The initial report was completed in January 1999 based on projections of a record 30 tcf natural gas market by 2010, including a projected 6.5 tcf in new gas demand by the electric power industry.
The update, prepared for the Interstate Natural Gas Association of America (INGAA) Foundation, analyzes the environmental and financial consequences of using coal at the expense of natural gas.
For coal-fired plants operating under an emissions cap-and-trade program, the consequences are financial. An increase in coal-fired generation means these plants must control their emissions more effectively to stay within the cap and the cost of compliance will rise.
As a result, with the expected cap-and-trade programs for NOx and SO2 in place, the study authors conclude a 25% reduction in use of natural gas would require a $3.8 billion increase in capital expenditures for pollution control equipment and $680 million/year in operating costs.
“The initial report outlined the challenges of the 30 tcf market, and this report shows us the consequences of not reaching that goal,” said Cuba Wadlington Jr., CEO of Williams Gas Pipeline, a Williams unit, and chairman of the task force on the environment for INGAA.
In preparing the report, the authors said the expectation of nuclear generation use was increased. When the original report was done, a higher rate of retirement and decommissioning of nuclear plants was anticipated. Recent trends, including applications for license renewals, suggest nuclear plants will not be retired as fast as originally thought.
Noting new gas-fired plants have the lowest emissions of any fossil-fueled electric generating system, the report concludes “If the projected growth of gas-fired generation does not take place, for any reason, these environmental benefits could be lost.”
NOx emissions from gas plants are nearly negligible due to inherently low emissions and stringent controls used, the report says. Sulfur dioxide (SO2) and mercury emissions from gas-fired generation are almost zero due to absence of precursors in the fuel, the report notes.
CO2 emissions from the combustion of one MMbtu of natural gas are nearly 40% lower than emissions from burning an equivalent amount of coal. The high efficiency of new gas combined cycle systems increases the advantage of a new unit over an existing coal boiler by 57% on a lb/Mw-hr basis, according to the report.