Tag Archives: natural gas

The What and Why of Carbon Budgets

If you’ve been paying much attention to the climate policy discussion over the last few years, you’ve probably heard mention of carbon budgets, or greenhouse gas (GHG) emissions budgets more generally. Put simply, for any given temperature target there’s a corresponding total cumulative amount of greenhouse gasses that can be released, while still having a decent chance of meeting the target. For example, the IPCC estimates that if we want a 2/3 chance of keeping warming to less than 2°C, then we can release no more than 1000Gt of CO2 between 2011 and the end of the 21st century.

The IPCC estimates that if we want a 2/3 chance of limiting warming to less than 2°C, then we can release no more than 1000Gt of CO2 equivalent between 2011 and the end of the 21st century.

The reason the IPCC and many other scientist types use carbon budgets instead of emissions rates to describe our situation is that the atmosphere’s long-term response to GHGs is almost entirely determined by our total cumulative emissions. In fact, as the figure below from the IPCC AR5 Summary for Policymakers shows, our current understanding suggests a close to linear relationship between CO2 released, and ultimate warming… barring any wild feedbacks (which become more likely and frightening at high levels of atmospheric CO2) like climate change induced fires vaporizing our boreal and tropical forests.

Carbon Budget vs. Cumulative Warming
Figure SPM.5(b), from the IPCC AR5 Summary for Policymakers.

What matters from the climate’s point of view isn’t when we release the GHGs or how quickly we release them, it’s the total amount we release — at least if we’re talking about normal human planning timescales of less than a couple of centuries. This is because the rate at which we’re putting these gasses into the atmosphere is much, much faster than they can be removed by natural processes — CO2 stays in the atmosphere for a long time, more than a century on average.    We’re throwing it up much faster than nature can draw it down.  This is why the concentration of atmospheric CO2 has been marching ever upward for the last couple of hundred years, finally surpassing 400ppm this year.

So regardless of whether we use the entire 1000Gt budget in 20 years or 200, the ultimate results in terms of warming will be similar — they’ll just take less or more time to manifest themselves.

Unfortunately, most actual climate policy doesn’t reflect this reality.  Instead, we tend to make long term aspirational commitments to large emissions reductions, with much less specificity about what happens in the short to medium term.  (E.g. Boulder, CO: 80% by 2030, Fort Collins, CO: 80% by 2030, the European Union: 40% by 2030).  When we acknowledge that it’s the total cumulative emissions over the next couple of centuries that determines our ultimate climate outcome, what we do in the short to medium term — a period of very, very high emissions — becomes critical.  These are big years, and they’re racing by.

Is 1000Gt a Lot, or a Little?

Few normal people have a good sense of the scale of our energy systems. One thousand gigatons. A thousand billion tons. A trillion tons. Those are all the same amount. They all sound big. But our civilization is also big, and comparing one gigantic number to another doesn’t give many people who aren’t scientists a good feel for what the heck is going on.

Many people were first introduced to the idea of carbon budgets through Bill McKibben’s popular article in Rolling Stone: Global Warming’s Terrifying New Math. McKibben looked at carbon budgets in the context of the fossil fuel producers. He pointed out that the world’s fossil fuel companies currently own and control several times more carbon than is required to destabilize the climate. This means that success on climate necessarily also means financial failure for much of the fossil fuel industry, as the value of their businesses is largely vested in the control of carbon intensive resources.

If you’re familiar with McKibben’s Rolling Stone piece, you may have noticed that the current IPCC budget of 1000Gt is substantially larger than the 565Gt one McKibben cites. In part, that’s because these two budgets have different probabilities of success. 565Gt in 2012 gave an 80% chance of keeping warming to less than 2°C, while the 2014 IPCC budget of 1000Gt would be expected to yield less than 2°C warming only 66% of the time. The IPCC doesn’t even report a budget for an 80% chance. The longer we have delayed action on climate, the more flexible we have become with our notion of success.

Unfortunately this particular brand of flexibility, in addition to being a bit dark, doesn’t even buy us very much time. If we continue the 2% annual rate of emissions growth the world has seen over the last couple of decades, the difference between a budget with a 66% chance of success and a 50% chance of success is only ~3 years worth of emissions. Between 50% and 33% it’s only about another 2 years. This is well-illustrated by some graphics from Shrink That Footprint (though they use gigatons of carbon or GtC, instead of CO2 as their unit of choice, so the budget numbers are different, but the time frames and probabilities are the same):


Like McKibben’s article, this projection is from about 3 years ago. In those 3 years, humanity released about 100Gt of CO2. So, using the same assumptions that went into the 565Gt budget, we would now have only about 465Gt left — enough to take us out to roughly 2030 at the current burn rate.

