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Natural Gas Could ‘Muscle Out’ Renewables

A report from the International Energy Agency warns that natural gas could have significant drawbacks.

Natural gas burns cleanly, emits half as much carbon dioxide into the atmosphere as burning coal, and is extremely plentiful—especially due to new extraction technologies such as fracking. It seems like a perfect fuel for battling climate change.

But natural gas won’t be enough to reach emissions levels thought to be necessary to keep warming below two degrees, according to a new report (pdf) from the International Energy Agency. What’s more, it could have the negative effect of delaying the deployment of renewable power sources that could help reach those targets.

The report warns that cheap natural gas could cause government support for renewable energy, which has taken the form of mandates and other incentives, to waver.

Renewable energy is supposed to become more competitive as fossil fuels rise in price, due to increasing demand. But abundant new natural gas supplies, such as in the Marcellus Shale in the United States, could help keep natural gas cheap.

The report says that “lower gas prices may put pressure on some governments to review their policies and level of support” for renewables. In a press release, IEA executive director Nobuo Tanaka said: “Its increased use could muscle out low-carbon fuels, such as renewables and nuclear - particularly in the wake of the incident at Fukushima and the likelihood of a reduced role for nuclear in some countries. An expansion of gas use alone is no panacea for climate change.”

So, if natural gas does erode support for renewables, it could delay the cost reductions that come with it, making it even harder for renewable power to compete.

Natural gas could, however, be good for energy security, since natural gas is widely distributed around the world, the report said. If production were developed around the world, it would make it less necessary to rely on sometimes fickle suppliers, which in particular have left Europe vulnerable to supply disruptions.

The report notes that demand for natural gas is expected to be particular strong in China, which in its 12th Five-Year Plan called for the tripling of natural gas consumption.

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