Natural Gas and Climate Policy

Natural Gas and Climate Policy Laser Talk

Question:  Where does natural gas fit in climate policy?

Answer:  Burning natural gas for power or heat produces CO2 and certain air pollutants, but significantly less than coal or oil for the same amount of energy delivered. [1] When burned for electricity, that advantage widens because natural gas power plants today are far more energy-efficient than coal plants. [2]

Unlike coal, though, natural gas can leak into the air at various stages of its supply chain. When that happens, its main component – methane – is a far more potent greenhouse gas than CO2. [3] Estimates of ‘fugitive emissions’ vary from 1.2 to 3.3 percent of natural gas consumed, [4,5] A 2015 analysis of life-cycle emissions concluded that replacing coal-generated power with natural gas power reduces GHG emissions by 37 to 58 percent, [6] but that leakage is still a big concern.

Carbon fee and dividend bills vary in their approach to methane leakage. Some expressly stipulate that methane emissions must be taxed, while others leave that decision up to regulators. A separate tax on industrial methane emissions has also been proposed. [7] In all cases, measurement and attribution of leakage will be technically challenging. [8]

There is also a separate active program – the ‘Quad-O rules’ – to reduce methane emissions through EPA regulation. [9]

CCL holds that a 100 percent cut in net greenhouse gas emissions by 2050 is necessary to achieve a livable future. It’s difficult to predict what role natural gas can play and still reach that target. Should natural gas serve as backup for intermittent renewables like wind and solar? [10] Can it be safely managed with CO2 capture and sequestration? [11] Should it be used in transportation? [12]

CCL’s view is that an aggressive carbon price will compel the energy marketplace to answer these questions in the most effective, efficient, and long-lasting way.

In a Nutshell: Natural gas is substantially less emissions-intensive than coal, but only if methane leakage is substantially reduced. While transitioning our economy to net zero greenhouse gas emissions, a rising carbon fee is the most effective, efficient way to answer the question of what role natural gas will play in that transition.

  1. “Emissions Factors for Greenhouse Gas Inventories.” U.S. EPA (4 Apr 2014).
  2. “What is the efficiency of different types of power plants?” U.S. Energy Information Administration (10 May 2017).
  3. “Understanding Global Warming Potentials.” U.S. EPA (accessed 24 Apr 2018).
  4. “Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2016: Executive Summary.” U.S. EPA (12 Apr 2018).
  5. Howarth, R.W. “A bridge to nowhere: methane emissions and the greenhouse gas footprint of natural gas.” Editorial in Energy Science & Engineering2:47-60 (15 May 2014).
  6. “Life-Cycle Greenhouse Gas Assessment of Coal and Natural Gas in the Power Sector.” Congressional Research Service Report R44090 (26 Jun 2015).
  7. Melvin, J. “Proposed methane fee for now remains intact in US Senate’s draft reconciliation bill.” S&P Global Platts (16 Dec 2021).
  8. “Methane Research Series: 16 Studies.” Environmental Defense Fund (2012-2018).
  9. Tsang, L. “EPA’s Methane Regulations: Legal Overview.” Congressional Research Service (24 Jan 2018).
  10. Kraft, A. “How Competition of Renewables vs. Gas is Evolving.” PointLogic Energy (30 Aug 2017).
  11. Patel, S. “Breakthrough: NET Power’s Allam Cycle Test Facility Delivers First Power to ERCOT Grid.” Power (18 Nov 2021).
  12. “Natural Gas Vehicles.” U.S. Department of Energy Alternative Fuels Data Center (18 Apr 2017).

This page was last updated on 01/05/22 at 12:04 CST.