Environmentalists raised concerns of the impact of natural gas production on climate change as the U.S. transitions away from coal and to natural gas which was previously viewed as a cleaner fossil fuel and “bridge” for the industry to more environmentally friendly forms of energy.

Shareholder advocacy group As You Sow partnered with Energy Innovation to release a study titled “Natural Gas: A Bridge to Climate Breakdown” to look at the potential climate impacts of natural gas as many states enacted legislation in recent years to transition away from carbon-based energy.

The report cautioned that combustion of natural gas, a process known as flaring, and leaks of methane and other volatile organic compounds (VOCs) could generate significant climate impacts, and that methane leaks could be worse than previous estimates.

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Some reports suggested methane leaks could be 60 percent higher than reports from the U.S. Environmental Protection Agency.

Lila Holzman, energy program manager at As You Sow said utility companies should reduce investments in natural gas infrastructure to strengthen the use of renewable resources such as wind and solar.

“As climate change increases risk to investor portfolios, shareholders must scrutinize what role fossil gas can play in the inevitable transition to a clean-energy economy,” Holzman said.

“Utilities clinging to business models that rely on fossil fuels are jeopardizing their ability to meet critical climate goals (including their own) and will miss out on opportunities to benefit from new technology advances.”

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While many utilities have announced plans to reduce carbon emissions, the study warned that further investment in natural gas infrastructure could threaten such efforts.

Xcel Energy, a major electricity utility in southeast New Mexico announced in 2018 that it was aiming for zero-carbon electricity by 2050, and New Mexico Gov. Michelle Lujan Grisham enacted the Energy Transition Act last year to move the state to carbon-free electricity by 2045.

“The Energy Transition Act is the work product of many, many months and many important stakeholders,” Lujan Grisham said. “The result is a groundbreaking push toward the clean energy future New Mexico should and indeed must have.

“We can be a global leader.”

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But Mike O’Boyle, director of electricity policy at Energy Innovation worried those goals could be at risk as any new natural gas assets could be “stranded” as companies divest from natural gas in favor of renewable energy supplies such as wind and solar.

“Renewables like wind and solar, complemented by flexible zero-carbon resources like storage and demand response, are already providing the same reliability services and energy as new natural gas plants at lower cost,” he said.

“New gas infrastructure is increasingly likely to become stranded — the natural gas ‘bridge’ must end now if investors want to avoid massive stranded asset cost risk.”

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The report showed natural gas has about half the climate impact of coal production and called for reductions in both forms of energy.

“In other words, while coal must go first, new gas is a bridge to climate breakdown – we must begin phasing down both gas and coal today to achieve the level of decarbonization that science demands,” the report read.

Natural gas’ impact on climate change could cost hundreds of billions of dollars by 2100 in the U.S. if natural gas emissions continue, read the report, and if global warming is kept to 1.5 degrees Celsius, as prescribed by the 2015 Paris Climate Accord, savings were projected at $20 trillion during the same time.

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The study also pointed to $1 trillion at risk from climate impacts in a June 2019 report from 215 of the largest global companies.

“Achieving the Paris Agreement’s goal of keeping warming to 1.5°C is an imperative for investors to protect the value of their portfolios in the medium to long term, and utilities have a critical role to play to achieve this target,” the report read.

“Power companies that lag behind in reducing their greenhouse gas emissions are increasing the risk of catastrophic climate impacts that threaten shareholder value.”

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The federal Energy Information Administration projected 50 gigawatts of new natural gas facilities to be built between 2019 and 2024, and a report from the Rocky Mountain Institute found the U.S. could spend up to $1 trillion on new gas-fired power plants and fuel by 2030.

“Given the plethora of clean energy commitments from states and municipalities, coupled with significant cost declines projected for clean alternatives, these gas infrastructure assets will either become stranded or need to be retrofitted with expensive and relatively unproven carbon capture and storage (CCS) technology to remain viable,” the study read.

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Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on Twitter.