Abby L. Harvey
GHG Monitor
6/26/2015
Fears that the Environmental Protection Agency’s proposed carbon regulations for existing coal-fired power plants will be too much for the nation’s natural gas infrastructure to bear are unfounded, according to a new study published this week by the Advanced Energy Economy Institute (AEE Institute). The study explores what effect the proposed regulation, which would require states to develop action plans to meet federally set emissions reductions targets, would have on natural gas demand and in turn, if the nation’s natural gas infrastructure could handle the increased demand. The study finds that the growth of natural gas infrastructure already in development would be sufficient to handle even an extreme case of increased demand. “The pace of investment in new pipeline capacity over the past decade suggests that the projected future investments are well within the capabilities of the industry with or without the [Clean Power Plan]. This finding remains true even in a future with unexpectedly lower gas prices and higher gas demand,” according to the study.
The study attributes its findings to three factors. First, there are already a large number of natural gas pipeline projects in development. This planned expansion would be more than adequate for meeting demand in baseline scenarios and most of the increased demand in scenarios under which the carbon regulations are enacted. Second, the Clean Power Plan calls for an increase in demand-side energy efficiency programs, which would result in lower electric load growth relative to a baseline scenario. Third, the regions in which demand is expected to increase are located near gas supplies. “While Midwest and South power sector gas consumption is projected to increase in both CPP cases, these areas are relatively close to incremental gas supplies (principally the Marcellus and Utica shales). The proximity of the incremental gas demand to the source of the incremental supplies and the reversals of existing pipelines (moving gas from Marcellus/Utica to the Midwest and South on existing pipelines) reduces the amount of new pipeline and capital expenditures required,” according to the report.