Coal and wind
The natural gas industry must work to become part of the green energy mix.
You don’t need a meteorologist to know which way the wind blows. You just need to drive across Texas to see that turbines are going up, and coal plants are coming down. The energy industry is changing. For the first time ever, windower capacity has surpassed that of coal in Texas. A new wind farm sent the state’s total capacity to more than 20,000 megawatts, in contrast to 19,800 megawatts of capacity from coal-fired power plants, Houston Chronicle reporter Ryan Maye Handy wrote this week.
The whole state, public and private sector alike, must prepare for these changing dynamics or else risk finding ourselves in a future in which today’s booming oil field becomes the next failing coal country.
Don’t blame regulations or out-of-control environmentalists for the success of renewable energy. Sheer economics accounts for the rise of wind and the fall of coal. Building a new turbine costs less than the expense of running an old coal plant, according to a recent report by the Lazard financial firm.
The economics of pollution and global warming also come into play.
Nations around the globe are increasingly taking into account the costs of greenhouse gas emissions, and the private sector is finding that green energy has become a wiser investment.
If natural gas is going to be part of the future energy mix, the industry and regulators must work to emphasize its green characteristics.
The United States has already demonstrated that replacing coal with natural gas can be an effective and inexpensive way to lower carbon emissions. The domestic energy sector had a 12 percent decline in carbon dioxide emissions between 2005 and 2015, largely due to a phenomena of natural gas replacing coal.
Yet the rest of the world, and plenty of environmental groups, remain wary about treating natural gas as part of the solution. If Texas wants the world to buy our LNG exports, a sign of environmental good faith would go a long way.
In an October interview, Al Gore told the Houston Chronicle editorial board that he used to view natural gas as a “bridge to a renewable future.” However, concerns about methane leaks and fracking-related pollution changed his mind.
“The leakage during compression, the leakage during transportation, is now at or above the fraction that outweighs the CO2 advantage,” he said.
The major oil players know this problem. Earlier this year, ExxonMobil announced a plan to track and reduce methane emissions in its infrastructure.
The real challenge, as oil majors and Gore can both agree, is with smaller wildcatters who don’t hold themselves to as high a standard. That’s where the government needs to come in and prevent bad actors in the fracking fields.
Unfortunately, the Trump administration is moving in the exact opposite direction. The Bureau of Land Management is trying to roll back Obama-era rules about preventing methane waste, and the Environmental Protection Agency is changing how it measures the cost of methane leaks to downplay its actual effect on global warming.
While the oil and gas industry is on board with reasonable regulations on greenhouse gas emissions, the Trump administration clings to the past. If regulators don’t catch up with reality, don’t be surprised when oil and gas gets left behind.