Democratic presidential nominee Kamala Harris emphasizes that her administration would prioritize combating climate change. Notably, she also points out that natural gas plays a vital role in the energy transition, a perspective she believes shouldn’t alienate her more progressive supporters.
This issue may be front and center at Tuesday’s debate.
Natural gas is often seen as the cleanest burning fossil fuel, commonly replacing coal, which emits twice the amount of CO2. Additionally, natural gas complements renewable energy sources, as modern gas generators can quickly ramp up electricity production when solar or wind power falls short. The U.S. also sends natural gas to Europe, which uses it as a substitute for Russian gas—a fuel that can wean some of our international partners from coal.
“We are in a comfortable place,” says David Greely, chief economist at the Abaxx Exchange. “If you look at U.S. natural gas prices right now, we're paying $2 to $3 per MMbtu even priced out the curve through the winter. Europe is paying $11, and Asia is paying $14 to $15. On an energy equivalent basis, that's like having oil at around $15 a barrel.”
While the conversation in this country centers on decarbonizing the power and transport sectors, the discussion in developing countries focuses on clean and cheap access to power. If the United States can ship natural gas to these countries as liquefied natural gas, they can use it to replace coal generation. “That cuts the emissions from power generation from coal to gas in half.
“They are looking for ways to get off coal," adds Greely, “LNG is a great way to do that because it can bring gas into places without pipeline infrastructure. That is why natural gas will be around for a long time. We must get rid of coal first because it emits more CO2 than other fossil fuels. And today, we use more coal globally than ever. Then you get off petroleum. And gas is the last one you will want to give up because it is the cleanest burning.”
Greely’s comments came during a virtual press event hosted by the United States Energy Association, where I was a panelist.
Partnering With Renewables
According to the U.S. Energy Information Administration, natural gas accounts for 43% of the country's electricity generation, while coal makes up 16%. Nuclear is almost 19%. Renewables are about 21%, although they comprise 84% of all new capacity additions in 2023. It was 85% in 2022.
“It's true that renewables are sucking up and grabbing the load growth,” says Joey Mashek, strategy leader for Burns & McDonnell. But he adds that natural gas is the fuel that is replacing coal — electricity that can run all day, every day. It’s a one-for-one exchange in many states.
That coal-to-gas transition has resulted in a 25% decrease in CO2 levels since 2005, the U.S. Energy Information Administration said. This country wants to reduce greenhouse gas emissions by 50% by 2030 and be net zero by 2050. Power plants are responsible for 25% of the nation’s greenhouse gas emissions. That is second only to transportation.
Many environmental groups argue renewables can replace fossil fuels, including natural gas. They say that prices are dropping precipitously and that the grid is more capable of handling wind and solar power. Despite this optimism, renewables cannot entirely replace natural gas for several reasons.
First, wind and solar are intermittent resources. Natural gas or nuclear energy must back them up. Long-term energy storage is a promising technology, although it is still too young and expensive. Moreover, natural gas has a tremendous head start, as does the accompanying infrastructure. Shifting to renewables requires a massive investment in infrastructure and grid upgrades. Money is one issue, as are the political and regulatory challenges.
Yes, the existing fuels are jockeying for a position to feed the electricity market. Both natural gas and renewables play essential roles in the country's energy mix. According to the National Bureau of Economic Research, a 1% increase in “fast-reacting” fossil fuel technologies leads to a .88 percent increase in green energy over the long run; natural gas plants automatically kick on if the sun stops shining or the wind stops blowing.
Manufacturing Renaissance
Natural gas is also used in the chemical and manufacturing processes. “Dry” gas generates power, and “wet” gas is separated from it. The wet gas comprises chemicals such as butane, ethane, methane, and propane, all of which can serve as the foundation for finished goods. Indeed, almost every consumer product comprises “natural gas liquids.”
This gives U.S.-based manufacturers a competitive edge with access to inexpensive natural gas. “This has led to a manufacturing renaissance,” says Dena Wiggins, chief executive of the Natural Gas Supply Association. She advocates for more infrastructure so that natural gas can move from point to point anywhere globally. “The world is really hungry.”
Gas exports present vast opportunities. U.S. Secretary of State Antony Blinken noted that the United States exported 56 billion cubic meters of LNG to Europe in 2022. That accounted for 40% of Europe’s total imports—a 140% increase from the previous year. Meanwhile, Russia’s market share in Europe fell from 40% to 10%.
Benjamin Lakatos, chief executive of the MET Group in Switzerland, said 200 to 240 American LNG cargo ships headed to Europe before Russia invaded Ukraine. After the war started in 2022, that number jumped to 634. Now we are at 722. “I remember in 2022, we believed this transition would take three years. The whole natural gas industry managed this in a year.”
The Biden-Harris team has endorsed natural gas production for both domestic and international consumption. However, they also seek a thorough assessment of the environmental implications and stricter controls over methane emissions to provide the industry with more enduring support.
In contrast, Donald Trump calls climate change a hoax and cites familiar platitudes, providing no context or depth: “drill, drill, drill" is one example, even though the United States is already the world’s largest oil and gas producer. This issue is ripe for Tuesday’s debate.
Natural gas is a critical element on the path to net zero—the ultimate goal. Renewables are even more fundamental. However, climate neutrality is a long and winding journey requiring public-private investment in modern infrastructure and cutting-edge technologies. In the meantime, natural gas is replacing coal and backing up wind and solar power—qualities that could serve many of our international partners.