Global Warming News and Articles

An unlikely source of energy has emerged to meet international demands that the United States do more to fight global warming: It's cleaner than coal, cheaper than oil and a 90-year supply is under our feet.

It's natural gas, the same fossil fuel that was in such short supply a decade ago that it was deemed unreliable. It's now being uncovered at such a rapid pace that its price is near a seven-year low. Long used to heat half the nation's homes, it's becoming the fuel of choice when building new power plants. Someday, it may win wider acceptance as a replacement for gasoline in our cars and trucks.

Natural gas' abundance and low price come as governments around the world debate how to curtail carbon dioxide and other pollution that contribute to global warming. The likely outcome is a tax on companies that spew excessive greenhouse gases. Utilities and other companies see natural gas as a way to lower emissions - and their costs. Yet politicians aren't stumping for it.

In June, President Barack Obama lumped natural gas with oil and coal as energy sources the nation must move away from. He touts alternative sources - solar, wind and biofuels derived from corn and other plants. In Congress, the energy debate has focused on finding cleaner coal and saving thousands of mining jobs from West Virginia to Wyoming.

Utilities in the U.S. aren't waiting for Washington to jump on the gas bandwagon. Looming climate legislation has altered the calculus that they use to determine the cheapest way to deliver power. Coal may still be cheaper, but natural gas emits half as much carbon when burned to generate the same amount electricity.

Today, about 27 percent of the nation's carbon dioxide emissions come from coal-fired power plants, which generate 44 percent of the electricity used in the U.S. Just under 25 percent of power comes from burning natural gas, more than double its share a decade ago but still with room to grow.

But the fuel has to be plentiful and its price stable - and that has not always been the case with natural gas. In the 1990s, factories that wanted to burn gas instead of coal had to install equipment that did both because the gas supply was uncertain and wild price swings were common. In some states, because of feared shortages, homebuilders were told new gas hookups were banned.

It's a different story today. Energy experts believe that the huge volume of supply now will ease price swings and supply worries.

Gas now trades on futures markets for about $5.50 per 1,000 cubic feet. While that's up from a recent low of $2.41 in September as the recession reduced demand and storage caverns filled to overflowing, it's less than half what it was in the summer of 2008 when oil prices surged close to $150 a barrel.

Oil and gas prices trends have since diverged, due to the recession and the growing realization of just how much gas has been discovered in the last three years. That's thanks to the introduction of horizontal drilling technology that has unlocked stunning amounts of gas in what were before off-limits shale formations. Estimates of total gas reserves have jumped 58 percent from 2004 to 2008, giving the U.S. a 90-year supply at the current usage rate of about 23 trillion cubic feet of year.

The only question is whether enough gas can be delivered at affordable enough prices for these trends to accelerate.

The world's largest oil company, Exxon Mobil Corp., gave its answer last Monday when it announced a $30 billion deal to acquire XTO Energy Inc. The move will make it the country's No. 1 producer of natural gas.

Exxon expects to be able to dramatically boost natural gas sales to electric utilities. In fact, CEO Rex Tillerson says that's why the deal is such a smart investment.

Tillerson says he sees demand for natural gas growing 50 percent by 2030, much of it for electricity generation and running factories. Decisions being made by executives at power companies lend credence to that forecast.

Consider Progress Energy Inc., which scrapped a $2 billion plan this month to add scrubbers needed to reduce sulfur emmissions at 4 older coal-fired power plants in North Carolina. Instead, it will phase out those plants and redirect a portion of those funds toward cleaner burning gas-fired plants.

Lloyd Yates, CEO of Progess Energy Carolina, says planners were 99 percent certain that retrofitting plants made sense when they began a review late last year. But then gas prices began falling and the recession prompted gas-turbine makers to slash prices just as global warming pressures intesified.

"Everyone saw it pretty quickly," he says. Out went coal, in comes gas. "The environmental component of coal is where we see instability."

Nevada power company NV Energy Inc. canceled plans for a $5 billion coal-fired plant early this year. That came after its homestate senator, Majority Leader Harry Reid, made it clear he would fight to block its approval, and executives' fears mounted about the costs of meeting future environmental rules.

"It was obvious to us that Congress or the EPA or both were going to act to reduce carbon emissions," said CEO Michael Yackira, whose utilty already gets two-thirds of its electricity from gas-fired units. "Without understanding the economic ramifications, it would have been foolish for us to go forward."

Even with an expected jump in demand from utilities, gas prices won't rise much beyond $6.50 per 1,000 cubic feet for years to come, says Ken Medlock, an energy fellow at the James A. Baker III Institute for Public Policy at Rice University in Houston. That tracks an Energy Department estimate made last week.

Such forecasts are based in part on a belief that the recent spurt in gas discoveries may only be the start of a golden age for gas drillers - one that creates wealth that rivals the so-called Gusher Age of the early 20th century, when strikes in Texas created a new class of oil barons.

