Implications of changing natural gas prices in the United States electricity sector for SO2, NOX and life cycle GHG emissions

Abstract

Projections of increased domestic natural gas supply and low prices have encouraged increased natural gas utilization in the United States electricity sector. Natural gas can offset coal, likely decreasing overall greenhouse gas (GHG) emissions and other air emissions such as SO2 and NOX. Previous life cycle assessment (LCA) studies using limited system boundaries have attempted to quantify the benefit of offsetting coal use. However, these studies do not consider that relative regional fuel prices may contribute most to the choice of coal over natural gas. External incentives such as low natural gas prices compared to coal are required if natural gas is to displace coal. In this study, simplified economic dispatch models are used to determine how natural gas utilization will increase in the short-term in response to changes in natural gas prices in three US grid regions—ERCOT, MISO and PJM. The results indicate that the change in air emissions is lower than suggested by LCAs, since LCAs generally do not include the complexity of regional electricity grids. For instance, this study estimates that life cycle GHG emissions may, at best, decrease by 7–15% due to low natural gas prices, compared to almost 50% reductions estimated by previous LCAs.