Natural Gas and Greenhouse Gases—What’s the Connection?

01 October 2018
Dr. Jeff D. Makholm

In an upcoming article in the October 2018 issue of the Wiley journal Natural Gas & Electricity, NERA Managing Director Dr. Jeff D. Makholm examines the connection between natural gas and greenhouse gas (GHG) emissions. Former US Secretary of Energy and director of the MIT Energy Initiative Ernest Moniz has referred to natural gas as the “bridge to a lower-carbon planet,” which, if true, implies that producing and shipping more natural gas will incrementally reduce GHG emissions. Is that actually the case?

Since 2000, the Federal Energy Regulatory Commission (FERC) has somewhat quietly and methodically certificated about 400 new interstate gas pipeline capacity projects. Some have argued that all projects relying on fossil fuels contribute to climate change and that indirect effects of certificating new interstate natural gas capacity projects should be quantified and assessed as part of FERC proceedings. The FERC’s lack of specific procedure for evaluating GHG emissions was evident in two recent FERC actions: The Millennium Pipeline Case and the DTE Midstream Appalachia Case. The former assumed that emissions equaled the full combustion of the volume of gas capable of being transported by the pipeline projects, while in the latter, the FERC did not analyze information on upstream GHG impacts. Dr. Makholm notes, however, that a new pipeline will change the regional supply-and-demand conditions by providing lower-cost gas in areas served by the pipeline—potentially increasing the use and combustion of natural gas in that region. As a result, he suggests analyzing substitution effects and demand effects.

With respect to any particular pipeline capacity project that FERC may consider for certification, the overall net effect on GHG emissions is a complicated question. The net effect on GHG emissions depend on what fuels are displaced and on relative GHG intensities. Moreover, any one pipeline capacity project is merely a single element of an overall integrated energy system—including many sources of energy supply and many demanders. Dr. Makholm posits in his conclusion that the net effect of a new pipeline capacity project on overall emissions is uncertain and, indeed, could well be negative—reducing overall GHG emissions.

Makholm, Jeff D. (2018, October). Natural Gas and Greenhouse Gases—What’s the Connection? Natural Gas & Electricity 35/03, ©2018 Wiley Periodicals, Inc., a Wiley company.