Study Sheds Light on the Environmental Impact of Shale Gas

• The view that methane leaks render shale gas "worse than coal" has been further undermined by the release of a new study based on actual measurements at hundreds of gas wells.
• Previous estimates of methane leakage relied on modeling or extrapolation from remote measurements. The University of Texas study addresses these shortcomings.

Since the late 1990s natural gas has been identified by both energy experts and environmentalists as a likely "bridge fuel" to facilitate the transition to cleaner energy sources. This view has recently been challenged by suggestions that methane leakage from natural gas systems--particularly from shale gas development--might be significant enough to negate the downstream climate benefits of switching to natural gas. The results of a new study from the University of Texas, sponsored by the Environmental Defense Fund (EDF) and nine energy companies, should alleviate many of those concerns.

In order to understand why indications of potential natural gas leakage rates well above the previously assumed level of around 1% would cast doubt on the environmental benefits of gas, a brief primer on greenhouse gases (GHGs) is necessary. When present in the atmosphere, these gases contribute to global warming by trapping infrared radiation that would otherwise be emitted to space. Carbon dioxide is the primary GHG implicated in climate change. It currently makes up roughly 400 parts per million (ppm)--equivalent to 0.04%--of earth's atmosphere and is increasing by around 2 ppm per year.

The main constituent of natural gas is methane. Although atmospheric concentrations of methane are much lower than that of CO2, totaling less than 2 ppm, pound for pound it is a much stronger GHG. Its "global warming potential" is 25 times higher than CO2's over a 100-year time horizon, and even higher on a shorter time span. While most atmospheric methane has been traced to natural or agricultural sources, a large increase in atmospheric methane from natural gas production could overwhelm the undisputed downstream emissions benefits of gas in  electricity generation, compared to coal.

Several academic studies raised precisely this concern with regard to natural gas produced from shale by hydraulic fracturing, or "fracking", starting with a widely-publicized paper from a professor at Cornell University in 2010. This work relied on estimates and limited data from early shale production to arrive at a conclusion that shale gas wells leak 3.6-7.9% of their cumulative output. A more recent series of studies from the National Oceanic and Atmospheric Administration (NOAA) and the University of Colorado Boulder used airborne remote sensing techniques to calculate leakage rates similar to Professor Howarth's.

Other studies from groups as diverse as IHS CERA, Carnegie Mellon University, and Worldwatch Institute and Deutsche Bank addressed the same question but arrived at much lower leakage rates and impacts. And earlier this year the US Environmental Protection Agency reduced its previous estimate of overall natural gas leakage to a figure equivalent to 1.7%.

However, until now all scientific studies of this issue--on both sides--were based on limited data, or on indirect measurements obtained at a significant distance from actual production sites. They relied heavily on assumptions about what was happening at large numbers of gas wells, in the absence of direct observations at these sites.

That's what makes the UT study so significant; it is based on a wealth of data from actual, on-site measurements at "190 production sites throughout the US, with access provide by nine participating energy companies." That translates to roughly 500 shale gas wells in different stages of development and production. 

Overall, for the segment of the gas lifecycle they investigated, the UT team found methane emissions that were lower than EPA's latest estimates.  Emissions from "completion flowbacks" were  98% lower, partially offset by somewhat higher observed leaks from valves and other equipment. Although this study did not measure emissions from the entire gas lifecycle, including pipelines, it would be very hard to reconcile their observed average leakage rate of 0.4% of gross gas production with leakage estimates as high as those embraced by many of shale's critics.

Immediate criticisms of this study also missed several crucial points. First, without the industry involvement that they characterized as a "fatal flaw", access on this scale for direct measurements at production sites--surely the gold standard for emissions studies compared to estimates based on assumption-laden models--would have been difficult or impossible to obtain. More importantly, they also ignored the fact that the principal sources of methane emissions found by the UT team involved valves and equipment by no means unique to shale development, many of which should be amenable to hardware improvements or different technology choices.

