What does that mean? What it means is the same thing AGA has been saying for years and reiterates in our press release today praising the National Academies.

Natural gas is highly efficient. To pull from the release, 70 percent of the total amount of fuels used in producing, generating and transmitting electricity is lost by the time that electricity reaches a customer. By contrast, producing and delivering natural gas directly loses only about 10 percent of its usable energy.

That’s obviously a big difference.

The release goes on to underscore how the study echoes the ‘carbon footprint labeling’ provisions that were recently included in the Waxman-Markey climate change legislation, which would expand the existing Federal Trade Commission EnergyGuide labeling program for home appliances to include carbon footprint information.

The carbon label is a big deal and Dave sums it well when he says, “This study recommends a change in the way that we look at energy efficiency in our appliances and it should be expanded to include building codes that also measure energy efficiency.”

It’s great to hear other people get what AGA has been saying for years. I know we have a few DOE people that browse this blog. What do you guys think? Is the National Academies a reliable enough source to Full-Fuel-Cycle Measurement Approach. Just asking.

If you’re interested, you can visit AGA’s energy efficiency page for more information on the benefits of natural gas.

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“Politicians, when they do that (claim energy independence is achievable), I think they are misleading their publics,” Prince Turki said.

He is right, and while many people will think Prince Turki is being self serving – the Saudis are, after all, the world’s largest oil producers – the fact is that the American public would not stand for the energy price increases that would result if we somehow managed to quickly wean ourselves off of oil or natural gas imports and relied on renewable energy as our dominant energy supply source.  Currently renewable energies such as wind and solar – which are far more expensive than the three major fossil fuels, coal, oil and natural gas – meet about 2 percent of our domestic energy needs.

But the larger point is that energy independence is the wrong goal.  Energy security is the proper goal and to achieve that we need more, not less, diversity of supply.  That means we need as many kinds of energy supplies as possible, including more liquefied natural gas (LNG), and we need as many suppliers as possible.  In other words, to achieve energy security, we need to establish a global energy industry in which as many buyers interact with as many sellers as possible.

Another problem is that when our politicians talk about achieving “energy independence,” it isn’t just the public they mislead.  It is also the suppliers. In an interview with American Gas magazine, global energy expert and Pulitzer Prize-winning author Daniel Yergin points out that, on the one hand our political leaders continually encourage energy producers such as the Saudis to increase their energy production and exports, while on the other hand these same politicians keep talking about energy independence.  “That is a confusing message for energy-producing nations,” Yergin says.

He is right, too.

A Saudi Prince, a Pulitzer Prize-winning author and me.  Some days (to coin a phrase) this job is a “gas.”

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Tom started out with a very simple message. Natural gas is a clean, efficient and abundant energy source that provides an immediate, low carbon, domestic energy choice for America’s consumers. After that, he took some time to outline his priorities for the year.

• Advocating for the direct use of natural gas in America’s homes and businesses. It’s more efficient, more cost effective, better for the environment. Directly from the wellhead to the burner tip, natural gas loses only about 10 percent of its useable energy.
• Increase natural gas supply. Prices have moderated compared with this past summer, but that will change as economy picks up, and in current economic climate ANYTHING that can be done to lower prices and decrease volatility is good for customer, including:
  • Keeping the OCS open and expanding into new areas
  • Increasing access to non-federal park lands
  • Increasing LNG
  • Supporting the development of the Alaskan Pipeline to the lower 48
• Advocate that residential and commercial customers be covered but not capped under current climate change legislation . Here’s a great stat for you: The number of residential households using natural gas increased from 38 million in 1970 to about 65 million today – an increase of more than 70% – yet aggregate residential consumption, and greenhouse gas emissions remained essentially flat.
• Work with regulators to promote decoupling & other innovative rate designs. Today, 28 companies in 16 states have adopted some form of margin decoupling tariffs and 11 companies in 6 other states are in the process of approving it. Tom also made a point that no one-size-fits all. Utilities need to work with their regulators to determine best design for their individual circumstances.
• Work to increase LIHEAP funding. AGA led an effort to secure a record amount of funding for FY 2009, $5.1 billion, the full amount authorized in EPAct 2005. The Obama administration has requested only $3.2 billion for 2010. AGA will keep working on this issue to ensure low-income families get the help they need in these tough economic times. Here’s a link to a post on LIHEAP Action Day if you want to learn more.
• Continued outreach. Natural Gas has a great story to tell. An industry of solid fundamentals, good business practices, transparent operations, connected to our 65 million customers through 2 million miles of pipeline, and thanks to the inherent advantages of our clean-burning, efficient, domestic fuel, we have excellent growth opportunities-especially as we emphasize the advantages of the direct use of natural gas.

Quite a presentation. After Tom was done, there were some good questions from the media in attendance but Tom didn’t shy away, and gave what I thought were very good answers. If you missed it … well, you missed a good one. If you were able to attend, let me know your thoughts in the comments below.

