Energy

Wednesday, November 18, 2009 9:30 AM

Potential Allies, Gas And Renewables Grow Apart

By Amy Harder, NationalJournal.com

Updated at 1:06 p.m. on Nov. 19.

Natural gas to wind: I'm just not that into you.

Experts see the two energy sources as a natural pair, with gas serving as a relatively clean backup to wind power's intermittent production. The natural gas industry, though, is looking for a relationship with real commitment if it is to throw its lot in with renewables.

Wind power typically requires a backup energy source, especially now during its infancy. Natural gas plants, which can be ramped up or down more quickly than other traditional energy sources, are the most obvious option. Gas isn't "the only technology that can or will be able to serve that market, but they're pretty well positioned right now," said Rob Gramlich, senior vice president for public policy at the American Wind Energy Association.

Oilman T. Boone Pickens and AWEA head Denise Bode are two of the biggest matchmakers bringing the sectors together. Pickens' plan calls for increases in wind energy alongside a transition in the transportation sector from oil to natural gas. Bode, meanwhile, is one of many wind industry leaders to have come from the oil and gas sector, having served as head of the Independent Petroleum Association of America and the American Clean Skies Foundation before taking the helm at AWEA.

But the match may not be made in heaven. Bryan Hannegan, a vice president at the Electric Power Research Institute, said some gas companies balk at the idea. "Privately, they tell us, 'We're not sure if this low-carbon world is going to be a boon or a bane for us,'" he said. Companies don't know "if gas is going to be needed as much in a decade from now," making gas companies and financial backers hesitant to invest.

Experts agree that while natural gas may be the most attractive backup source in today's energy mix, things could change. "There are lots of things you can do to balance the supply and demand" of wind energy, said Steve Clemmer, director of energy research for the Union of Concerned Scientists. He listed several other ways wind could be backed up, including storing wind power, curtailing energy output at low-demand times and turning to other alternatives, such as hydro power.

"As renewables penetrate the market, to the extent that they penetrate the market and force out conventional generation, the first conventional generation that gets forced out is natural gas," said Don Santa, president of the Interstate Natural Gas Association of America. Members of Santa's group are responsible for transporting 95 percent of the country's natural gas.

Statistics provided by AWEA illustrate the natural gas sector's decreasing share of new energy production. Almost 90 percent of new generating capacity added since 2005 has been a combination of wind and gas, but that ratio has been moving in wind's direction. In 2007, 28 percent of new energy generation came from wind and 60 percent from gas; the next year that shifted to 42 percent wind and 45 percent gas.

Gas has traditionally had higher operating costs than other energy sources, which is why lawmakers from both parties as well as the Obama administration have touted natural gas as an important transition fuel. The gas sector's inclusion for the long term, though, goes unmentioned. "No one wants to be a transition," Hannegan quipped.

To ensure a place for themselves in upcoming energy legislation, some in the gas industry are trying to move lawmakers away from schemes designed to encourage renewables and toward a low-carbon standard that would benefit power sources that emit very low levels of pollutants -- like gas. "If the purpose of legislation is to decarbonize the electric generating sector, why are you giving those benefits to only renewables?" Santa asked.

Not surprisingly, AWEA opposes expanding energy requirements to encompass non-renewables. "If you include every energy business that thinks they're clean, then basically you'd have to have a clean energy standard at 80 or 90 percent" of all power generated, said Bode. Many environmentalists agree. "Rather than do the smart thing politically and substantively, which is to create incentives to shift from coal to gas, some in the natural gas industry want to beat up on the renewables," said Dan Weiss, who directs the Center for American Progress' climate strategy.

For his part, Santa contends that the future partnership between gas and renewables doesn't look to him like an equal give-and-take: "You're going to win a little by backing them, but it's not a one-to-one tradeoff."

America's Natural Gas Alliance President Rod Lowman submitted a letter to the editor in response to this report. Click here to read it.

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