There are various other tweaks that can be made with the budgets in addition to the desired probability of success, outlined here by the Carbon Tracker Initiative.  These details are important, but they don’t change the big picture: continuing the last few decades trend in emissions growth will fully commit us to more than 2°C of warming by the 2030s. 2030 might sound like The Future, but it’s not so far away.  It’s about as far in the future as 9/11 is in the past.

It’s encouraging to hear that global CO2 emissions remained the same in 2014 as they were in 2013, despite the fact that the global economy kept growing, but even if that does end up being due to some kind of structural decoupling between emissions, energy, and our economy (rather than, say, China having a bad economic year), keeping emissions constant as we go forward is still far from a path to success. Holding emissions constant only stretches our fixed 1000Gt budget into the 2040s, rather than the 2030s.

If we’d started reducing global emissions at 3.5% per year in 2011… we would have had a 50/50 chance of staying below 2°C by the end of the 21st century. If we wait until 2020 to peak global emissions, then the same 50/50 chance of success requires a 6% annual rate of decline.  That’s something we’ve not yet seen in any developed economy, short of a major economic dislocation, like the collapse of the Soviet Union.  And unlike that collapse, which was a fairly transient event, we will need these reductions to continue year after year for decades.


The Years of Living Dangerously

We live in a special time for the 2°C target.  We are in a transition period, that started in about 2010 and barring drastic change, will end around 2030.  In 2010, the 2°C target was clearly physically possible, but the continuation of our current behavior and recent trends will render it physically unattainable within 15 years.  Barring drastic change, over the course of these 20 or so years, our probability of success will steadily decline, and the speed of change required to succeed will steadily increase.

I’m not saying “We have until 2030 to fix the problem.”  What I’m saying is closer to “We need to be done fixing the problem by 2030.”  The choice of the 2°C goal is political, but the physics of attaining it is not.

My next post looks at carbon budgets at a much smaller scale — the city or the individual — since global numbers are too big and overwhelming for most of us to grasp in a personal, visceral way.  How much carbon do you get to release over your lifetime if we’re to stay with in the 1000Gt budget?  How much do you release today?  What does it go toward?  Flying? Driving? Electricity? Food?  How much do these things vary across different cities?

Featured image courtesy of user quakquak via Flickr, used under a Creative Commons Attribution License.

Oil & Gas Rulemaking Public Hearing & Comment Session

Come to the Colorado Air Quality Control Commission Public Hearing

February, 19th 12:00 pm – 3:00 pm and 5:00 pm – 7:00 pm
Aurora Municipal Center
15151 East Alameda Parkway, Aurora, 80012

The Colorado Legislature has declared it to be the policy of the state to “achieve the maximum practical degree of air purity in every portion of the state,” to attain and maintain Federal standards on air quality, and to prevent the significant deterioration of air quality in places where the air quality is better than federally mandated. The Air Quality Control Commission of the State of Colorado is charged with making these policies into enforceable regulations. This is a commission of 9 volunteers appointed by the Governor who care passionately about air quality. This is not the Colorado Oil and Gas Control Commission, who some see as having the interests of a small group of constituents at heart. The Commissioners of the AQCC are working hard to ensure that the air quality regulations they enact are the best possible regulations for public health.

Rewind to November, when Governor Hickenlooper stood with representatives of Environmental Defense, a former EPA Region 8 administrator, and the “big three” oil and gas developers in the state, Anadarko, Encana, and Noble Energy. These groups worked to come to a consensus on rules that will positively impact public health as well as will be attainable by the developers. Do these rules promise to allow zero oil and gas emissions to escape into the air? No. Will they go a long way toward cleaning up the VOC’s and methane that are part of today’s development? Yes. They can be stronger, but they must not be any weaker.

Over the past three months, small developers and industry groups have worked hard to attack these rules in hopes that they will be weakened. The rules are long and tedious, but can be understood to address two issues. First, they will require the oil and gas industry to use better technology – technology that the big three may already be using – to reduce VOC and methane emissions. Second, the rules require the industry to inspect their infrastructure and fix leaks when they are detected.

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Now We’re Hedging With Wind

Price is not the only economic variable to consider in deciding what kind of generation a utility should build.  Different kinds of power have different risks associated with them.  This is important even if we set aside for the moment the climate risk associated with fossil fuels (e.g. the risk that Miami is going to sink beneath the waves forever within the lifetime of some people now reading this).  It’s true even if we ignore the public health consequences of extracting and burning coal and natural gas.  As former Colorado PUC chair Ron Binz has pointed out, risk should be an important variable in our planning decisions even within a purely financial, capitalistic framing of the utility resource planning process.