While the UT team and their sponsors at EDF stated clearly that more work needs to be done to measure methane emissions from other parts of the gas value chain, the current paper convincingly dispels the notion that the emissions from shale gas development are inherently much higher than those for gas produced from vertical wells in conventional oil and gas reservoirs. Since shale gas already accounts for over a third of US natural gas production and is widely expected to dominate future production, that result has large implications for the environmental benefits of further fuel switching and other applications for natural gas.

A different version of this posting was previously published on the website of Pacific Energy Development Corporation.

The Golden Age of Natural Gas

A regular reader of this blog kindly sent me a link to the International Energy Agency's new study on global natural gas, to which he contributed. The report, entitled, "Are We Entering A Golden Age for Gas?" was launched with a press conference yesterday in London. It presents a scenario in which gas use grows rapidly due to faster demand growth, particularly in the developing world, increased supply from unconventional sources such as shale gas, and a slower expansion of nuclear power in the aftermath of the Fukushima Daichi accident. Its key findings envision gas providing 25% of world energy by 2035, up from 21% today, and eclipsing the share of coal before 2030, with corresponding benefits for global greenhouse gas emissions.

The IEA's presenters were careful to point out that they are not proposing this view as the likeliest scenario, but as an offshoot of their primary World Energy Outlook scenario published last fall, which incorporated the commitments at the Copenhagen climate conference. The new gas scenario depends on a number of uncertainties, including the resolution of some of the concerns about the environmental impacts of unconventional gas production, along with the realization of carbon-intensity and gas-development targets in places like China. However, it doesn't depend on new technology or dramatic changes such as a massive move to natural gas for vehicle use. (The latter is presented as a "High Impact Low Probability" sensitivity.) Its big shifts occur in the big existing gas market segments, for power generation globally and for industry and buildings in the developing world.

I was struck by several elements of the scenario. First, although much of the focus on unconventional gas has been on North America, where many of the techniques were pioneered, this is very much a global story. The IEA shows estimated unconventional gas resources from shale, "tight gas" and coal-bed methane that exceed conventional gas resources in Asia and Africa and rival them even in Eastern Europe/Eurasia. On the strength of its unconventional resources China could become the world's third-largest gas producer by 2035, behind Russia and the US. So even if the US plaintiffs bar attempts to turn "fracking" into the next tobacco or asbestos, unconventional gas exploitation will likely progress elsewhere. At the same time, increases in conventional gas production are expected to exceed those from unconventional sources, by 60/40 over the period studied. That requires big increases in LNG production in Australia and a substantial increase in pipeline capacity linking Russian and Central Asian gas to markets in Europe and Asia. It's also worth noting that despite the shale gas bonanza, the IEA doesn't envision the US becoming a net gas exporter.

As one of my mentors frequently reminded me, natural gas doesn't get developed without a market, and in this scenario the biggest source of new demand is in power generation, where the combination of lower gas prices and the 60% thermal efficiency of combined cycle gas turbines makes gas highly competitive, even with coal. It's less clear whether gas is taking market share from new nuclear based on price, or mainly filling the gap that the response to Fukushima is leaving in some markets. From what I heard on a power industry webinar yesterday, the former is a significant factor, at least in the US. The strong connection between gas and power is another reason why so much of the growth in gas demand--80% by the IEA's estimate--is expected to occur in developing countries including China and India, where electricity demand is expanding at rates that the US and Europe haven't experienced for years or decades. Perhaps the most startling forecast in the report is that China's gas demand could grow from roughly matching Germany's today to about the level of the entire EU in 25 years. That would be supported as much by additional imports as from domestic unconventional gas output.

