Aspen, Colorado

Natural Gas 1.0

Project Goals

The goals, objectives, comments, proposals, etc, were that of the Aspen Science Center and do not necessarily represent the views of all participants.

As the world moves to a less carbon-intensive energy future, natural gas has emerged as a critically important energy source. In the US, plentiful natural gas could be deployed today in the power sector to materially reduce greenhouse gas emissions and criteria pollutants; however, fuel switching is being stalled by the widely-voiced misperception that the supply is not sustainable and increased use will generate price volatility. In addition, Natural gas is misrepresented as an expensive alternative to existing systems (that do not account for costly externalities.) At the extraction stage, environmental groups are genuinely concerned about the impact that drilling and production activities might have on groundwater resources, surface water and biodiversity.

 

Our goal--through sound science, established best-practices criteria, model legislation, focused technological solutions, and cooperation between Environmental NGOs and Natural Gas CEOs is to enable natural gas to fulfill its promise as the environmentally preferred low-carbon energy source. Recognizing that collective action will provide much greater impetus for change than ad hoc attempts, the Critical Path Energy Project’s aim is to coordinate the strategic actions of natural gas producers and environmental NGOs to achieve an impact that is commensurately larger than any single group could achieve on its own (ie. the whole that is greater than the sum of its parts).

Stakeholders

  • Mark Boling, VP Southwestern Energy Company.
  • Michael Brune, Director Sierra Club
  • Jack Fusco, CEO Calpine Corporation
  • Fred C. Julander, President Julander Energy Company
  • Robert F. Kennedy, Jr., NRDC, WaterKeeper Allaince
  • Aubrey K. McClendon CEO Chesapeake Energy Corp.
  • Carl Pope Chairman of the Sierra Club.
  • Bill Ritter, Jr. former Governor of Colorado
  • Christopher Smith Deputy Assistant Secretary for Oil and Natural Gas, Office of Fossil Energy, U.S. Department of Energy.
  • Timothy Wirth President of the United Nations Foundation
  • For a complete list see the documents section below

Progress

As the world attempts to move to a less carbon-intensive energy future, natural gas has emerged as a (possibly THE) most critically important “bridging” energy source.  Our 2010 Natural Gas Solutions Summit 1.0 was convened to chart the critical paths that will enable natural gas to achieve its optimal potential as that source—environmentally, economically, politically and globally.
A year later, that gathering of leaders can claim impressive results, in terms of new alliances, important ongoing initiatives, and fundamental changes in the US energy approach, among them:

  • Developing a system for 100%  transparency in the disclosure of chemical ingredients in hydraulic fracturing fluids that does NOT infringe on trade secrets
  • Developing a model regulatory framework designed to ensure well bore integrity throughout the full lifecycle of a hydraulically fractured well.
  • Forming a legal team and petitioning the EPA to enhance Natural Gas use: define and enforce Clean Air Act provisions, MACT Boiler Rule etc
  • Development and publishing of tabletop life-cycle analysis of carbon impact coal vs. natural gas
  • An alliance of NGOs, industry, government leaders committed to replacing coal with natural gas

Project Summary

Natural Gas in the Nation’s Energy Future: A Program of Action


OBJECTIVE 1: Increase the use of natural gas and renewables in power generation and transportation to stabilize natural gas prices at a fair value, enhance our national security, clean up the air, and protect human health – potentially increasing demand by 4 to 7 trillion cubic feet per year.

PROJECTS:

1. Design a program to displace the oldest coal-fired generation with natural gas and renewables. Reduce economic and reliability concerns by providing relevant analysis and recommendations to state-level decision makers and stakeholders.
a. Use previous power generation studies to identify coal plants that present a strong business and environmental case for fuel switching.
b. Prepare “how to” template for rulemaking, legislative, and Public Utilities Commission (PUC) change. (Explore recently passed Colorado legislation as an example.)
c. Identify 5-7 target states based on political and technical ease of switching.

2. Prepare and execute a multi-state plan to retire inefficient coal plants in favor of natural gas and renewable energy. Work with the PUCs and utilities to make the environmental and business case to support natural gas over coal, particularly where underutilized efficient natural gas combined-cycle units are available close to less efficient coal generators. Use non-compliance / non-attainment as a forcing function. Promote long-term contracts between natural gas suppliers and utilities. Introduce statutory initiatives to support fuel switching. Expose the true costs of the coal plants to the region (health, air, water, land). Support mechanisms that allow the dispatch of gas over coal.

3. Initiate statutory, regulatory and industry-led initiatives to support switching heavy-duty trucks, public transport systems, and fleet vehicles to natural gas.

4. Work with renewable energy producers, power generators, and environmental groups to out-compete coal on cost, reliability, jobs and environmental benefits.

5. Actively engage with the Environmental Protection Agency (EPA) to encourage natural gas solutions that reduce air pollution:
a. Support EPA’s rulemaking authority under the Clean Air Act.
b. Petition EPA to establish a clean cap-and-trade system for CO2 that enables fuel switching to natural gas.
c. Petition EPA to allow the use of natural gas fleet vehicles to meet air quality mandates.


OBJECTIVE 2: Ensure abundant natural gas supply through environmentally sound exploration and production. Continue to reduce the environmental impact and footprint of natural gas development by institutionalizing best practices in exploration and production.


PROJECTS:


6. Support public disclosure of fracturing fluids to get this contentious issue off the table.

7. Create a forum for Industry, government and non-governmental organizations (NGOs) to analyze and determine which controls should be instituted across the country to ensure that natural gas exploration and production is clean, safe, and green while remaining price-competitive.
a. Expand the Natural Gas STAR program (where natural gas producers capture fugitive methane emissions).
b. Support adequate state funding, oversight, and enforcement of oil and gas regulations.

8. Consolidate industry best management practices for controlling the gas fields and prepare a compendium that would form the basis for good rulemaking by the states.

9. Promote concentrated well and infrastructure development to reduce costs and the impact of gas production through unitization and pooling. Prepare model unitization legislation and codes so that lease boundaries do not influence the placement of well pads, roads or pipe corridors. The aim is to:
a. Dramatically reduce surface and subsurface impact of field development.
b. Capitalize on efficiencies to reduce the cost of production and at the same time reduce as much as reasonably practical the risks of groundwater and surface water contamination, infrastructure disruption, excess truck travel, biodiversity impacts, etc.

10. Prepare and execute a multi-state plan in states where the risk of legislation that may affect industry’s ability to operate is the highest.
a. Prepare a state-specific strategy and plan to change the narrative.
b. Revise (where relevant) state regulations to match industry best management practices.
c. Revise (where relevant) state regulations to encourage unitization and pooling in the shale fields.
d. Designate portions of severance tax and/or permit fees to support more and better educated regulators to ensure timely development and efficient control.

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