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Natural gas scenarios in the U.S. power sector

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  • Logan, Jeffrey
  • Lopez, Anthony
  • Mai, Trieu
  • Davidson, Carolyn
  • Bazilian, Morgan
  • Arent, Douglas

Abstract

The United States power sector is being transformed by the recent rise in the availability and use of unconventional natural gas, specifically shale gas. That transformation has already produced some of the most significant changes in the operation of the portfolio of electricity generation since WWII. Further implications are likely. To that end, we present results from numerical modeling of different United States (U.S.) power sector futures. These futures assess questions affecting today's natural gas and electric power markets, including the impacts of: forthcoming EPA rules on power plants, decarbonization options such as a clean energy standard (CES), potential improvements in key generation technologies, expanded use of natural gas outside of the power generation sector, and higher costs for natural gas production—assumed to arise from more robust environmental and safety practices in the field. The simulations were done using the ReEDS model looking out to the year 2050. ReEDS is a capacity expansion model that determines the least-cost combination of generation options that fulfill a variety of user-defined constraints such as projected load, capacity reserve margins, emissions limitations, and operating lifetimes. The baseline scenario shows strong growth in natural gas generation, leading to a roughly 2.5-fold increase in gas demand by 2050. Many other scenarios also see strong growth in gas-fired generation, highlighting questions about portfolio diversity, climate change, and research and development prioritization.

Suggested Citation

  • Logan, Jeffrey & Lopez, Anthony & Mai, Trieu & Davidson, Carolyn & Bazilian, Morgan & Arent, Douglas, 2013. "Natural gas scenarios in the U.S. power sector," Energy Economics, Elsevier, vol. 40(C), pages 183-195.
    • Handle: RePEc:eee:eneeco:v:40:y:2013:i:c:p:183-195
    DOI: 10.1016/j.eneco.2013.06.008
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    References listed on IDEAS

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    Cited by:

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    5. Hafezi, Reza & Akhavan, AmirNaser & Pakseresht, Saeed & Wood, David A., 2019. "A Layered Uncertainties Scenario Synthesizing (LUSS) model applied to evaluate multiple potential long-run outcomes for Iran's natural gas exports," Energy, Elsevier, vol. 169(C), pages 646-659.
    6. Hafezi, Reza & Akhavan, AmirNaser & Pakseresht, Saeed & A. Wood, David, 2021. "Global natural gas demand to 2025: A learning scenario development model," Energy, Elsevier, vol. 224(C).
    7. Yuhong Wang & Xin Yao & Pengfei Yuan, 2015. "Strategic Adjustment of China’s Power Generation Capacity Structure Under the Constraint of Carbon Emission," Computational Economics, Springer;Society for Computational Economics, vol. 46(3), pages 421-435, October.
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    12. Mignone, Bryan K. & Showalter, Sharon & Wood, Frances & McJeon, Haewon & Steinberg, Daniel, 2017. "Sensitivity of natural gas deployment in the US power sector to future carbon policy expectations," Energy Policy, Elsevier, vol. 110(C), pages 518-524.
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    14. Alipour, M. & Hafezi, R. & Amer, M. & Akhavan, A.N., 2017. "A new hybrid fuzzy cognitive map-based scenario planning approach for Iran's oil production pathways in the post–sanction period," Energy, Elsevier, vol. 135(C), pages 851-864.
    15. Li, Raymond & Woo, Chi-Keung & Tishler, Asher & Zarnikau, Jay, 2022. "How price responsive is industrial demand for natural gas in the United States?," Utilities Policy, Elsevier, vol. 74(C).
    16. Li, Raymond & Woo, Chi-Keung & Tishler, Asher & Zarnikau, Jay, 2022. "Price responsiveness of commercial demand for natural gas in the US," Energy, Elsevier, vol. 256(C).
    17. Cole, Wesley & Lewis, Haley & Sigrin, Ben & Margolis, Robert, 2016. "Interactions of rooftop PV deployment with the capacity expansion of the bulk power system," Applied Energy, Elsevier, vol. 168(C), pages 473-481.
    18. Schwanitz, Valeria Jana & Wierling, August, 2016. "Offshore wind investments – Realism about cost developments is necessary," Energy, Elsevier, vol. 106(C), pages 170-181.
    19. Cole, Wesley J. & Medlock, Kenneth B. & Jani, Aditya, 2016. "A view to the future of natural gas and electricity: An integrated modeling approach," Energy Economics, Elsevier, vol. 60(C), pages 486-496.
    20. Lantz, Eric & Mai, Trieu & Wiser, Ryan H. & Krishnan, Venkat, 2016. "Long-term implications of sustained wind power growth in the United States: Direct electric system impacts and costs," Applied Energy, Elsevier, vol. 179(C), pages 832-846.
    21. Wiser, Ryan & Millstein, Dev & Mai, Trieu & Macknick, Jordan & Carpenter, Alberta & Cohen, Stuart & Cole, Wesley & Frew, Bethany & Heath, Garvin, 2016. "The environmental and public health benefits of achieving high penetrations of solar energy in the United States," Energy, Elsevier, vol. 113(C), pages 472-486.
    22. Hongxun Liu & Jianglong Li, 2018. "The US Shale Gas Revolution and Its Externality on Crude Oil Prices: A Counterfactual Analysis," Sustainability, MDPI, vol. 10(3), pages 1-17, March.
    23. Bilgili, Faik & Koçak, Emrah & Bulut, Ümit & Sualp, M. Nedim, 2016. "How did the US economy react to shale gas production revolution? An advanced time series approach," Energy, Elsevier, vol. 116(P1), pages 963-977.
    24. Christopher Hannum, 2023. "Effect of Natural Gas Prices on Renewable Portfolio Standard Impacts," International Journal of Energy Economics and Policy, Econjournals, vol. 13(2), pages 391-403, March.

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