The Energy-Environment Nexus

A sustainable, diversified energy future will depend on the wise use of new technologies.

The mission of the National Energy Technology Laboratory (NETL), one of the U.S. Department of Energy’s (DOE’s) 17 national laboratories, is to develop improved technologies for fossil-fuel energy supply, delivery, and end use. NETL implements all of the programs for DOE’s Office of Fossil Energy, and a few for the Office of Energy Efficiency and Renewable Energy, through an onsite research program and through contracts with industry, universities, and other laboratories. NETL focuses on technologies for generating electric power from coal, clean liquid fuels, and natural gas. The lab has more than 1,000 research activities in all 50 states and in several foreign countries.

Figure 1 shows the U.S. electricity generation mix from 1950 to 2000. Fossil fuels provide more than 70 percent of our electricity--52 percent from coal, 16 percent from natural gas, and 3 percent from oil. The issue facing us is how we as a nation can move toward a more sustainable electricity future. The word "sustainable" means different things to different people. To some, it means integration of the social, economic, and environmental domains. To some it means energy that lasts forever. And to some it means energy with no environmental cost for its production and use. Energy from every source has environmental or cost consequences. The challenge for us as a society is to agree on a practical definition of sustainability and then to develop a road map to achieve it. The road map should include public policies, incentives, and research and development (R&D) agendas.

In the past 30 years, the U.S. electricity sector has made excellent progress in improving air quality. From 1970 to 2000, coal use tripled, electricity generation increased by a factor of two-and-a-half, and natural gas use increased by 50 percent. On a tons-per-year basis, nitrogen oxide (NOx) emissions from power plants have been declining since 1980, sulfur dioxide (SO2) emissions have dropped by almost half since 1970, and particulate emissions are about one-tenth of what they were in 1970. Technology is now commercially available to reduce NOx and SO2 to very low levels. The nation is moving toward requiring all fossil-fuel plants to install NOx and SO2 pollution-control equipment. The National Energy Policy proposed three-pollutant control legislation for SO2, NOx, and mercury. Under the reduction levels being considered, SO2 emissions would be one-ninth of their 1970 level, and NOx emissions would be one-fourth of their 1970 level. Of course, these stringent reductions would not be without cost, but we have the technology--and the regulations appear to be coming--to make urban pollution a non-issue.

Global contaminants are an issue, however--especially mercury. The global atmospheric circulation of mercury is 5,600 tons. Utilities in the United States release 41 tons of mercury per year, one-third of U.S. anthropogenic emissions. Proposals have been made to cap mercury emissions at 7.5 tons per year. Achieving this level of reduction will be extremely challenging in terms of cost, timing, and uncertainty of the science of mercury. No commercial mercury-control technologies are available today, but field-scale tests are under way.

The concept of sustainability includes not only air emissions, but also resource production. New technologies have dramatically reduced the environmental impact of exploration for and production of natural gas. Industry today drills fewer wells to supply the same level of resources; at the same time, they produce less drilling waste and less wastewater. Using slimhole drilling, wells now have smaller footprints and cause less damage to unique and sensitive environments. In addition, air pollutants and greenhouse gas emissions have been reduced.

Using new technology, industry is working to further reduce the environmental impacts of oil and gas production. Consider, for example, horizontal and directional drilling. Horizontal wells would enable a hypothetical driller in the center of the District of Columbia to tap gas six miles away in Maryland. The use of this technology has risen sharply. In just 10 years, the number of horizontal wells increased from near zero to 4,000 per year.

The environmental impact of mining coal is also being reduced through improved planning, groundwater management, reclamation practices, and increased use of coal-mine methane.

As the U.S. energy industry moves toward internalizing most externalities, an increasing focus is on emissions of greenhouse gases. Figure 2 shows atmospheric concentrations of carbon dioxide (CO2) and temperature fluctuations as measured from ice core samples at the Vostok station in Antarctica. Current CO2 levels are at 370 ppm--a 30 percent increase over preindustrial levels and higher than at any time in the past 200,000 years. The two curves show that CO2 concentrations and temperatures are correlated, although cause-and-effect relationships are not entirely clear. Nevertheless, the rising concentration of CO2 is cause for concern, and CO2 from energy production and use is a major contributor. We know that the production and use of fossil fuels are responsible for most anthropogenic greenhouse gas emissions. In the United States, CO2 from energy accounts for 82 percent of U.S. emissions. Methane (9 percent) and N2O (5.6 percent) are also significant contributors.

World demand for energy is growing rapidly, but, as history has repeatedly shown, it is difficult to predict future energy demand. In the next 100 years, world energy demand will increase to support growing populations and aspirations for higher standards of living. Demand in industrialized countries may double. Demand in developing countries may increase eightfold, although per capita energy consumption in developing countries will still be much lower than in industrialized countries. Overall worldwide energy use may increase fourfold.

Economic growth has been strongly linked to electricity consumption for the past 30 years (Figure 3). Electricity represents a growing fraction of our energy mix, and increases in electricity prices--and price volatility--affect the economy. In 1970, 25 percent of U.S. primary energy consumption was used to produce electricity. Today, it is 40 percent. The Electric Power Research Institute (EPRI) projects that it could increase to 70 percent as we evolve toward a future in which electricity provides all of our stationary energy and hydrogen provides our transportation energy.

Stabilizing atmospheric concentrations of CO2 will require sharp cuts in emissions. Figure 4 shows worldwide CO2 emissions. In the "business as usual" case (the IS92a curve), world carbon emissions rise from 6 Gtons/year in 1990 to more than 20 Gtons/yr in 2100; the atmospheric concentration of CO2 in 2100 would be around 700 ppm, and rising. A more accurate name for the IS92a curve would be the "innovation as usual" case. It assumes, for example, that in 2035, we will be using large quantities of dedicated commercial biomass crops; the land area required for these crops will be 10 times the land area currently farmed in the state of Iowa. And these 10 "Iowas" will be growing crops with significantly higher productivity than today. The vast majority of renewable energy currently in the R&D pipeline is already assumed in this case.

The lower family of curves shows emission pathways to stabilize atmospheric CO2 concentrations. The 550 ceiling curve, in the middle, shows an emissions pathway that would stabilize atmospheric CO2 at 550 ppm, roughly double the preindustrial level. This is also the lowest level many analysts believe we can practically achieve.

Ultimately, emissions would have to be decreased to slightly more than 2 Gtons per year to maintain a steady state. This would amount to a 60 percent reduction from 1990 levels and a 90 percent reduction from IS92a emissions in 2100. A reduction of this magnitude would be a staggering undertaking, and, to achieve it, we would have to change our energy systems dramatically.

The electricity sector produces approximately one-third of current CO2 emissions. The transportation sector also produces roughly one-third. The remaining third is produced by a mix of industrial, residential, and commercial emissions. Petroleum produces 42 percent of our emissions, followed closely by coal at 37 percent, and natural gas at 21 percent. Coal is the largest producer of emissions in the electricity supply sector. If emission caps are imposed at some future time, power plants may be expected to do more than their proportionate share to reduce emissions for several reasons:

• Electric power plants are among the largest point sources of CO2 emissions.
• Because capital and management are centralized, the electricity sector might be easier to regulate than the industrial or transportation sectors.
• Electricity production cannot migrate offshore.