Appalachian gas key to lowering emissions and prices amid rising power demand

By Paul Bledsoe
Real Clear Wire

As demand for U.S. electricity has increased in the last few years, the role of natural gas in providing reliable baseload power has become more important to consumers, businesses, and to balancing the electrical grids that are also using more intermittent renewable energy. Not surprisingly, many regions and utilities now facing massive data center build outs for artificial intelligence by the technology industry have turned to natural gas to provide reliability even as this additional demand has increased both electricity and natural gas prices.

These trends have caused some media outlets and climate change advocates to express legitimate concern over the potential for increased greenhouse gas emissions of both carbon dioxide and fugitive emissions of methane from data centers. But unfortunately, often these news stories and critiques neglect to note that natural gas from the Appalachian region has far lower levels of methane emissions than gas from other parts of the country, including especially the Permian basin in Texas. Nor do critics adequately examine industry efforts, especially in Appalachia, to limit methane and other emissions from gas, which even so must be intensified.

For example, a recent story in the Washington Post described the construction of a large complex of data centers in Homer City, Pennsylvania, noting that the area had until recently been the site of a coal-fired power plant. The story also noted what it called “worrying surges in emissions and pollutants, according to government, industry and academic analyses.” Yet the Washington Post made no attempt to contrast or detail the far lower carbon dioxide emissions from natural gas than the previous coal plant featured in its story. Even more telling, the Post neglected to mention the fact that gas from the Marcellus basin in Appalachia has as low as one-tenth the amount of methane as natural gas from the Permian basin in Texas and New Mexico.

This is also ironic because many consumers in northeastern states like New York, New Jersey, and Massachusetts are paying higher monthly energy bills because they lack access to Pennsylvania gas. Yet Northeastern opponents of using gas from Appalachia often disingenuously use methane emissions numbers based on much higher national averages like those from Texas rather than much lower Appalachian methane figures to convince officials and consumers not to accept Pennsylvania gas, despite its lower emissions and the opportunity to lower overall consumer energy prices. 

Numerous studies over the last decade have found that methane emissions from Appalachian gas are far lower than the national average. Major gas companies, like PA-based EQT, the nation’s largest gas producer, have also invested tens of millions of dollars in new equipment to lower methane ,leading in EQT’s case to a 70% reduction in methane emissions and reduced carbon dioxide emissions as well.

A major study released last year illustrates much the lower emissions profile of gas produced in the Marcellus area, mostly in PA and also some areas of Eastern Ohio and northern West Virginia. The study, sponsored by the Appalachian Methane Initiative (AMI), a coalition of eight regional gas operators, and conducted by SLR, an independent technical analysis firm specializing in energy sustainability, finds that gas methane emissions intensities of production wells across all AMI operators range from 0.02% to 0.10%, with a weighted average of 0.064%, which is significantly lower than recent measurements in other producing basins. Indeed, the report found that several recent studies in the Permian basin attribute a gas production normalized emissions rate between 2 and 9%, many times higher than Appalachian gas.

The AMI study also found that methane emissions from coal mines in the Appalachia exhibit the highest average methane emissions per site of any facility in the region, or nearly two orders of magnitude larger than gas sites in the region.

More broadly, independent analysis a recent one from McKinsey finds that additional natural gas pipelines from Appalachia to the Northeast have strong potential to lower natural gas prices and consumers costs. Permitting reform bills now under consideration in the US Senate would help expedite construction of both renewable energy projects and gas pipelines, which both parties agree currently face years of needless delays due to duplicative regulations and nuisance lawsuits. Such permitting reform could provide millions of hard-pressed U.S. consumers both lower cost renewable energy and natural gas. Indeed, renewable energy and battery storage of electricity would benefit most from such reforms.

In this context, natural gas producers, renewable energy companies and electric utilities have all consistently expressed strong support for permitting reform. Now it seems especially important that the large technology companies responsible for much of the new power demand and price increases due to their huge build out of data centers take a more aggressive posture, toward advocating passage of bipartisan permitting reform in Congress. 

A recent meeting at the White House featuring mid-Atlantic Governors of both parties, President Trump and Administration officials, for example, signaled strong support for requiring technology companies to enter into long-term contracts for much of the power they intend to use in data centers. For all these reasons, both average consumers and industry stakeholders across-the-board have strong reason to support successful passage of meaningful permitting reform in this Congress.

Increasingly low emissions from Appalachian natural gas along with renewable energy, electricity storage and existing nuclear taken together hold strong promise to reduce both U.S. consumer prices and emissions in much of the eastern U.S. But the fast-growing build- out of data centers by the technology industry means permitting reform in Congress is more vital than ever for both economic and environmental progress. It’s time all consumer, economic, and environmental advocates realized the opportunity—and let Congress know.

Paul Bledsoe is president of Bledsoe and Associates, an economic, energy and climate policy consultancy. He served on the White House Climate Change Task Force under President Bill Clinton. 

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