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Stanford’s Natural Gas Initiative Charts Course of Natural Gas in a Future Decarbonized Energy System

26 October 2018

On the home page of the Natural Gas Initiative (NGI) website, Mark Zoback makes the case for the NGI at Stanford: “The goals of the NGI are not only to figure out how to get the gas out of the ground more effectively, but to make sure we do it in an environmentally responsible manner”. Zoback says due to hydraulic fracturing “we probably have 200 years of supply of natural gas (NG) around the world, but we’re not going to use all of the NG we have. We can use the NG in a transition from the energy system we have now to a decarbonized energy system in the future.”

The NGI sessions I attended on October 16 and 17, “Future Energy Systems: Natural Gas in a High Renewables, Decarbonized World” were certainly not a closed-minded meeting of industry advocates. In line with Zoback’s vision, the conference adopted the societal goal of limiting global warming, and charted NG’s role as a transition fuel, ultimately exploring roles of gas in a fully decarbonized energy system. Indicative of this, for the opening keynote, Brian Davis of Shell reviewed Shell’s Sky scenario, a vision of a net-zero emissions world by 2070. Though the report has been highly criticized by environmental activists, there is no doubt that it is ambitious. Nonetheless, it was an interesting start to the conference, speculating on ways in which the primary product of the industry will be replaced!

There is no doubt in the value of NG as a so-called “transition fuel”. Since the US energy renaissance in 2008, when Mitchell Energy began using hydraulic fracturing and effectively unlocked trillions of cubic feet in gas resources, US power sector emissions have been on the decline. However, in the long term, NG is not compatible with a net-zero world that avoids the dire effects of global warming, as highlighted in the IPCC’s recent special report. As Shell’s Sky scenario recognizes, a cornerstone of the energy transition is rapid and widespread electrification. To reach net zero goals, any technologies that require thermal combustion for power should be converted to use electricity if possible. Clear candidates include light duty vehicles (battery electricity) and home heating (heat pumps). However, electrification has its limits, and here is where the conference turned to next: difficult to decarbonize sectors include aviation, shipping, heavy industry, and load following electricity. Recognizing these challenges, a key focus of conference panels and keynotes was how NG and its infrastructure can contribute to solving these difficult to decarbonize pathways.

Two panel sessions on Tuesday, “Gas integration in regions with high penetration of intermittent renewables” and “Gas peakers versus storage” discussed the important role of flexible gas power in a near-decarbonized electricity grid. Currently the average large battery storage installation in CAISO has an average duration of 4 hours. Storage durations are substantially smaller in the rest of the US. Because of the variable nature of wind and solar, higher capacity and longer duration battery storage is required as shares of renewables grow. According to Zach Ming of E3, the loss of load probability [or likelihood that demand will exceed supply] in 2050 will be driven by the “dark doldrums in winter”, where sustained overcast periods with light winds could last for multiple hours to days. Batteries might be good for filling in short term fluctuations in renewables generation, but filling in multi-day periods of low generation is a “different market”, according to Scott Ison of Origin Energy. In a zero to low carbon future, the panel envisioned a fleet of small flexible gas plants (likely equipped with carbon capture and storage, CCS), operating at a low capacity factor.

In addition to filling in for variable renewables, NG infrastructure can also provide a form of long-term storage when generation is high. These options, termed power-to-gas (P2G), were discussed in the panel “Long term energy storage” on Thursday. According to the moderator, Stanford professor Tom Jaramillo, “at different time scales, the forms of storage are very different… if we’re talking seasonal scale, lithium-ion can’t really do it, this is where P2G comes in”. P2G involves the conversion of electricity to a gaseous fuel. Pathways described by Jaramillo include (but were not limited to) power-to-hydrogen and power to renewable natural gas (RNG). The first pathway involves electrolysis, where surplus power from renewables is used to power the decomposition of water into hydrogen and oxygen. Hydrogen can then be injected into the NG grid, effectively lowering the overall carbon emissions of the grid. The second pathway involves the process of methanation, where hydrogen is combined with carbon dioxide to produce a stream of RNG. As Jaramillo concluded: “could the future of long term energy storage look more like a chemical plant than a lithium ion battery?”

In addition to the methanation process RNG can also be produced biologically. Biogas, the gas produced from the decomposition of solid waste at landfills or manure at farms, can be treated and injected into the NG grid. During Tuesday afternoon’s panels “Decarbonizing natural gas” utility executives from National Grid, Southern California Gas, and Pacific Gas and Electric, weighed in on the future of a decarbonized gas pipeline. Panelists were surprisingly enthusiastic about the potential for RNG as a pathway to a low-carbon gaseous fuels portfolio. However, they noted substantial barriers to development, including competition with current government incentives for transportation use cases. The state legislature in California recently passed legislation (SB 1440) which will result in a Renewable Gas Standard (RGS) similar to a Renewable Portfolio Standard for the electric power sector. Under this incentive structure, the gas utilities of California were willing to pay an additional $15/MMTBU for renewable gas, compared to (and in addition to) the current market price for NG of $3/MMBTU. This incentive, when implemented in tandem with long-term off-take contracts, could provide the kickstart that this industry needs in California. In addition to RNG, utility executives seemed optimistic about the prospects for hydrogen addition to their pipeline systems, at blends of up to 10% by volume. Hydrogen blending has typically been considered a fringe idea of the future, however the gas utilities present at NGI seem adamant that they view the decarbonization of their gas pipeline as imperative and are willing to push the bounds of convention towards a multi-fuel, zero-carbon gaseous energy delivery network.

The energy sector faces a remarkable challenge in transforming itself in line with climate objectives. Given the scale of the problem, our chances of success are highest if all options are on the table. Continued use of NG offers both economic benefits (by taking advantage of storage capacity in the existing grid) and strategic benefits (by complementing variable renewables). Climate outcomes improve if we can steadily decarbonize the grid through RNG or hydrogen injection. As George Minter of SoCalGas stressed at the symposium (referring to electricity and gas grids), “it’s not either/or, it’s both”.

Jeff Rutherford and Greg Von Wald are both PhD students in the Department of Energy Resources Engineering at Stanford University.

Photograph by: Kriplozoik, (https://commons.wikimedia.org/wiki/File:Natural_gas.jpg)