Inside Take: How to Build a Bridge to Philadelphia’s Energy Future

What's the right role for natural gas?

Photo from Shutterstock.

Photo from Shutterstock.

(Editor’s note: This is an opinion column from a Citified insider.)

The debate over the Philadelphia energy hub is the best test of whether Americans are capable of self-governing the world’s biggest challenges. Altogether fitting that it should happen here. And altogether scary that we might blow it.

The test boils down to this. Can we turn a “yes or no” debate in which blunt instruments of power are likely to produce either a pyrrhic victory or a stalemate into an “under what conditions” debate in which legitimate concerns are accommodated in ways that advance the whole region on a sustainable pathway to a better future.

In this essay, I try to sort out what it means to really build a pathway that reflects a collective decision about a potential Philadelphia energy hub. I am not presuming to speak for anyone’s concerns nor how those concerns might be accommodated. Instead, I focus on the steps—a dance between analysis and compromise—toward a coherent strategy for using natural gas as an economic development driver for the Philadelphia region. To organize this argument, I’m going to use the “bridge to the future” metaphor, which is an old standard with respect to natural gas. But the bridge metaphor is almost always rolled out in an insipid and unhelpful way. We can get a lot more work out of the image.

Natural gas as a “bridge to the future” conveys a transition that helps decarbonize our energy system over time. That transition is often stated specifically as a move away from more carbon-intensive coal and toward carbon-free renewables in the future. But that’s just a specific case; there are other transitions that could potentially decarbonize the energy system. If carbon capture and sequestration (CCS) technology, for example, became feasible tomorrow, then we could decarbonize by burning coal without carbon emissions and not need a gas bridge. Alternatively, if grid-scale energy storage technology became feasible tomorrow, then we could integrate massive renewables into our energy system and again not need a gas bridge. In each case, it’s the transition that matters not the means of the transition.

The reason natural gas makes a powerful claim as a necessary bridge to the future is that CCS, renewables, storage, energy efficiency and every other option alone or in combination almost certainly takes more time to implement than we have to avoid the worst consequences of a carbon-intensive energy system. (These consequences are outlined in many studies, but for a bi-partisan and establishment version, see Risky Business.)

But just calling natural gas “a bridge” doesn’t make it one. It’s time—past time—to design this bridge with at least as much seriousness as if we were planning to literally drive across one. Major design choices must go into a bridge before it can be built and used. Where do we get on and where do we get off? How long is it and what’s the speed limit? How much weight does it bear? What’s the toll charge? And once we’re across it, where does it connect us with and where have we bypassed?

So far, the Philadelphia energy hub debate has been dominated by narrow (which is not to say unimportant) interests. It’s like a bridge being designed by a bridge-painting company. They wouldn’t care about all those questions above; they’d only want a bridge that is ready for the next repainting as soon as the last repainting is completed. We need to design a bridge that serves everyone, not just the bridge painters.

The first principle of this design effort should be that no assumption is above interrogation. For example, why isn’t carbon-based natural gas a total non-starter for anyone who believes in climate change and its risks? Fair enough.

A January 2015 study published in Nature provides a helpful answer. Informed by science over decades and from around the world, policy makers from every nation agreed in 2009 that average global temperatures should not be allowed to increase more than 3.6 F degrees (usually measured as 2 C degrees) above normal temperatures before industrialization. The accepted estimate for having at least a 50 percent chance of staying below that dangerous threshold states that the total additional amount of carbon emissions added to the atmosphere between now and 2050 cannot exceed the emissions contained in about one-third of the world’s fossil fuel reserves. (“Reserves” are the economically feasible fraction of “recoverable resources,” which are the much larger amounts of fossil fuels known to exist.) All this says what we’ve known for a few years, that about two-thirds of economically viable fossil fuel reserves must remain in the ground in order to stay under the 3.6 F threshold.

What’s new and interesting in the Nature paper is that the authors ask which two-thirds should be left in the ground as “unburnable”? Using well-established models that run both economic and climate data, they identify the most cost-effective one-third to burn before 2050 in order to stay under the 3.6 F threshold. For the whole world, they estimate that 33 percent of oil, 49 percent of natural gas, and 82 percent of coal is unburnable. But they also calculate these estimates for all the regions of the world with reserves. For the United States, they estimate that 6 percent of oil, 4 percent of natural gas, and 92 percent of coal is unburnable. (Importantly, these numbers change only slightly if carbon capture and sequestration is assumed to be widely deployed by 2025.)