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Dave Parker had some good thoughts on the matter.

“Right now, natural gas utilities are able to deliver clean, domestic natural gas to customers at reasonable prices,” Parker said.  “With the economy in the doldrums, now is not the time to increase the price of natural gas to consumers.”

You can read the full release here. Are you worried these changes are going to lead to higher bills? Let us know what you think in the comments.

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The CCFC is one of nearly 90 Clean City Coalitions participating in the Department of Energy’s (DOE) Clean Cities Program. The mission of the National Clean Cities Program is to reduce petroleum dependence, improve air quality, and expand alternative fuel use and technology. The program promotes, accelerates, and expands the use of alternative fuels in the transportation sector. Working through locally-based government- industry partnerships, the Clean Cities Program seeks to expand the use of alternatives to traditional gasoline and diesel fuel. The DOE classifies the following fuels as “alternative fuels”: biodiesel, electricity, ethanol, hydrogen, methanol, natural gas, propane, and solar energy.

Some of the initiatives that Piedmont was recognized for include:

• Piedmont’s “no idle” policy for its entire fleet of utility service and distribution vehicles as well as various employee programs around carpooling to work
• Walking to lunch instead of driving during the ozone season
• Refueling vehicles after 6:00 p.m. to reduce VOC (volatile organic compound) emissions
• Acquiring two natural gas forklifts for use in its Distribution Center replacing units that used propane or gasoline
• Maintaining several vehicles in its service and distribution fleet that run on natural gas.

Congratulations again to Piedmont for some well-deserved recognition.

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For example, ask most Americans where the electricity they use in their homes comes from and they will respond, “The electric outlets.”  And they are right – sort of, because while it is true that if you plug an electric appliance into an electric outlet, it will receive electric power, that is not where electricity originally comes from.

Electricity originally comes from coal, or natural gas, or from a nuclear power or hydroelectric plant, or – increasingly – from wind or solar energy.  These original sources of energy are then converted into electricity at generation plants and delivered using transmission lines (such as those in the picture accompanying this post) to those aforementioned electric outlets.

Here is another thing most Americans don’t know.  When the energy source travels from its place of origin – a coal mine in the case of coal, a wellhead in the case of natural gas – to the power plant in which it is converted to electricity, and then on to its ultimate destination at the electric outlet, it has taken a very inefficient journey.  In fact, during that journey around 70 percent of the useable energy is lost.  Most of that loss results from the generation process.

What is more, depending on what fuel is used to generate the electricity, varying amounts of greenhouse gases are released into the atmosphere during the generation process.  That is why, for example, in our new environmentally conscious climate, natural gas is now the preferred fuel for electricity generation.  It is much cleaner than coal; presently it is much more abundant and reliable than wind or solar power; and it is much less controversial than nuclear power.

Of course, in addition to using natural gas to generate electricity to power electric home heaters, water heaters or stoves, natural gas is also used directly to power natural gas home heaters, water heaters or stoves.  And guess what?  This direct use of natural gas in homes or businesses is far more efficient than turning it into electricity for the same purpose – natural gas only loses about 10 percent of its useable energy traveling from the wellhead to the burner tip.  And being more efficient, these direct uses also are more environmentally friendly.  In fact, a typical American home generates twice as many greenhouse gas emissions using an electric resistance water heater than one using a comparable natural gas water heater.

That is why AGA is working to educate more Americans, including our political leaders, about the advantages of the direct use of natural gas. It increases energy efficiency, reduces greenhouse gas emissions and saves consumers money. If you’d like to see how much smaller your carbon footprint would be with increased direct use, go to www.comfortableresponsible.org and check out their carbon calculator. You might be surprised.

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AGA executives also told attendees about our organizations top issues for 2009:  supply, dividend tax, LIHEAP funding and the environment.  An Associated Press reporter who was in attendance captured the event nicely.

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The price of natural gas is half of what it was less than a year ago, they say, and your own industry people (meaning the producers) tell us supplies are abundant. There is no real need, they conclude, for more access.

The point being missed in this argument, however, is that the economic law of supply and demand is still at work. Supply today exceeds demand, thus the drop in prices, whereas just a few years ago the reverse was true. Despite the cold winter so far, demand for natural gas is way down due to the recession. People are simply not buying things like houses or cars, and they are buying fewer of other things like clothes or even bottled water. And all of this impacts the demand for natural gas.

Think about what goes into a new car – steel, glass, plastic, aluminum, fiberglass – all of it is natural gas intensive. The huge drop in gas demand in the industrial sector, especially in manufacturing, has led to excess available supply, and indeed to lower prices.  But now is not the time for complacency!

It may take several years for our economy to recover and while low energy prices may have lessened the sense of urgency we felt this past summer, our lawmakers need to look at the long-term reality of the situation.  It will take years if not decades to find and bring new resources to market. Because of this lag, failure to act now to ensure we have the supply that the future economy will demand, will only ensure high-prices for all.

