Despite sometimes being in competition, the relationship between natural gas and the power grid is destined to become more intertwined. As an ally, natural gas is cleaner than coal, is an abundant domestic resource for generating energy, and its profile in providing steady output to offset the variability of renewable power will greatly increase as the clean energy portfolio expands. As a foe, natural gas is a leading alternative to electricity for cooking, heating homes and water, drying clothes, and even in transportation.
During last week's Utility of the Future conference hosted by Kema, natural gas played a prominent role in many of the discussions focusing on how utilities can become more efficient, sustainable, and reliable. Combined cycle natural gas plants are seen as the most cost-effective partner in expanding the use of solar and wind power, and GE is betting big that the synergies between the technologies will play a leading role in reducing the carbon footprint of power generation.
Echoing this sentiment is an exhaustive study by MIT trumpets the potential of natural gas in CO2 emissions reductions. "Natural gas-fired power capacity will play an increasingly important role in providing backup to growing supplies of intermittent renewable energy, in the absence of a breakthrough that provides affordable utility-scale storage," report the MIT study. Currently the cost of natural gas generation sets the price in many regions for energy storage or other alternatives to compete in the ancillary services market.
Thanks to the lessening interest in coal and nuclear power because of environmental concerns, natural gas exploration is experiencing a renaissance in the U.S., with many calling for investment in domestic and foreign pipelines. Several of the conference speakers expressed reservations about investing in natural gas infrastructure if carbon reductions requirements aimed at 2020 and beyond would eventually reduce demand for natural gas.
Natural gas proponents have called for the rapid expansion in tapping the huge reserves contained within the Marcellus shale deposit using hydraulic fracturing. The concerns over the environmental impact of fracking are growing by day including at the EPA, but a roundtable panel was dismissive saying on several occasions that fracking occurs well below the water table and that it was "only a PR problem."
However, the MIT report is spot on recognizing the simple fact that to get the mix of corrosive chemicals and water used in fracking into the ground and the gas out of the ground, you have to penetrate the water table. The report states that "There is, however, evidence of natural gas migration into freshwater zones in some areas, most likely as a result of substandard well completion practices by a few operators... [and] additional environmental challenges in the area of water management, particularly the effective disposal of fracture fluids.
While burning natural gas has the potential to play a leading role in making the grid more sustainable and reliable, the acquisition of that gas must be equally viewed as reducing the environmental impact.
John Gartner is Senior Analyst at Pike Research and a Co-Founder of Matter Network.