IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v40y2013icp183-195.html
   My bibliography  Save this article

Natural gas scenarios in the U.S. power sector

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988313001217
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.eneco.2013.06.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Frayer, Julia & Uludere, Nazli Z., 2001. "What Is It Worth? Application of Real Options Theory to the Valuation of Generation Assets," The Electricity Journal, Elsevier, vol. 14(8), pages 40-51, October.
    2. Komor, Paul & Bazilian, Morgan, 2005. "Renewable energy policy goals, programs, and technologies," Energy Policy, Elsevier, vol. 33(14), pages 1873-1881, September.
    3. Howard Rogers, 2011. "Shale gas--the unfolding story," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 27(1), pages 117-143, Spring.
    4. Michel, Steven, 2011. "A Model Clean Energy Standard," The Electricity Journal, Elsevier, vol. 24(3), pages 45-51, April.
    5. Rahm, Dianne, 2011. "Regulating hydraulic fracturing in shale gas plays: The case of Texas," Energy Policy, Elsevier, vol. 39(5), pages 2974-2981, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Philipp M. Richter, 2015. "From Boom to Bust? A Critical Look at US Shale Gas Projections," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    2. 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.
    3. Touretzky, Cara R. & McGuffin, Dana L. & Ziesmer, Jena C. & Baldea, Michael, 2016. "The effect of distributed electricity generation using natural gas on the electric and natural gas grids," Applied Energy, Elsevier, vol. 177(C), pages 500-514.
    4. Kern, Jordan D. & Characklis, Gregory W., 2017. "Low natural gas prices and the financial cost of ramp rate restrictions at hydroelectric dams," Energy Economics, Elsevier, vol. 61(C), pages 340-350.
    5. Zhou, Ella & Cole, Wesley & Frew, Bethany, 2018. "Valuing variable renewable energy for peak demand requirements," Energy, Elsevier, vol. 165(PA), pages 499-511.
    6. 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.
    7. 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.
    8. 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).
    9. 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.
    10. 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.
    11. 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.
    12. 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.
    13. Arora, Vipin & Cai, Yiyong, 2014. "U.S. natural gas exports and their global impacts," Applied Energy, Elsevier, vol. 120(C), pages 95-103.
    14. Bistline, John E., 2014. "Natural gas, uncertainty, and climate policy in the US electric power sector," Energy Policy, Elsevier, vol. 74(C), pages 433-442.
    15. Long, Xingle & Naminse, Eric Yaw & Du, Jianguo & Zhuang, Jincai, 2015. "Nonrenewable energy, renewable energy, carbon dioxide emissions and economic growth in China from 1952 to 2012," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 680-688.
    16. 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.
    17. 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).
    18. Wang, Guotao & Liao, Qi & Li, Zhengbing & Zhang, Haoran & Liang, Yongtu & Wei, Xuemei, 2022. "How does soaring natural gas prices impact renewable energy: A case study in China," Energy, Elsevier, vol. 252(C).
    19. Maïzi, Nadia & Assoumou, Edi, 2014. "Future prospects for nuclear power in France," Applied Energy, Elsevier, vol. 136(C), pages 849-859.
    20. 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).
    21. Schwanitz, Valeria Jana & Wierling, August, 2016. "Offshore wind investments – Realism about cost developments is necessary," Energy, Elsevier, vol. 106(C), pages 170-181.
    22. 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.
    23. 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.
    24. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jenner, Steffen & Lamadrid, Alberto J., 2013. "Shale gas vs. coal: Policy implications from environmental impact comparisons of shale gas, conventional gas, and coal on air, water, and land in the United States," Energy Policy, Elsevier, vol. 53(C), pages 442-453.
    2. Wang, Qiang & Chen, Xi & Jha, Awadhesh N. & Rogers, Howard, 2014. "Natural gas from shale formation – The evolution, evidences and challenges of shale gas revolution in United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 1-28.
    3. Lips, Johannes, 2018. "Debt and the Oil Industry - Analysis on the Firm and Production Level," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181504, Verein für Socialpolitik / German Economic Association.