Bottom line: even under the strictest scientific constraints with respect to global warming, the optimal (in the sense of social welfare) scenario for the U.S. energy system almost completely exploits existing our oil and natural gas reserves (and almost completely halts coal burning and further fossil fuel exploration).

Ok, that’s a smart accounting exercise by researchers who modeled a world committed to saving the planet. But what if we consider the question from a completely different perspective? How would a high-functioning government in the U.S. use a natural gas option to pursue a carbon reduction goal under some meaningful conditions like keeping the lights on and the bills affordable? Forget scientific research. How about long-term planning in the real world? Again, fair enough.

In September 2014, a group of 25 companies, organizations, and foundations known as the Low-Carbon Grid Study (LCGS) released a report to determine a pathway for meeting California’s ambitious goal of cutting in half its greenhouse gas emissions by 2050. The report used assumptions from the California Public Utilities Commission, the California Air Resources Board, and the California Energy Commission and is built on analysis by NREL, the National Renewable Energy Lab. That is an all-star team for any energy policy fan.

The analysis shows that meeting the goal is possible with minimal impact on electricity rates and no compromise in electric grid reliability. The keys to the transition are energy efficiency, renewable energy sources, energy storage, electric vehicles, regional cooperation in energy markets, and the strategic and efficient use of natural gas dispatched to provide energy to the grid. Even in California, where stars align to an extent that climate hawks in other states can only dream about, natural gas is a critical element of getting to 2050 when real plans are being made for a real energy system.

All of these long-term accounting and planning scenarios, even if we accept their assumptions and methods, skip past the feasibility of actually implementing the changes they describe. What good are these exercises if they don’t take into consideration the difficulty of actually making the changes needed to realize them? One last time, fair enough.

A Jan/Feb 2015 study of this question is so on point that I’ll just recite the title: “A critical review of global decarbonization scenarios: what do they tell us about feasibility?” The authors examine 17 scenarios from 11 studies. All these scenarios describe reductions of 50-90 percent in global CO2 emissions by 2030-2060. Every one of the scenarios assumes historically unprecedented rates of improvements in energy intensity (the amount of energy needed to produce a unit of economic output) and most assume improvements in carbon intensity (the amount of CO2 emissions needed to produce a unit of energy output) that would require staggering increases in installed capacity for renewables.

But the most important conclusion for our present purposes is this: “Finally, all of the studies present comparatively little detail on strategies to decarbonize the industrial and transportation sectors, and most give superficial treatment to relevant constraints on energy system transformations. To be reliable guides for policymaking, scenarios such as these need to be supplemented by more detailed analyses realistically addressing the key constraints on energy system transformation.” Amen.

But I would extend this argument to say that “analyses” alone will not suffice in “realistically addressing the key constraints.” Policy outcomes capable of achieving ambitious transformations require compromises as much as analyses. And compromises require the convening of stakeholders for a facilitated discussion of the concerns that will make or break the negotiations.

The Philadelphia energy hub is a crazy complex example of this. What are the design choices that would go into a collective vision of a Philadelphia energy hub? Can we specify the major benefits and costs of the energy hub within the Philadelphia region (we could make a similar list for the Commonwealth, the Delaware River Watershed, the United States, the Earth, etc.) that would allow stakeholders to identify the conditions under which they could support an energy hub strategy?

The reason we need a single list of all the benefits and costs, and who receives them, is that that is the only way to determine if the expected benefits outweigh the expected costs and, more importantly, to make provisions to ensure that those who actually feel those costs are fully compensated for them.

Only a vision that comprehends all these concerns will avoid stalemates, pyrrhic victories, and conflicts across the mess of jurisdictions that pseudo-govern energy policy. And such a vision will only derive from a sustained discussion among legitimate stakeholders who are prepared to make a deal.

Mark Alan Hughes teaches at Penn and directs the Kleinman Center for Energy Policy. He is also a Citified insider.