As I'd have expected, the IEA provided a sober assessment of the environmental implications of their scenario. Increasing the share of gas in global energy demand reduces global GHG emissions by 160 million tons of CO2 equivalent by 2035--less than 1% of total emissions--by substituting for coal and some oil. That's a lot less than if the extra gas didn't also contribute to higher energy demand by keeping electricity prices lower, while outcompeting some lower-emission renewables and nuclear projects. The IEA states plainly that relying on more gas is not a silver bullet for climate change, although it is a positive step.

In addition to pointing out the need for safe handling of the fluids involved in hydraulic fracturing, the report also specifically addresses the critique of Howarth and others concerning the direct emissions from shale gas production. The IEA found that CO2-equivalent emissions for shale gas from well to burner exceed those for conventional gas by 3.5%-12%, depending on whether the methane liberated during well completion is captured, flared or vented to the atmosphere. Even at the high end, that does not negate gas's emissions advantage over other fossil fuels, especially when power generation efficiencies are factored in. The report's authors apparently see most of the excess emissions compared to conventional gas production as representing an opportunity that can be captured with current technology and best practices.

The IEA put a price tag on this shift to gas: a cumulative $8 trillion through 2035 , nearly $1 trillion higher than the gas infrastructure investment in their global energy scenario of last fall. Those figures aren't as hard to fathom in the context of developed-country budget deficits and debt as they might seem, because they mainly reflect unsubsidized, economically attractive investments by publicly-traded and state-owned energy companies that are making healthy profits and have substantial cash flow on which to draw. Surprisingly, the IEA sees most of the incremental investment in gas coming at the expense of oil. Although they deliberately framed the title of their scenario as a question that hinges on a number of variables, the report comes across as a plausible and credible glimpse of our possible energy future.

Still Not Worse Than Coal

At the end of last year I examined assertions by a professor from Cornell University, based on his unpublished paper, that leakage from natural gas production and transportation systems in the US resulted in lifecycle emissions for gas that were actually worse than those from coal. From what I saw at the time, I couldn't agree with his conclusions. Now Professor Howarth's paper is apparently about to be published, with a specific focus on shale gas. It has already been leaked via the New York Times and The Hill news site. After seeing the data and calculations supporting its claims, I am still not persuaded, though I would be quick to concede that the subject deserves a more thorough assessment by a body actually equipped to gather the necessary data and process it rigorously.

I don't make a habit of reviewing scientific papers, but this one begs for a critique, for two reasons. First, it's appearing in the middle of a crucial national debate on the potential risks of the techniques involved in unlocking the potentially game-changing shale gas resources that have been found in the US and elsewhere around the world. What better way to make those risks--which I believe to be entirely manageable--seem not worth taking than by portraying shale gas as having more adverse environmental consequences than the chief fuel its supporters see it displacing: coal. So at a minimum the paper demands careful scrutiny because of its potential significance to the debate surrounding the largest energy opportunity the US has uncovered in decades.

In addition, practically every paragraph includes an assumption, simplification or choice by the authors that tends to increase the calculated environmental impact of natural gas. Whether that's the result of bias or merely a series of judgment calls, it undermines confidence in the final conclusions at the same time it amplifies them. I'll focus on the most significant of these decisions and forgo the questioning of many individually less-important, though still cumulatively consequential details for others better equipped to tackle them.

Probably the most significant choice the authors made was to emphasize the global warming impact of methane (the main component of natural gas) over a 20-year period, in preference to than the more commonly used 100-year interval. Then they bypassed the established Global Warming Potential (GWP) factors from the UN IPCCC's Fourth Assessment Report to use much higher factors for methane from a 2009 paper published in Science. I'll leave the angels-on-a-pin debate over this to the climate scientists, but I don't believe you need a Ph.D. in atmospheric physics to understand that if the outcomes of climate change will truly be determined in the next 20 years, we are already cooked. The world can't get global emissions down by enough, fast enough, to solve the problem on that time scale, at least not without a global economic shock that would return hundreds of millions of people to poverty. So when I recalculated the paper's estimate on shale gas emissions, I did so using the consensus 100-year GWP for methane of 25--less than 1/4 of the one on which the paper's scariest results rely.

