Challenges at the Interface of the Natural Gas and Electric Systems
Creators: name: Smillie, Sean
Publisher: name: Carnegie Mellon University
Year: 2023
Subjects: Public Policy

description: In the United States, natural gas consumption has grown significantly in recent years, growing by 39% from 2008 to 32 EJ in 2022. This dissertation contributes to understanding key challenges arising from this growth. One challenge is the increasing interdependence between the natural gas and electric systems, which presents a growing reliability risk. Most previous analyses focus on the increasing dependence of the electric system to gas deliveries, as natural gas’ share of electric generation increased from 21% in 2008 to 38% in 2021. The reverse dependence, where some compressor stations spaced every 50-100 miles along gas transmission lines rely on the electric grid, had not been rigorously examined. To determine the exposure of the natural gas interstate pipeline system to electric outages, I identify electrically-driven compressor stations in the US, finding that 10% depend on grid electricity. Using pipeline hydraulic models, I demonstrate that the consequence of disrupting power to a single compressor station can be downstream gas shortages to more than 2 GW of downstream gas-powered electric generators. I find that historical events show this is not just a theoretical possibility. In northern Florida I show that such an outage can be larger than the most severe single-cause failure currently considered in electric reliability planning. Electric utilities should incorporate the identified facilities into critical facility lists. Establishing a federal gas reliability organization could improve gas reliability by establishing appropriate reliability reporting, incident investigation, and minimum industry standards. Second, fuel switching from coal to natural gas in the US electric sector has contributed to recent modest decreases in greenhouse gas (GHG) emissions, a strategy which proponents of liquefied natural gas (LNG) terminals argue their projects would replicate elsewhere. To test this assertion, I conduct a consequential lifecycle analysis (LCA) of GHG emissions from North American LNG export projects, including the change in global natural gas and coal use resulting from the market effects of increased LNG trade. For a 2.1 billion cubic feet per day (Bcfd) LNG export facility, I estimate a change in global GHG emissions of -39 to +11 Mt CO<sub>2</sub>e (90% range) with a median value of -8 Mt CO<sub>2</sub>e. Reductions in emissions are more moderate and less certain than suggested by previous methods, which find a median value of -36 Mt CO<sub>2</sub>e for this size project. The more modest reduction is due to estimates of higher domestic coal use and a smaller decrease in international coal use than assumed by previous methods. To accurately estimate the global net change in greenhouse gas emissions from LNG terminals, project regulators and policymakers must account for market effects. Third, more than half of US households use natural gas to heat their homes, which accounts for 7% of US GHGs. Electrification using heat pumps is often seen as the most promising method of decarbonizing this energy service. However, fully electrifying building heat is challenging, as it would significantly increase peak electric loads during cold weather. I evaluate the potential for hybrid heat pumps to cost-effectively decarbonize space heating while avoiding costly peak electric generation capacity costs. Hybrid heat pumps use an electric heat pump to satisfy the majority of annual heat demands but switches to a fueled heating source like a gas furnace during peak demand. I find that avoided electric generation capacity costs justify hybrid heat pump installations in colder northern regions, but not in southern regions. In northern regions, the avoided cost is approximately $2500 per dwelling, which is sufficient to justify the additional installation costs of a hybrid system compared to their all-electric heat pump alternative. In addition, the consumption of natural gas required for hybrid systems is small, less than 300 PJ in all scenarios. This is within estimates of renewable natural gas supply capacity found in the literature.