XTO, the company that Exxon is buying, was one of the pioneers in developing new drilling technologies that allow a single well to descend 9,000 feet and then bore horizontally through shale formations up to 1 1/2 miles away. Water, sand and chemical additives are pumped through these pipes to unlock trillions of cubic feet of natural gas that until recently had been judged unobtainable.

The wells still only capture only about a quarter of the gas locked in the shale formations. Future improvements could double that recovery rate.

However, expanded drilling has already raised environmental concerns about both the type of chemicals and millions of gallons of water used in the process.

Several lawmakers are trying to close a loophole created when Congress exempted the chemicals used in horizontal drilling from the Safe Drinking Water Act four years ago. Two months ago Chesapeake Energy Corp., one of the nation's largest natural gas producers, said it would not operate in the New York City watershed after opposition from environmental groups and lawmakers seeking to protect the water supply.

Even with the big increases in reserves they were logging, expansion plans by XTO and its rivals have been limited by the debt they took on to finance these projects that can cost as much as $3 million apiece. Under Exxon, which earned $45.2 billion last year, that barrier has been obliterated.

Bottom line: this new source of gas supply in Texas, Louisiana, Pennsylvania, North Dakota, New York and other states holds out the promise of as much as 2,000 trillion cubic feet of supplies. It is estimated that the U.S. sits on 83 percent more recoverable natural gas than was thought in 1990.

"The question now is how does this change the energy discussion in the U.S. and by how much?" says Daniel Yergin, a Pulitzer Prize winning author and chairman of IHS CERA, an energy consultancy. "This is domestic energy ... it's low carbon, it's low cost and it's abundant. When you add it up, it's revolutionary."

By MARK WILLIAMS, AP Energy Writer

New fuel-economy rules proposed by the federal Department of Transportation and the Environmental Protection Agency are the first major move by the U.S. toward cracking down on greenhouse-gas emissions. The proposed program includes miles-per-gallon requirements and national emissions standards under the EPA's greenhouse-gas-emissions guidelines for model years from 2012 to 2016.

You'd think that environmental groups would be overjoyed.

Hardly. What has them worried are all the pro-industry rule tweaks and what they see as slanted calculations. "Automakers lobbied hard to include loopholes in the Administration's proposal," says Dan Becker, director of the Safe Climate Campaign at the Center for Auto Safety.

One such wrinkle: in a key concession to manufacturers, the Department of Transportation offers generous credits to carmakers that build advanced-technology vehicles. Manufacturers of electric vehicles will get credits that apply to the regulation's overall company pollution targets. However, the power-plant carbon emissions from generating the electricity to run an EV are not factored into the greenhouse-gas calculations for such vehicles, says Jim Kliesch, senior engineer with the Union of Concerned Scientists. "In truth, if you include system-wide emissions it's about half of what a conventional vehicle emits," he says.

Critics of the proposal also point to phantom savings. Becker says the new rules perpetuate the flex-fuel credit that allows carmakers to build more gas guzzlers than the regulation might otherwise allow, provided the vehicles can run on E85, a mixture that is 85% ethanol and 15% gasoline. The problem is that only about 1% of the gas stations in the U.S. now sell E85 and the number isn't expected to increase much anytime soon. The flex-fuel credit trims the m.p.g. target for manufacturers selling flex-fuel-capable vehicles by 1.2 m.p.g.

Another perceived soft spot in the White House proposal: carmakers will get carbon credits for selling their most efficient vehicles into California and other states that had adopted separate standards before the Obama Administration moved to harmonize an expanding patchwork of state and federal rules. The proposed solution results in an arrangement whereby carmakers who had been prepared to meet California's tough impending state rules (just to be able to sell in California) will now earn bonus credits for doing just that. "The concern is carmakers will be getting extra credits for what they would have done anyway," says Kliesch.

One exemption that is already drawing fire is the so-called "German loophole," which allows automakers selling fewer than 400,000 vehicles in the U.S. to meet a weaker EPA standard. All the German automakers - Mercedes, BMW and Volkswagen - will qualify for the exemption as well as Mitsubishi, Subaru, Kia and more exotic brands such as Ferrari, Aston Martin, Jaguar and Land Rover.

But don't feel too badly for Detroit. Becker says the company that perhaps does best under the proposed rules is the government's own car company, General Motors. GM benefits from the EV exception and also from the changes in the rules that will allow sales of larger vehicles like pickup trucks through a separate loophole that permits automakers to "borrow" credits from the future. Kliesch says the flexibility is fine but asks where the guarantee is that the companies will make good on promises to repay borrowed credits. "That's why you need some kind of backstop [in the rules] to make sure the companies actually meet the standards," says Kliesch.

By JOSEPH R. SZCZESNY, Time