Natural Gas: Power and Climate

From the Archive—In case you missed's a look back at the October 2014 issue of EM, which recent energy developments and forecasts for overall implications for air pollution and climate with an emphasis on natural gas use.

by John Bachmann

Coming to the U.S. Environmental Protection Agency's (EPA) air office in the midst of the energy crisis in the early 1970s, one of my first projects involved the “Clean Fuels Policy,” which was prompted by new energy and Clean Air Act legislation. That legislation required that the federal Energy Administrator prohibit any power plant from burning natural gas or oil, if the conversion to coal was feasible and environmental standards were maintained. Concerned by the lack of progress, as well as continued gas shortages, Congress passed new legislation superseding this law that banned the use of natural gas for new power plants and encouraged curtailment of its use in existing plants after 1990.

The causes of the twin energy crisis of that era were complex, but it is the case that U.S. production of both oil and natural gas peaked in the early 1970s. While the oil embargo of 1973 triggered the crisis in global oil and gasoline supply, the contemporaneous shortages of natural gas in the United States are generally regarded as caused by federal price controls. Indeed, U.S. natural gas production continued to decline until the late 1980s, following a two-step process deregulating wellhead gas prices in 1985 and 1989. Trends in natural gas use for electrical generation were similiar, falling from a peak in 1971 to lows in the late 1980s. The 1990 U.S. Clean Air Act contributed to an increasing use in the power sector that by the late 1990s had passed the 1971 peak.

Without price controls, production expanded until the turn of the century, with the even faster increase in demand met by Canadian imports. But production declined between 2001 and 2005 and prices soared. A 2003 article in Time decried the “first big energy squeeze since the 1970s” in an article titled, “Why U.S. Is Running Out of Gas.” Federal Reserve Chairman Alan Greenspan told Congress that he saw the likelihood of increased imports of liquefied natural gas. At that time, no one forecast the dramatic increase in natural gas production from deep shale formations that by 2011 had already passed the former U.S. production peak of 1972.

The increasing supply of shale gas made possible by hydraulic fracturing has already resulted in benefits for the economy, energy security, and the environment. In the power sector, lower prices have increasingly prompted switching from coal to gas in order to meet more stringent targets for emissions of sulfur, nitrogen oxides, and mercury. Yet questions remain as to how long this boom can continue to supply increasing demand for power generation, the public's concern about local impacts of increased production, as well as the implications of current and future air pollution and greenhouse gas regulations on production and end use.

The July 2014 issue of EM discussed broad questions for a sustainable energy future, as well as the debate over potential local environmental impacts. This issue focuses on additional issues related to the power sector, climate, and permitting.