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But what about responsible?   How does the word responsible describe the benefits of natural gas?  Let’s talk a minute about how natural gas is the responsible energy choice when it comes to our environment and our nation’s energy security.

First, natural gas is clean.  It is the cleanest of all fossil fuels, emitting 40% less carbon dioxide than coal, 30% less carbon dioxide than oil and 15% less carbon dioxide than propane.  Using more of our product to displace other fossil fuels reduces greenhouse gas emissions.  But that’s not all. When we use natural gas directly in our furnaces, water heaters, ranges or dryers, we emit even fewer greenhouse gases than if we used appliances operated by electricity generated from coal, oil or even natural gas.

How can this be?  How can generating electricity with natural gas be any less clean or efficient than using natural gas directly in our homes or businesses?  Energy efficiency is the key.  Did you know that the delivery of natural gas through underground pipelines to homes and businesses is far more efficient than the process of converting natural gas – or any other fossil fuel energy – to electricity and then transporting that electricity over wires to those same homes or businesses?  In fact, the process of producing and delivering natural gas directly to the consumer is 90% efficient.  By contrast, the process of converting natural gas or any other fossil fuel to electricity and transporting that electricity to consumers is only about 30% efficient.

Finally, natural gas is an abundant domestic energy resource.  With proactive governmental policies that support access to new sources of supply and infrastructure development, we can meet our nation’s growing appetite for energy with this clean burning fuel and reduce our reliance on foreign imports.  This will help us enhance and protect our national energy security.

So, natural gas is good for energy consumers, our environment and our national energy security interests.  It truly is the comfortable and responsible energy choice.

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While natural gas supplies 23% of U.S. energy (about the same as coal) and 23% of world energy, there are two concerns that have created skepticism regarding the prospects for natural gas in the 21st century and beyond. Both are misplaced.

Can Natural Gas Power the World for Centuries to Come? The first concern goes to natural gas supply. The concern regarding supply originated in the 1970’s, a time when federal law required that natural gas production be price regulated. The result of that misguided effort were shortages that had nothing to do with the supply of natural gas in the ground and everything to do with the price that producers were allowed to charge to get that natural gas out of the ground. The price deregulation of natural gas production has led to an interesting development – the more natural gas we produce, the more natural gas we find that can be produced. Unconventional sources of natural gas that were once deemed impossible to produce now make up almost half of the natural gas we produce today. As we look to the 21st century and beyond, we now face the surprising reality that the future supply of natural gas in North America is almost un-measureable – and that it may well exceed the energy content of coal and oil combined. Much of that huge supply is in the form of frozen natural gas – methane hydrates. While many persons have assumed that methane hydrates could never be produced economically – as was once said of much of the other sources of natural gas currently powering our economy – the U.S. Geological Survey recently announced that it had produced methane hydrates in Alaska using conventional natural gas drilling technologies. While this development does not mean that we will see methane hydrates supplying any significant portion of U.S. natural gas supply in the next 10 to 15 years, it does mean that we need to think about a future North American natural gas supply that might last for many centuries.

What About Greenhouse Gas Emissions? This leads to the second concern regarding natural gas. Is there a role for a fossil fuel in a low-carbon future where the world seeks to reduce carbon emissions 80% below current levels? I believe that natural gas can and should be a major energy source in that low carbon future. Here’s why.

1. Today – Leading in Greenhouse Gas Emissions Reduction. While greenhouse gas emissions increase worldwide, natural gas utility customers have reduced their greenhouse gas emissions down to 1990 levels at the same time the number of customers has increased substantially. Natural gas distribution sector customers have largely achieved the goal today that president-elect Obama set for the U.S. economy for 2020. Pretty surprising for a fossil fuel.
2. Tomorrow – Poised to Continue Reducing Greenhouse Gas Emissions. Replacing higher greenhouse gas-emitting electric water heaters with high efficiency natural gas water heaters and replacing lower efficiency home and business heating appliances with high efficiency natural gas appliances will continue to reduce greenhouse gas emissions. To make that happen faster, we need increased federal tax credits and other programs to encourage moving to lower carbon footprint heating technologies.
3. Further into the 21st Century – A Natural Gas Low Carbon/Zero Carbon Future? All fossil fuels confront the need to reduce carbon emissions. But natural gas starts with a number of significant advantages:

1. It emits 45% less CO2 than coal and 30% less CO2 than oil.
2. It is composed primarily of clean hydrogen – natural gas (methane) consists of four hydrogen atoms and only one carbon atom.
3. Natural gas can be turned into hydrogen today.
4. With additional research and funding, it seems quite conceivable that the carbon in natural gas could be captured economically and much of the future economy could be fueled by hydrogen from natural gas.

What do you think?

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