The other major choice the authors made was to ignore the downstream conversion of gas and coal into electricity. As lifecycle analysis, this earns a failing grade. It's like comparing the overall emissions of a Nissan Leaf and Ford Explorer by focusing only on what happens upstream of the battery charger and the fuel tank. The authors dismiss this by saying that "this does not greatly affect our overall conclusion". That's wrong, not least because it's precisely the comparison of how gas and coal actually compete with each other that matters most here.

On the basis of these two points alone, the paper's conclusions crumble, even with the inclusion of supposed methane leakage rates from shale gas production that would have any engineer worth his or her salt scrambling to redesign the equipment so as to capture so much valuable "lost and unaccounted for" output. So how do shale gas and coal compare, on a full lifecycle basis from well and mine to the power plant bus bar, if 3.6-7.9% of gas actually leaked out during well completion, processing, transportation, storage and distribution, as Dr. Howarth's paper suggests?

Let's start at the power plant and work backwards. A current combined-cycle gas turbine unit requires around 6,700 BTUs of gas to generate a kilowatt-hour (kWh) of electricity. At the rate of 117 lb. of CO2 emissions per million BTUs of gas burned, that yields power plant emissions of 0.78 lb/kWh. But that's on the basis of the gas that reaches the turbine's combustor. We have to gross up that result to account for the emissions that occurred upstream of the plant. At Howarth's estimated leakage midpoint of 5.75%, and using the standard 100-year GWP for methane compared to CO2 on a molar, rather than mass basis, that leakage would add an extra 55% of CO2-equivalent emissions from the well to the combustor, bringing the effective emissions from that combined-cycle plant up to 1.2 lb/kWh. For comparison, the most efficient coal-fired power plant I know of (without carbon capture and sequestration) emits about 1.75 lb/kWh. Only if we included inefficient, simple-cycle gas "peaker" units that don't normally compete with coal would the upstream emissions that Dr. Howarth posits result in lifecycle emissions from gas-fired power worse than the typical coal-fired generation emissions of around 2 lb/kWh. In other words, the gas-fired generation that actually competes with existing coal plants still appears to emit nearly 40% less GHGs than its coal competition, even assuming the shale gas leaks that Dr. Howarth and his contributors reported.

Although my analysis admittedly falls into the back-of-the-envelope category, I'm not sure that the Howarth, et al paper is many notches above that level, given its reliance on non-peer-reviewed sources and its references to irrelevancies like Soviet-era gas systems. All in all, it seems a shaky edifice on which to mount such provocative conclusions. Perhaps all the authors wanted to do was to highlight some areas for the gas industry to investigate further, in order to ensure that methane emissions are kept to a minimum as shale and other unconventional gas deposits are developed. Unfortunately, it seems all too likely that its headline findings will be touted by those who are determined to stop the shale gas revolution in its tracks, or at least delay it for long enough that its utility in addressing our pressing energy problems will be lost. I wonder what Mr. Pickens thinks about all this, given that legislation promoting his plan to convert portions of the US truck fleet to natural gas, which depends on abundant shale gas supplies, has finally attracted bi-partisan support, including from the White House.

Worse than Coal?

As I noted in last Wednesday's posting, one of the questions that came up in a webinar on shale gas in which I participated concerned the climate consequences of higher recent estimates of methane leakage from US natural gas systems. In reading further comments and blog postings on this subject, I was surprised to see assertions that went beyond drawing attention to the importance of the leakage of a high-value, high global-warming-impact gas, to suggest that the apparent rate of leakage renders the lifecycle emissions from natural gas as bad as those from coal, or worse. If that were true, it would have significant implications not only for the development of shale and other natural gas resources, but also for our entire emissions reduction strategy. From what I can tell, however, such claims have not been substantiated by current studies.

