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April 02, 2013 12:28 PM Natural Gas and Renewables: Not Enemies?

By Ed Kilgore

Dave Roberts has a long and important post at Grist today discussing the relationship of shale gas and renewable energy sources, playing off a new Citigroup analysis suggesting that greater use of the former could actually promote the eventual ascendance of the latter:

Banking giant Citigroup recently issued a report [PDF] that ought to thrill fans of renewable energy. However, tucked inside the good news is a pill that some greens will find difficult to swallow.
The good news is that Citi expects renewable energy to triumph; it believes that typical forecasts like those from the International Energy Agency are too pessimistic. Contrary to a certain strain of conventional wisdom, it says, shale gas will not crowd out renewable energy. Quite the opposite.
The pill? Citi expects it will take lots of natural gas — more than we’re currently using, in the medium term — to get to a power system run primarily on renewables. In fact, renewables and shale gas are in a “symbiotic” relationship, the report says, each helping the other increase market share. If that’s true, a moratorium on fracking, called for by many greens, might serve to inhibit the spread of renewable energy.

Roberts goes on to evaluate the Citi report, mostly positively, and argues that expanded natural gas use will be necessary not only to supply power needs renewables aren’t yet ready to assume (particularly in non-peak usage times), but also to serve as a back-up source propping up necessary power plant capacity. But for the “symbiotic relationship” between shale gas and renewables to emerge, the former needs to get somewhat more expensive while the latter gets continuously cheaper.

That’s what Citi drills into: whether renewables are getting cheap enough, fast enough, to enter into this mutually reinforcing cycle with natural gas.
Good news: They are!
Shale gas, despite its triumphal reputation, faces substantial uncertainties. If methane emissions from fracking turn out be as bad as some of the high-end estimates, there could be serious environmental regulations coming down the pike. And the price of natural gas will not stay low forever. Citi estimates it will rise from its current absurd lows of $3 or $4 per MMBTU to around $5 or $6 or even $7, and that’s in the U.S., where it’s super-cheap. In other regions it is already considerably more expensive than that, and will stay so for the near future.
Renewables, meanwhile, are steadily, predictably heading down the cost curve toward “grid parity,” that moment when they are competitive with coal and natural gas without subsidies.

So Roberts is suggesting that supporters of clean energy should shift from a strategy of all-out opposition to fracking for natural gas to one of allowing it with strict emissions regulation (which will not only address fears about fracking but will also usefully boost the cost of natural gas enough to help make renewables competitive) with the goal being rapid reduction in coal and oil for power generation and a reasonably quick transition to the renewables-dominated future.

This strategy is certainly in line with what two recent Washington Monthly writers have suggested: Jeffrey Leonard’s November/December 2012 article urging exploitation of shale gas in combination with a major upgrading of the power grid as a pathway to clean and affordable energy; and Anne Kim’s March/April 2013 piece on prospects for “insourcing,” which notes relatively cheap natural gas is becoming a crucial competitive advantage for the U.S. in securing manufacturing jobs. There’s support for Kim’s argument in a WaPo article by Michael Birnbaum yesterday that reports on the relocation of manufacturing plants from Europe to the U.S., primarily attributable to cheaper natural gas.

If Roberts is right, energy politics can and should break through an all-or-nothing choice between a renewables-based future we cannot yet reach, and the rejection of clean energy entirely as too expensive or too self-sacrificing (or too attentive to climate change science that contradicts the Lord’s plan to bring about the End of the World, or whatever). It would certainly be nice to see some virtuous cycles in energy policy instead of the Right’s vicious cycle of atavistic economic and energy practices.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

Comments

  • Josef K on April 02, 2013 12:39 PM:

    It would certainly be nice to see some virtuous cycles in energy policy instead of the Right’s vicious cycle of atavistic economic and energy practices.

    Is there anyone or anything on the right-end of the dial even capable of anything else?!?

  • Domage on April 02, 2013 12:55 PM:

    Oh, I'm sorry. Fracking for shale gas has such incredible environmental downsides that it should be banned.

    In just the short time it's been in widespread use, we've found that it destroys aquifers and water supplies wherever it's done. Given that much of the nation may soon be facing critical water shortages due to climate change, does make any sense whatever to tamper with our groundwater for something so ephemeral as short-term energy extraction?

    And now that solid evidence has surface (so to speak) that fracking and fracking-wastewater injection wells cause earthquakes, I have to wonder just how much of the country we want to turn into an inhabitable wasteland in exchange for $10/hour jobs and cheap pool toys.

  • c u n d gulag on April 02, 2013 1:23 PM:

    Renewable energy sources also include water, which, even during this period of severe drought, we're asked to sacrifice to keep fracking away.

    So, on top of figuring out what to do about all of the potable water fracking uses, and even if we're going to be able to figure out how to make fracking-caused earthquakes a renewable energy source, I'm still against fracking.

  • SecularAnimist on April 02, 2013 1:55 PM:

    Ed Kilgore wrote: "If Roberts is right ..."

    Roberts is wrong. He has fallen for the fossil fuel industry's propaganda.

    First of all, we need to end ALL fossil fuel use as soon as possible -- NOT dig up more of the stuff and invest in new infrastructure to transport it and burn it. This is especially true of fracked natural gas, which contrary to fossil fueled propaganda, has life-cycle CO2 emissions comparable to those from coal, PLUS the massively destructive toxic pollution from fracking itself.

    Second, there is no need whatsoever to expand natural gas extraction and use in order to scale up renewable energy (principally solar and wind). In fact, the contrary is true.

  • marc sobel on April 02, 2013 6:07 PM:

    Okay, I have a deal for you. We can develop a lot more natural gas. Maybe enough so that combined with renewables, we can stop using coal. The only problem is a whole lot of scientists say that it will poison our water supply and the oil companies keep them from getting the data they need to assess the risk.

    Deal?

  • Conrad Dunkerson on April 04, 2013 7:59 AM:

    While I'm not a big fan of fracking, some of the objections to it are overwrought.

    Emissions - Yes, there is certainly some untracked methane leakage due to fracking. However, we monitor atmospheric methane levels and they have been essentially flat for many years now. Ergo, the methane leakage from fracking is NOT some huge amount which puts their greenhouse effect back on par with coal. Using natural gas for energy produces MUCH less greenhouse gas warming than coal or petroleum.

    Earthquakes - Fracking unquestionably triggers earthquakes, and not 'just small earthquakes' as they now claim as a fallback position. However, it is somewhat incorrect to say that fracking CAUSES earthquakes. The fault stresses were already there. They would have given way in an earthquake eventually. Thus, what fracking does is to trigger earthquakes earlier than they would have happened naturally... which means they have less energy built up. In short, fracking is exchanging large earthquakes in the future for smaller earthquakes now. Which, on balance, is actually a good thing.

    Groundwater - The objections here are entirely accurate and the industry should be subject to regulations forcing them to use cleaner (though more expensive) processes.