Natural Gas Is a Bad Investment

Illustration for article titled Natural Gas Is a Bad Investment
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Natural gas is the fastest growing energy source in the U.S., and that’s a big problem. Last year, gas was the number one contributor to the growth in U.S. carbon emissions. When gas infrastructure leaks, it also emits methane, which recent research shows is even worse for the climate than previous dire estimates showed. And according to a new report from shareholder advocacy group As You Sow and policy think-tank Energy Innovation, it’s not even a good investment.

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The U.S. is on track to spend some $1 trillion on new gas-fired power plants and fuel by 2030, according to the Rocky Mountain Institute. And while natural gas been dubbed a bridge fuel by some (centrists), the time to be across that bridge is here. The new analysis shows that the nation’s energy sector’s gas buildout is putting utility investors at risk of losing tens of billions of dollars.

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The climate crisis, which natural gas fuels, poses risks for investors. Extreme weather physically threatens energy infrastructure, as evidenced by the 1.1 million people in and around New York lost power during and after Hurricane Sandy or the damage the 2018 California fires caused to power lines.

Investing in clean energy is not only the better option for the climate, it’s also increasingly more affordable and, frankly, financially safer. As governments and companies make more commitments to kick fossil fuels, gas infrastructure assets are increasingly at risk of becoming stranded, and they could soon become worthless.

The report argues that investors should play their part to stop the buildout of natural gas. It suggests they directly ask companies to analyze emerging risks, join influential investor coalitions such as Climate Action 100+ and Climate Majority Project (major investment firms like BlackRock have done this), and push to shift the regulations to encourage the transition to clean energy. At least some firms have turned away from the most damaging types of extraction like Arctic oil, but there’s clearly a lot more work to do.

Shareholders can play an important role in pushing that transition, as they’re well positioned to encourage utilities to reduce the financial risks that natural gas poses. But to be clear, we shouldn’t phase out of fossil fuels like natural gas because they’re a bad investment. We should stop extracting and burning them because they’re ruining ecosystems, destroying people and the planet. Still, the new report is just more evidence that we need to stop building new natural gas infrastructure, fast.

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Staff writer, Earther

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DISCUSSION

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I always thought Rocky Mountain Institute was sort of centrist. At least the founder Amory Lovins seemed to be. RMI does a lot of corporate consulting as a nonprofit energy and environment consultant. Not a bad gig, when other consulting firms pay corporate taxes. Lovins was pushing the hydrogen economy back in the 1990s. Funny thing is that renewable hydrogen (hydrogen from wind and solar driven electrolysis) is moving along swimmingly.

Anyway, let’s lay out US energy consumption in terms of monthly quadrillion BTUs or “Quads.” The point of all this is to show how much work needs to be done and to show where we are at with fossil fuels, even still.

US consumes around 8 quads of energy a month (electricity, heating, transportation, whatever). Renewables (the crimson line below), including biomass, wind, solar, hydro, geo, is getting close to about 10 percent of energy consumption. As you can see, coal (blue) is falling like a rock. Renewables recently surpassed it. Natural gas (burnt sienna) is pushing coal out. Petroleum is moving in the wrong direction as crude prices dropped. Nuke (yellow) keeps steady as she goes.

Now let’s breakdown renewables for energy consumption (all sectors). Wind (yellow) and solar (green). Hydro (blue) continues steady due to the first New Deal. Geothermal is almost endless, thanks to mother earth’s belly, but hasn’t really caught on.

What’s that crimson line below? That’s biomass. The big boost in biomass consumption is biofuels like ethanol and biodiesel starting after the 2005 energy plan.

Let’s hope progressivism catches on at engineering departments and schools like it has at liberal arts colleges. Someone needs to understand ultra high voltage wiring.

Our electricity mix as of end 2019: pretty gassy. a lot less coally. wind and solar moving swimmingly.