Monday, March 26, 2012

Natural Gas versus Coal for Power Generation

Here's information, somewhat dated, on the subject from an EPA website:
"At the power plant, the burning of natural gas produces nitrogen oxides and carbon dioxide, but in lower quantities than burning coal or oil. Methane, a primary component of natural gas and a greenhouse gas, can also be emitted into the air when natural gas is not burned completely. Similarly, methane can be emitted as the result of leaks and losses during transportation. Emissions of sulfur dioxide and mercury compounds from burning natural gas are negligible.

The average emissions rates in the United States from natural gas-fired generation are: 1135 lbs/MWh of carbon dioxide, 0.1 lbs/MWh of sulfur dioxide, and 1.7 lbs/MWh of nitrogen oxides.1 Compared to the average air emissions from coal-fired generation, natural gas produces half as much carbon dioxide, less than a third as much nitrogen oxides, and one percent as much sulfur oxides at the power plant."

With interest rates at historical lows, construction costs cyclically lower and generationally low gas prices, one wonders why the power generation industry doesn't convert significant portion of its fleet of older, coal fired electricity plants into gas fired capacity.  While there has been progress made in burning coal differently and better, this switchover isn't progressing quickly either. According to the Union of Concerned Scientists, we still have 600 coal-fired plants producing 54% of our electricity.  If hydraulic fracturing raises environmental concerns, carbon capture/sequestration is probably even more complex. 

Since electric utilities are so heavily regulated, I'd argue that we have a regulatory failure here.  What kind of regulatory regime do we need to incentivize utilities to rapidly switch more power generation capacity to widely available, cheaper and more environmentally friendly fuels?  Lack of clarity in  the government's regulatory stance may be what's holding back  investment in conversion.

And, while we're at that, what about a Marshall Plan for building the next generation power grid? 

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