Several comments I received in email or on the posting pointed to the work of Professor Robert Howarth of Cornell University, and specifically to a press release describing a paper he has apparently submitted addressing the climate impact of methane leaks from shale gas production, transportation and storage. Until the details of the paper are available, the information provided in the press release simply doesn't stand on its own or merit further analysis. In the meantime, a recent EPA report evaluating greenhouse gas emissions from the oil and gas industry identifies significantly higher estimates for methane emissions from natural gas systems than those incorporated into that agency's most recent US Greenhouse Gas Inventory. I became aware of the EPA report in the course of reading one of the blog postings I alluded to above.

The EPA estimated the total CO2-equivalent methane leakage from the production, processing, transportation, storage and distribution of natural gas in the US in 2006 at 261 million tons per year. That amounts to more than 4% of total net US emissions for that year, so it is hardly insignificant. It's also about 2.5 times the figure reported in the agency's latest GHG inventory. Converting that quantity back into natural gas at normal conditions yields 656 billion cubic feet of gas, or 3.4% of marketed US natural gas production in 2006. That's a lot higher than typical leakage estimates of less than 1%, as David Lewis notes in his blog. The question is whether this higher level of leaks, or some even higher notional level of leaks proposed by other critics, would be sufficient to make the emissions from gas worse than those from coal.

To understand why that might even be possible, you have to know something about the relative strength of different greenhouse gases (GHGs). While much of the public's attention has been focused on CO2, the most prevalent man-made GHG, other gases have dozens or hundreds of times the impact on climate, per ton. Because of the way it decays in the atmosphere, methane's global warming potential (GWP) starts high and diminishes over longer time spans. Most reports, including the EPA's, use a 100-year GWP estimate indicating methane is around 21 times worse than CO2.

However, it's not correct to infer from that that upstream leaks of 3.4% of all natural gas must therefore inflate the lifecycle emissions of the gas we consume by 21 times 3.4%, or 71%. That's because a ton of methane doesn't convert to a ton of CO2 when burned; it yields 2.75 tons, as a result of basic high school chemistry:

CH4 + 2O2 --> CO2 + 2H20

So for each ton of natural gas, it's roughly 7.6 time worse for it to be vented or leaked than burned, after adjusting methane's standard GWP for the ratio of molecular weights from the above reaction equation. In fact, when I added the EPA's latest methane emissions estimates to their figures for indirect and direct CO2 emissions from natural gas in the GHG inventory, the result was very close to the 26% increase you'd get from multiplying 3.4% by 7.6. As a result, although the emissions advantage of natural gas over coal is less than it would be without such a high rate of leakage, gas still emits 35% less CO2 equivalent per BTU over its lifecycle than coal, on average.

When you consider how natural gas actually competes with coal, its effective emissions advantage should be larger than that. Even after accounting for upstream emissions (including leakage) that add 30% to its CO2 emissions from combustion, an efficient combined-cycle power plant still generates electricity with emissions per kilowatt-hour that are more than 40% lower than those from a highly-efficient coal plant. That's because the combined cycle turbine converts more than half the BTUs in its fuel into electricity, while the coal plant converts less than 40% of coal's BTUs into power. Fewer BTUs for the same output results in fewer emissions.

I don't claim my back-of-the-envelope analysis is definitive, but it certainly doesn't support the notion that gas is worse than coal. Barring conclusive evidence of a much higher level of upstream natural gas leakage than indicated by the EPA's latest work on the subject, natural gas--even with existing infrastructure--could reduce the emissions associated with coal use in power generation by at least a third, and by much more than that depending on the specific generating facilities involved. At the same time, that shouldn't be read as excusing avoidable leaks of gas. If that 3% figure is accurate or low, then several billion dollars worth of gas--even at today's depressed prices--is escaping into the atmosphere rather than being captured and turned into useful energy by gas customers. That sounds like the epitome of low-hanging fruit to me.