Pangaea Blog

Pangaea invests in early stage cleantech companies with world-class advanced materials innovation.

Is Natural Gas Delivering an Assist to Renewable Energy?

"Gas and renewable energy sources should be seen as allies rather than enemies". New York City Mayor Michael Bloomberg, a cleantech enthusiast, offered this advice recently at the 2013 ARPA-E Energy Innovation Summit. Others see the relationship between renewables and natural gas as symbiotic.

Renewables still have to overcome challenges. The focus for renewables must remain on seeking breakthrough technologies to lower costs and establish enhanced performance. Advanced materials innovation plays a key role among the strategies being explored to overcome these issues. Carbon pricing and subsidies are not long-term solutions. In the interim, natural gas can fill the role as a less-polluting energy source. Instead of fighting market forces, why not exploit the situation to better prepare for a more stable, durable transition to renewables and simultaneously work to ensure sustainable methods for the booming natural gas business?

Natural gas is a fossil fuel. It is, however, cleaner than other fossil fuels. Compared to coal and petroleum, natural gas allows major reduction in carbon dioxide, nitrogen oxides (NOx) and sulfur oxides (SOx) emissions. Particulate emissions are mostly eliminated, leading to a significant environmental benefit, especially with respect to mercury pollution from coal-fired plants.

Is this the end of coal? With the abundance of natural gas from unconventional sources (shale gas, tight gas sands, coal bed methane, methane hydrates in ocean sediments and near permafrost) leading to record low pricing, the energy landscape has changed. We already see headlines like "The golden age of gas", "Natural gas rocks the energy world" and "Natural gas: Killing coal, nuclear and maybe, the grid". In a recent Wall Street Journal article on electricity generation growth rates from 2000 to 2012, natural gas increased its share from 16% to 30% while renewables showed a healthy jump from 3% to 12%. The share of nuclear energy dropped from 20% to 19%. At the same time, coal decreased from 52% to 30%. Production rates of natural gas have increased to about 30 trillion cubic feet annually while the spot price has plummeted to below $4 per million BTU. In March this year, Los Angeles announced plans to abandon the use of coal-fired generation by 2025.

Shale gas extraction should be improved. Accessing shale gas has led to the onset of hydraulic fracturing or "fracking" involving injecting water containing chemical additives to extract the gas from shale rock. Some of the environmental concerns include water contamination and pollutant emissions from associated operations. Recently, the use of carbon dioxide has been proposed as a possible replacement of water. This is at an early stage but you can see the potential – eliminating water usage and locking up carbon dioxide upon exhausting the gas supply. Of course, methane, the key ingredient in natural gas, is a greenhouse gas and leaks add to the problem. Recently, the International Energy Agency published the so-called "golden rules for a golden age of gas" for responsible development of these unconventional gas resources. This would require both government and industry working together.

Natural gas can be converted to fuels and chemicals. This means less polluting fuels and more petrochemical replacement. Sasol, a South African Company, pioneered the gas to liquid conversion process technology and recently announced the building of America’s first commercial plant costing about $11 billion to $14 billion to produce 96,000 barrels per day of diesel and other liquid fuels. In March 2013, the Department of Energy (DOE) through its ARPA-E group announced $20 million funding to support development of technologies for bioconversion of natural gas to liquid fuels. Benefits include "decreased emission by up to 50%, compared to unconventional petroleum" and the reduced greenhouse gas impact from capturing and converting methane. Natural gas will also impact other markets. We are already seeing increased activity related to transportation, both on road and off road. Fuel switching will certainly lead to an increase in natural gas vehicles and growing adoption in marine and railway markets.

Renewable energy has momentum. At the end of 2011, over 565 gigawatts of clean energy generation (wind, solar, small hydro, biomass / waste conversion, geothermal) was already in place globally (Pew Charitable Trusts). The natural gas surge may have some temporary impact but should not be a major distraction from continuing investment and deployment of renewable energy.

General Partner, Pangaea Ventures Ltd. Purnesh has worked with advanced materials for over 25 years, directly involved with clean technologies, nanotechnology, semi-conductors, thin films and coatings, catalysts, powder metallurgy, and manufacturing technologies.View Purnesh Seegopaul's profile on LinkedIn

Comments

  • Guest
    Baybal Ni Tuesday, 09 April 2013

    I guess, it will be possible to make definite conclusion only after a year, when major shale gas and LNG projects will pass their delivery date. It wouldn't be a big surprise to see a lot, if not more than a half of shale gas companies going deep in red after that date.

    Despite of all optimism about "new hydrocarbons", the most strong factor against the LNG economy is that North America completely lacks needed massive amounts of infrastructure and technological adaptation needed to open the market for smaller, the most promising, players.

    These infrastructure pieces are things like LPG and LNG refuelling stations, smaller and cheaper liquification plants, high pressure gas pipeline networks, car LNG/LPG conversion shops, smaller gas powered power plants, cryotanker parks and e.t.c. Even in comparison to such countries that aren't prominent on LNG scene like Russia (where you can convert your car to LPG/LNG in every city) or Brazil, North America is decades behind.

  • Purnesh Seegopaul
    Purnesh Seegopaul Thursday, 11 April 2013

    Hello Baybal,

    Good comments. Indeed, there are some uncertainties as this is all still early but significant efforts are underway to reduce the roadblocks. In addition to planned expansion in LNG and GTL projects, chemical companies are also quietly working on major gas-related expansions. With more 300 trillion cu. ft. of gas in proven reserves and possibly 10 times more in unproven reserves (EIA) at stake in the US, established companies and entrepreneurs are incentivized to find means to make this work in a sustainable manner.

Leave your comment

Guest Tuesday, 23 September 2014