Time to pull plug on natural gas
We’ve crossed the “natural gas bridge to clean energy.” Ten years ago, fracking and shale promised years of plentiful gas to generate electricity cheaply, or to be sold abroad where the price was much higher.
Dominion and Duke Power sold the space on their proposed new pipeline to corporate affiliates, guaranteed a 14 percent return on their investment by Federal Energy Regulatory Commission. A bonus — gas plants cut carbon dioxide emissions by half, and methane emissions research hadn’t been done yet. No risks were visible anywhere.
Today “the flow of capital is imperiled,” according to Nick Stansbury of Legal and General Investment Management. Methane emissions are now seen as a real climate risk, and the price of renewables with storage has dropped much faster than anyone thought possible. Another risk ... the U.S. oil and gas industry is staring at a huge debt wall scheduled to come due over the next several years.
The Rocky Mountain Institute cautions that “new natural-gas plants risk becoming stranded assets ... while existing natural-gas plants cease to be competitive as soon as 2021.” The huge debt wall, plus the destructive potential of methane emissions, and the cost competitiveness of renewables, have resulted in actions like the European Investment Bank’s decision to stop funding most fossil fuel projects by 2022.
Is the Atlantic Coast Pipeline still a good investment? The pipeline will break the carbon budget and lock in long term emissions. Six lawsuits are still outstanding. Pipeline costs continue to rise. Several projected gas plants are canceled, and there are other resource choices that can replace those newly proposed gas “peaker” plants. Offshore wind combined with solar can meet all our summer “peak” demand, and solar-storage or wind-storage are able to back up intermittent power. Those alternatives are already cheaper than new natural gas plants. So are potential demand response and efficiency savings reductions.
It is time to pull the plug on gas. The natural gas bridge to the future is behind us.