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Natural Gas for Power Generation Underutilized in Ohio, Researchers Say

The Ohio Environmental Council (OEC) and the World Resources Institute (WRI) said Tuesday that Ohio is uniquely positioned to meet upcoming federal emission standards, especially if it increases its use of natural gas for electricity generation, which the groups said is currently underutilized.

Research analysts from both organizations came together to highlight some of the strides the state has made ahead of a landmark announcement in June, when the U.S. Environmental Protection Agency is expected to unveil proposed carbon pollution standards for existing power plants.

"These standards are a huge deal in terms of CO2 [carbon dioxide] reductions; they're a giant step forward for climate change, and they could be the biggest step the country takes to reduce carbon emissions as part of the president's climate action plan," said WRI Research Analyst Rebecca Gasper.

The calls, though, come at a sensitive time for Ohio. State lawmakers continue to debate freezing the state's renewable energy and energy efficiency standards. In March, Senate Republicans introduced SB 310, which called for changing legislation passed in 2008 that requires utilities to meet annual benchmarks and generate 25% of their electricity from renewable or advanced sources by 2025. As originally written, the legislation called for freezing those standards for 11 years, but earlier this month the bill was amended and approved for a two-year freeze.

The state House of Representatives is debating the bill. Earlier this week, House Speaker William Batchelder said there weren’t enough votes available in the chamber to pass the legislation before the legislature’s summer break. Conservatives pushed the legislation through the Republican-controlled senate after hearing utilities complain for years about the efficiency standards and costly renewable energy sources.

Meanwhile, Ohio, Pennsylvania and West Virginia have rocketed to the top of the nation's onshore oil and gas boom as exploration and production companies continue to ramp-up development in the Utica and Marcellus shales. The gas plays have undermined Ohio’s renewable energy industry somewhat, leading to a back-and-forth lobbying fight on SB 310 that has found environmental groups, efficiency advocates, parts of the business community and even Christian groups warning against final passage of the bill.

At the same time, Ohio remains one of the nation's leading energy consumers, with a population of 11.5 million people, according to the U.S. Census Bureau, and a heavy industrial and manufacturing base. As a national debate continues to unfold about climate change, Ohio's position as the country's fourth leading state for carbon dioxide emissions prompted WRI to include a list of guidelines for how the state can better meet the upcoming federal regulations in a fact sheet series designed to identify opportunities for reducing emissions in the power sector, the nation's single largest source of emissions.

Ohio generates 66% of its power from coal, and WRI and the OEC both agree that the state needs to be utilizing its existing infrastructure to capitalize on growing natural gas production for its generation needs.

"Some of the state's newest and most efficient power plants, which are natural gas combined cycle plants are being underused," Gasper said. "In 2011, they generated a little less than 50% of the electricity they're capable of generating, so if the state could ramp up to 75%, they could reduce emissions by 7% in 2020."

Gasper added that if the state's renewable portfolio standards are met as the 2008 legislation called for, then emissions could be reduced by 7% from 2011 levels in a decade or so.

PJM Interconnection, which coordinates electricity in 13 states, including Ohio, Pennsylvania and West Virginia, has said 20,000 MW of coal-fired power generation is expected to be retired within its system by 2016, which means demand for natural-gas fired power will only grow throughout the region. In less than two months, three natural gas-fired power plants have either been announced or broken ground in Ohio, West Virginia and Pennsylvania (see Daily GPI, May 16a; April 22; April 17)

WRI and OEC made no mention of the struggle power generators faced last winter in securing natural gas for electricity. In comments to FERC last week, the Ohio Public Utilities Commission said a number of forced outages in the region were caused by a dearth of natural gas or equipment failures (see Daily GPI, May 16b).

The Federal Energy Regulatory Commission (FERC) is evaluating its proposal to better coordinate the gas and electric markets by starting the gas day earlier in order to give power generators in the nation's four time zones an adequate opportunity to nominate gas on crowded pipelines for electric generation (see Daily GPI, March 20).

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