ICYMI: Energy Fairness Executive Director Paul Griffin authored an article on the importance of oil and gas for electricity generation for The Daily Sentinel. The original piece can be viewed here.
On May 18, the International Energy Agency (IEA) released a report urging world financiers to abandon any further investment in developing new oil and natural gas projects. The IEA sees this as a critical step to reaching net-zero emissions by 2050. However, the IEA report ignores a number of realities, ones that policymakers shouldn’t. Of course we must take action to further reduce emissions, but our modern economy also needs access to affordable and reliable energy like oil and natural gas.
The IEA report claims to be “the world’s first comprehensive study of how to transition to a net-zero energy system … while ensuring stable and affordable energy supplies …” That’s a strong claim, especially since the report essentially dismisses the crucial role natural gas has played in reducing emissions and supporting renewables like wind and solar. It encourages the abandonment of natural gas rather than further leaning into its advantages,
For example, the U.S. Energy Information Administration (EIA) found in November 2019 that shifting from coal to natural gas for electricity production from 2005 to 2018 resulted in 2,823 million metric tons of carbon dioxide emissions savings. During the same period, renewables-related emissions savings totaled 1,799 million metric tons. In other words, using natural gas for electricity resulted in 57% more emissions reductions than renewables did. The facts don’t lie.
Overall, in large part because of more natural gas use, the EIA found that carbon emissions dropped 28% between 2005 and 2017. Similarly, the Environmental Protection Agency (EPA) and IEA reported U.S. GHG emissions are now at the lowest level since 1992.We’re clearly moving the needle in the right direction.
Perhaps this is why Columbia University’s prestigious Center on Global Energy Policy recently published a report concluding that investments in the domestic natural gas pipeline network could accelerate U.S. emissions goals. The Center’s report aptly notes “there is no quick replacement for gas …” and “… investments in existing [natural gas] infrastructure can support a pathway toward wider storage and delivery of cleaner and increasing low-carbon gases while lowering the overall cost of the transition and ensuring reliability across the energy system.”
Reliability is crucial, in part because natural gas is an indispensable backstop for renewables. The unique flexibility of natural gas power plants to turn on and off within minutes means gas quickly matches supply and demand for intermittent renewables. According to the University of California Berkeley’s 2035 Report, “existing natural gas plants cost-effectively compensate for remaining mismatches between demand and renewables-plus-battery generation.” Natural gas fills the void when the wind isn’t blowing, and the sun isn’t shining. That’s something the green lobby should be applauding.
Of course, natural gas isn’t the only fossil fuel under attack by the IEA. The group’s report also calls for “ensuring no new passenger cars running on internal combustion engines are sold globally from 2035 …” To fill this void, electric vehicle sales would have to increase from around 5% of global car sales to more than 60% by 2040. With this lofty goal in sight, abandoning future investment in oil and gas makes sense, right? Not so fast.
Even the IEA in 2016 estimated that if 50% of all new cars were electric, petroleum use would continue to grow because of “trucks, aviation and the petrochemical industry and we don’t have major alternatives to oil products there.” In other words, the transition to an electric car fleet has been impressive, but there aren’t viable long-term electric alternatives to trucks and commercial planes. Keep in mind, too, that global air travel increased 136% between 2004-2019.
Even without electric alternatives to trucks and commercial planes, the U.S. would still need to ante up $87 billion to construct the charging infrastructure necessary to achieve 100% passenger electric vehicle sales in the U.S. by 2035. It’s almost unimaginable to project the investment needed to build a similar infrastructure for trucks and planes.
Across the global economy, fossil fuels supply almost four-fifths of total energy supply today, but that would have to fall to just over one-fifth by 2050 if we pursue IEA’s vision. While this may be achievable for some nations, demand from developing countries in Asia and Africa need natural gas and traditional fuels. If new development were halted as the IEA wants, global oil demand would outstrip supply by more than 50% in 2040. The IEA’s own Sustainable Development Scenarios finds that natural gas and oil will continue to comprise nearly half of the world’s energy mix through 2050.
The facts don’t lie. We’ll need oil and natural gas to move confidently into the future. IEA should be embracing investment in oil and gas development, not discouraging it. So should those setting national and state energy policy.