SACE | Southern Alliance for Clean Energy
New Report Finds Alabama One of 16 States at High Risk of Natural Gas Overreliance
Contact: Ashley Siefert from UCS, 202-331-5666 or Jennifer Rennicks from SACE, 865-235-1448
MONTGOMERY, Ala. (October 13, 2015)—As the United States undergoes a dramatic shift in how it generates electricity, some states, including Alabama, may be relying too much on natural gas rather than turning to affordable renewable energy sources like wind and solar power, according to a new analysis.
The analysis, Rating the States on Their Risk of Natural Gas Overreliance, released today by the Union of Concerned Scientists (UCS), examines each state’s natural gas past, present and future to determine its risk of natural gas dependency and found that Alabama and 15 other states are at high risk of over-relying on natural gas, which could have significant financial consequences for electricity consumers.
In fact, one-third of Alabama’s in-state electricity generation already comes from natural gas plants, an increase of more than 17 percentage points since 2008. This number is only expected to grow since 98 percent of Alabama’s new or converted electricity capacity coming online between 2014 and 2017 is natural gas-fueled.
“Natural gas has been important for moving the country away from coal, but substituting our dependence on one fossil fuel for another isn’t going to pay off in the long run, and poses problems for consumers now and later,” said John Rogers, senior energy analyst at UCS and report co-author. “States and utilities are the ones gambling on natural gas, but consumers will ultimately pay for these bad bets.”
In many cases, utilities are replacing, or plan to replace, portions of their coal fleets with new natural gas plants due to high coal costs and low natural gas prices. But while they may be low now, natural gas prices are historically volatile, with price swings tied to increasing demand, extreme weather events, and uncertainties about available gas supplies.
Relying too heavily on natural gas can also expose consumers to higher costs in several ways beyond simple prices swings. For example, in addition to exposing consumers to the rising costs of carbon pollution, natural gas infrastructure is likely to be under-utilized or even abandoned as renewables continue to outcompete gas in affordability, posing additional financial risks. Consumers in states that rely too heavily on natural gas will feel these negative economic impacts more acutely than those in states with a more diverse energy supply that includes larger percentages of solar, wind and energy efficiency.
According to the Southern Alliance for Clean Energy (SACE), Alabama regulators and utilities need to recognize these impacts as they develop the state’s compliance plan for the Environmental Protection Agency’s Clean Power Plan and in future utility resource planning.
“We believe a diverse portfolio that maximizes renewable energy and energy efficiency is the best path forward for Alabama’s energy future,” said Amelia Shenstone, campaigns director with SACE. “Alabama Power just took a big step in the right direction with its recent move to add a substantial amount of renewable energy, and the fact that they can do so without projected rate impacts indicates that we need to keep moving in that direction.”
The UCS analysis, Rating the States on Their Risk of Natural Gas Overreliance, examines five factors indicating risk of natural gas overreliance:
- How much of a state’s electricity generation comes from natural gas
- How much a state has increased its use of natural gas for in-state electricity generation in recent years
- How much of a state’s electricity generation capacity being built is relying on natural gas
- How much of a state’s electricity generation capacity is expected to be fueled by natural gas in the near future
- How much carbon pollution a state’s power plants emit
States were given low, moderate or high designations for each of these five categories. A total of 33 states were classified as “high risk” in at least one category, and 16 states were classified as “high risk” in three or more categories. Alabama was one of six states classified as “high risk” in four or more of the five categories.
Click here to view the national press release.
Click here to view a related blog post by Rogers describing the methodology and findings of this analysis.
The Union of Concerned Scientists puts rigorous, independent science to work to solve our planet’s most pressing problems. Joining with citizens across the country, we combine technical analysis and effective advocacy to create innovative, practical solutions for a healthy, safe, and sustainable future. For more information, go to www.ucsusa.org.
Founded in 1985, the Southern Alliance for Clean Energy is a nonprofit organization that promotes responsible energy choices that work to address the impacts of global climate change and ensure clean, safe, and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org.