting firm also evaluated the different kinds of sources of methane emissions in the natural gas industry, reviewed recent data on emissions (including the EPA Inventory), and discussed efforts for reductions.

Among its findings, ICF confirms a number of environmental attributes of natural gas:

  • Natural gas combustion releases significantly less carbon dioxide and criteria pollutants such as sulfur dioxide, nitrogen oxides, particulate matter (soot) and mercury compared with other fossil fuels.
  • U.S. carbon dioxide emissions are near 20-year lows.
  • The most detailed life-cycle analyses show that emissions of natural gas are 40-50 percent lower than coal on a 100-year basis.
  • The use of natural gas for power generation enables greater penetration of clean, renewable energy sources that are intermittent.

It concludes from its “meta-analysis” of 75 different studies on methane emissions that:

  • Direct measurement studies of emissions from natural gas operations show lower emissions than the factors used in the EPA Inventory, but a small number of sources inflate the emissions profile.
  • Ambient air measurement studies show a range of results and are affected by a variety of uncertainties.
  • Additional support that life-cycle analyses of natural gas show significantly lower emissions compared with coal.

Science, like fashion, is never finished, and ICF rightly notes that there’s more work to be done in this space. Similarly, the EPA Inventory is an iterative process with annual updates to its data and methodology. We should expect additional changes to estimates from natural gas systems next year.

Importantly too is that the natural gas system itself is constantly improving. I mentioned the 39 states (and DC) with pipeline replacement programs, which have contributed to reductions in emissions from gas utility systems. In addition, 41 companies have pledged support as founding partners for the EPA Methane Challenge Program, which launched in March 2016 and is designed to encourage companies to follow certain best practices to mitigate methane. And currently EPA regulations to reduce volatile organic compounds from natural gas production went into effect in 2015 and are helping to reduce emissions.

We should expect more work in terms of technology, science around emissions, and collaborations between companies and regulators that will further improve upon the already low emissions profile of natural gas systems. These analyses underscore the role that natural gas can play in helping to reduce overall GHG emissions.

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Jake Rubin Extending the Benefits

Americans want natural gas to heat their homes, warm their water and cook their food because it is comfortable and affordable. More homes and businesses use clean natural gas today than ever before and the numbers continue to increase. In addition, many industries use natural gas as a fuel or a feedstock for production. Recent low prices of natural gas have reduced the price of goods manufactured in this country and created many manufacturing jobs here at home. To deliver that unparalleled value, we need to build more pipelines and expand our pipeline capacity in certain parts of the country. New pipeline and processing infrastructure expansion will be key to connecting new supply sources with new and growing sources of demand.

A study prepared for the National Association of Manufacturers (NAM) by IHS released last week says that total natural gas demand is poised to increase by 40 percent over the next decade—double the growth of the past 10 years. IHS estimates that as a result of the increase in domestic shale gas production, the United States’ gross domestic product (GDP) increased by $190 billion and added 1.4 million more jobs. Our nation’s natural gas abundance means the average American family had an extra $1,337 in disposable income.

When we invest in constructing, expanding and repurposing existing natural gas pipelines, it makes a significant contribution to the U.S. economy. The study explores increases in economic activity in sectors that provide the goods and services used in the construction and operation of natural gas pipelines such as steel pipe, coatings, construction equipment, compressors, motors, gauges and instruments, sand and gravel, engineering and design services, etc., as well as the spending of disposable income by construction workers. The construction of new natural gas transmission lines meant more than 347,000 jobs in 2015 alone. When you also consider the ongoing impacts of operation and maintenance of existing pipelines as well, it adds up to nearly $50 billion in GDP that year.

The study cites two reports supported by the American Gas Foundation including “Gas Distribution Infrastructure: Pipeline Replacement and Upgrades” from July 2012 and “Fueling the Future with Natural Gas: Bringing It Home,” which was also prepared by IHS in January 2014. The “Fueling the Future” report highlighted an opportunity to use natural gas to promote economic development, attract industrial, power or large commercial gas-using facilities to serve as anchor tenants around which a gas distribution system can be extended to smaller residential and commercial customers in the area. To do this, we need a new regulatory atmosphere. Much of the prevailing natural gas regulation was developed in a time of perceived natural gas scarcity. Thirty-seven states have adopted or are currently considering innovative pipeline expansion proposals to get gas to communities that don’t yet have it, and that number is quickly growing. As they do, more American homes and business will be able to experience the benefits of clean natural gas for themselves.

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