Utility financial risk comes largely from future fuel price uncertainty.  Most utility resource planning decisions are made on the basis of expected future prices, without too much thought given to how well constrained those prices are.  This is problematic, because building a new power plant is a long-term commitment to buying fuel, and while the guaranteed profits from building the plant go to the utility, the fuel bill goes to the customers.  There’s a split incentive between a utility making a long-term commitment to buying fuel, and the customers that end up actually paying for it.  Most PUCs also seem to assume that utility customers are pretty risk-tolerant — that we don’t have much desire to insulate ourselves from future fuel price fluctuations.  It’s not clear to me how they justify this assumption.

What would happen if we forced the utilities to internalize fuel price risks?  The textbook approach to managing financial risk from variable commodity prices is hedging, often with futures contracts (for an intro to futures check out this series on Khan Academy), but they only work as long as there are parties willing to take both sides of the bet.  In theory producers want to protect themselves from falling prices, and consumers want to protect themselves from rising prices.  Mark Bolinger at Lawrence Berkeley National Labs took a look at all this in a paper I just came across, entitled Wind Power as a Cost-effective Long-term Hedge Against Natural Gas Prices.  He found that more than a couple of years into the future and the liquidity of the natural gas futures market dries up.  In theory you could hedge 10 years out on the NYMEX exchange, but basically nobody does.  Even at 2 years it’s slim!

Average Volume and Open Interest in NYMEX Gas Futures Contracts

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To Frack Or To Freak? The Effects Of Hydraulic Fracturing On Our Environment

By: Robert Miles, July 2013

Hydraulic fracturing drilling rig on the Pinedale Anticline in Wyoming with mountain range in background.
Drilling rig on the Pinedale Anticline (Linda Baker)

Natural gas produced from shale formations, commonly referred to as “shale gas”, has become increasingly important in the energy supply market for the U.S. and worldwide. Obtaining natural gas from shale reserves was not considered economically feasible until recently because of low permeability of the shale rock formations. New developments in hydraulic fracturing technology have led to a boom in domestic shale gas production since massive scale utilization in 2003. The United States has experienced economic benefits via revenue and job creation in predominantly rural areas while simultaneously increasing the energy security of the U.S. by decreasing dependence on foreign oil supplies. However, the resounding question remains: at what cost? In order to realize the implications of this question we first need to understand some basics about the hydraulic fracturing process and the uncertainties that continue to surround the shale gas industry. In this report I will primarily focus on the environmental impacts of hydraulic fracturing and well development, but it is important to realize that direct impacts on the environment can and will extend to affect human health.

Hydraulic fracturing, or “fracking,” is a stimulation process used to extract natural gas, and in some cases oil, from deep shale reserves 5,000-8,000 feet below the ground surface. This process allows energy companies to access previously unavailable energy sources in states that have deep oil and gas reserves. The fracking process involves pumping a mixture of water, chemicals and sand at high pressure into a well, which fractures the surrounding rock formation and props open passages that allow natural gas to freely flow from rock fractures to the production well. Once the well is developed, the carrying fluid can then flow back to the ground surface along with the gas.

Continue reading To Frack Or To Freak? The Effects Of Hydraulic Fracturing On Our Environment

Ripe for Retirement: The Case for Closing America’s Costliest Coal Plants

Ripe-for-Retirement Generating Capacity Is Concentrated in Eastern States
UCS identified up to 353 coal-fired generators nationwide that are uneconomic compared with cleaner alternatives and are therefore ripe for retirement. These units are in addition to 288 coal generators that utilities have already announced will be retired. Under the high estimate, there are 19 states with more than 1,000 MW of ripe-for-retirement coal-fired generating capacity, all in the eastern half of the United States.

The Union of Concerned Scientists has gone through the catalog of America’s coal plants, and found hundreds of mostly small, old, polluting, inefficient generating units that just aren’t worth operating any more, even on a purely economic basis. They looked at several different sets of assumptions, including different natural gas prices going forward, a price on carbon, whether or not the competing natural gas fired generation would need to built new, or whether it existed already with its capital costs paid off, and whether or not the production tax credit for wind ends up being renewed. In all of the scenarios considered, they found substantial coal fired generation that should be shut down on purely economic grounds, above and beyond the 288 generating units that are already slated for retirement in the next few years. They also found that some companies — especially those in traditionally regulated monopoly utility markets in the Southeast — are particularly reluctant to retire uneconomic plants, and suggest this may be because they can effectively pass on their costs to ratepayers, who remain none the wiser.