    4. Santos, Lúcia & Soares, Isabel & Mendes, Carla & Ferreira, Paula, 2014. "Real Options versus Traditional Methods to assess Renewable Energy Projects," Renewable Energy, Elsevier, vol. 68(C), pages 588-594.
    5. Gobong Choi & Eunnyeong Heo & Chul-Yong Lee, 2018. "Dynamic Economic Analysis of Subsidies for New and Renewable Energy in South Korea," Sustainability, MDPI, vol. 10(6), pages 1-19, June.
    6. Hörnlein, Lena, 2019. "The value of gas-fired power plants in markets with high shares of renewable energy," Energy Economics, Elsevier, vol. 81(C), pages 1078-1098.
    7. Zilliox, Skylar & Smith, Jessica M., 2017. "Memorandums of understanding and public trust in local government for Colorado's unconventional energy industry," Energy Policy, Elsevier, vol. 107(C), pages 72-81.
    8. Lee, Shun-Chung & Shih, Li-Hsing, 2010. "Renewable energy policy evaluation using real option model -- The case of Taiwan," Energy Economics, Elsevier, vol. 32(Supplemen), pages 67-78, September.
    9. Kriesky, J. & Goldstein, B.D. & Zell, K. & Beach, S., 2013. "Differing opinions about natural gas drilling in two adjacent counties with different levels of drilling activity," Energy Policy, Elsevier, vol. 58(C), pages 228-236.
    10. Zhou, Junping & Tian, Shifeng & Zhou, Lei & Xian, Xuefu & Yang, Kang & Jiang, Yongdong & Zhang, Chengpeng & Guo, Yaowen, 2020. "Experimental investigation on the influence of sub- and super-critical CO2 saturation time on the permeability of fractured shale," Energy, Elsevier, vol. 191(C).
    11. Yasminah Beebeejaun, 2017. "Exploring the intersections between local knowledge and environmental regulation: A study of shale gas extraction in Texas and Lancashire," Environment and Planning C, , vol. 35(3), pages 417-433, May.
    12. Yang, Chi-Jen & Zhou, Yipei & Jackson, Robert B., 2014. "China's fuel gas sector: History, current status, and future prospects," Utilities Policy, Elsevier, vol. 28(C), pages 12-21.
    13. Hu, Xing & Yu, Shiwei & Fang, Xu & Ovaere, Marten, 2023. "Which combinations of renewable energy policies work better? Insights from policy text synergies in China," Energy Economics, Elsevier, vol. 127(PA).
    14. Fabien A. Roques & William J. Nuttall & David M. Newbery & Richard de Neufville & Stephen Connors, 2006. "Nuclear Power: A Hedge against Uncertain Gas and Carbon Prices?," The Energy Journal, , vol. 27(4), pages 1-24, October.
    15. Yadira Mori Clement & Birgit Bednar-Friedl, 2017. "Do Clean Development Mechanism projects generate local employment? Testing for sectoral effects across Brazilian municipalities," Graz Economics Papers 2017-05, University of Graz, Department of Economics.
    16. Fry, Matthew, 2013. "Urban gas drilling and distance ordinances in the Texas Barnett Shale," Energy Policy, Elsevier, vol. 62(C), pages 79-89.
    17. Martins, José & Marques, Rui Cunha & Cruz, Carlos Oliveira, 2014. "Maximizing the value for money of PPP arrangements through flexibility: An application to airports," Journal of Air Transport Management, Elsevier, vol. 39(C), pages 72-80.
    18. Shen, Yung-Chi & Chou, Chiyang James & Lin, Grace T.R., 2011. "The portfolio of renewable energy sources for achieving the three E policy goals," Energy, Elsevier, vol. 36(5), pages 2589-2598.
    19. Timmins, Christopher & Vissing, Ashley, 2022. "Environmental justice and Coasian bargaining: The role of race, ethnicity, and income in lease negotiations for shale gas," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    20. Martin, Nigel J. & Rice, John L., 2012. "Developing renewable energy supply in Queensland, Australia: A study of the barriers, targets, policies and actions," Renewable Energy, Elsevier, vol. 44(C), pages 119-127.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:40:y:2013:i:c:p:183-195. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.