World and Nation

Study sees efficiency, not natural gas, as best way to meet future energy needs

The big buzz at the CERAWeek conference may be natural gas, but a new study says it’s time to light a fire under energy efficiency to meet future energy demands.

The study, unveiled Thursday at IHS Cambridge Energy Research Associates’ annual meeting in Houston, says that of all the options available, efficiency is the best way to improve the supply-demand balance quickly while keeping costs low and greenhouse gas emissions in check.

“It’s the one thing that’s really embraced across the spectrum,” said Daniel Yergin, chairman of IHS CERA. Enthusiasm for efficiency is high “around the world, at the top of the energy agenda, whether you’re talking about China, Europe or the United States.”

That enthusiasm will be needed because doubts remain about the other paths to a cleaner energy future.

The “Shale Gale,” as CERA has dubbed the surge in natural gas production, can’t do the job alone, a number of panelists said Thursday on the fourth day of the five-day conference.

“We need to be careful thinking everything will be solved by cheap natural gas,” said Theodore Craver, chairman and CEO of electric giant Edison International.

And expanding shale gas drilling to Europe and elsewhere may not be as easy as some expect, warned Jean-Francois Cirelli, vice chairman and president of GDF SUEZ.

The location of the shales is not as well known in Europe as in the U.S., and shale development requires enormous amounts of water and more rigs per acre than conventional drilling. With their smaller land mass, Europeans are more likely to bristle at drilling, Cirelli said.

And technologies like carbon capture and storage, which many see as a way to neutralize the impact of fossil fuel consumption on the environment, face significant technological, political and economic barriers.

Underground carbon storage is essentially putting waste under people’s property, said Dan Duellman, director of new generation and carbon capture at American Electric Power.

Texas might be comfortable with the storage, given its long history with the oil and gas industry, he said, but carbon storage might be a harder sell in other parts of the country, never mind getting ratepayers to fund the projects.

The high upfront cost of such projects, which may not always result in usable storage sites, is also hard for utilities to swallow, said Jon Long, vice president of asset development for Entergy.