Natural gas is America’s future energy source, the industry would have you believe. It is a vast resource unlocked by new technologies, meeting our power, industrial and possibly transportation needs for a century or more.
Cleaner to burn, it is the obvious choice over coal for power generation. Petrochemical companies are already repatriating billions of dollars for the construction of plants in the U.S. based upon cheap natural gas supply. More and more fleet-based trucks are being converted to compressed natural gas due to cost savings, with infrastructure for long-haul trucks in the works as well. It’s just a matter of time before natural gas has its day.
But hold that thought. What if there was a kink in that plan? What if natural gas was—gasp!—banned as a fuel source?
In fact, it already is, according to Christopher Guith, U.S. Chamber of Commerce senior vice president of policy for the Institute of 21st Century Energy. Natural gas, along with coal, are inevitable victims of the modified Clean Air Act.
Speaking at Hart Energy’s DUG Eagle Ford conference in September, Guith warned the impossible regulations on the power sector that are now squeezing coal out of existence as a feedstock will ultimately target natural gas as well. It’s only a matter of when, not if.
“(The Environmental Protection Agency) has to go after natural gas; that’s how the Clean Air Act works,” he said.
The catalyst is a 2007 Supreme Court decision that added greenhouse gas emitters to the list of pollutants targeted by the Clean Air Act. The act, enacted by Congress in 1970, was designed to target air pollutants harmful to the human body, typically carcinogens. However, beginning in 2011 (following the George W. Bush-era Supreme Court decision and implementation by the Obama administration), the EPA is now mandated to eliminate greenhouse gas (GHG) emissions as well, specifically CO2 and methane. Yes, methane, aka natural gas.
And the Clean Air Act is a zero-sum game.
“The Clean Air Act is designed to focus on a specific pollutant, then keep ratcheting down that pollutant until it is eradicated,” said Guith. “We are now on a path where, at some point, we will no longer use coal or natural gas to produce electricity.”
That is in spite of the fact that modern technology has created an overabundance of natural gas supply that is an “obviously natural choice” as an electricity feedstock.
“That has been turned on its head” with the implementation of Clean Air Act regulations, Guith said. Already, onerous regulations are making coal-fired power plants uneconomic to operate. Natural gas electrical generators are next, he alerted.
“At the end of the day, methane is still a fossil fuel. For the Clean Air Act to work, it has to go after methane too. It’s a certainty because that’s how the Clean Air Act works. Natural gas will start to feel a pinch in a very short time frame—2025 to 2030 at the latest.”
He makes the point that President Obama has been very clear that natural gas is a bridge fuel only. “That means there is an end to it.”
Guith said, “No one can say how long it will take, but it is an absolute inevitability that we’re on this course that we can’t divert from unless Congress changes the Clean Air Act. We will no longer use coal or natural gas for our electricity sector.”
While Guith’s comments addressed the power sector, it is not a far stretch to assume that if the EPA has the power and will to scrub hydrocarbon emissions from electricity production, it can go after emissions from the industrial and transportation sectors as well. The Partnership for a Better Energy Future, a coalition established in response to the Administration’s greenhouse gas regulatory agenda, sees regulations that are now crippling the power sector extending even further.
“What has begun with GHG regulations for power plants will eventually reach nearly every segment of the U.S. economy,” with inevitable regulations for refining, chemicals, natural gas development, iron, steel, pulp and paper, food production, aluminum, glass, brick and cement manufacturing, the organization said. Already, the EPA is targeting natural gas flaring via its Clean Air Act authority.
While it might seem farfetched that natural gas or other hydrocarbon usage could be eradicated from existence by government fiat, let the oil and gas industry be forewarned that the framework is in place and in motion for a battle ahead.
Only an act of Congress, it seems, can change the outcome.
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