Major US Utility focuses on zero carbon aspects of natural gas
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- Sep 29, 2020 9:42 pm GMTSep 29, 2020 5:24 pm GMT
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Southern Company has just released a “net zero” document, that clearly will get the company nowhere near net zero, but it may get CEO Tom Fanning to retirement age, after which he clearly doesn’t care.
Southern Company, as the name suggest, runs a lot of utilities in the South of the US, including Alabama Power, Georgia Power, Mississippi Power, PowerSecure, Southern Nuclear, Southern Power, Southern Linc Natural Gas Utilities, Atlanta Gas Light, Chattanooga Gas, Nicor Gas and Virginia Natural Gas. Guess what? The plan is all about gas.
While the document makes it clear that without gas, Fanning does not believe that his company can offer a stable, resilient supply of electricity, his main argument is an economic one – gas is cheaper than anything else. Now at Rethink Energy we know that’s just not true, and that most State Utilities Commissions will force companies to think again, when they simply churn out the old “business as usual” business case. But given that Southern is also a major supplier of gas to individual homes and businesses, and that seems to bring in about half of its revenue, it would lose out on bulk buying if it deserted gas.
When is net zero not net zero? When you do not count the greenhouse gases of customers burning your gas in their homes, and when you say you will rely on Carbon Capture to convert your gas guzzling turbines into zero rated generation, or Direct Air Capture devices (which have not successfully been invented yet) to turn you carbon negative. As we have proven a hundred times, that cannot be done economically. So the financial gains from not throwing out old gas equipment, are lost as experiments in Carbon Capture and Direct Air Capture try and fail, and there is federal pressure for all US States to decarbonize, and there will be, because the Republicans will not win the next 3 elections. Then Southern will have a significant number of stranded assets and it will become a laughing stock on the US stock markets.
It does say that it will take a responsible view of upstream emissions, and try its hardest to eliminate methane leaks, but most methane leaks occur before companies like Southern get the gas into their pipelines. Today it is worth $55.4 billion, however while natural gas is really cheap in the US, one whiff of a carbon tax in that country, and it will be underwater immediately, and when the rest of the world wants to pressure the US on climate change, it will point to it being behind on introducing a carbon market. Its only saving grace will be if hydrogen markets spring up in the US, and it can convert its natural gas turbines to hydrogen and push hydrogen to people’s homes – but while it boasts about its R&D profile, it only mentions work on CCUs, not in hydrogen.
This diagram shows clearly how Southern thinks about gas, and what will turn it around into zero carbon, note direct air capture and biomass on the bottom line. Frightening.
This article is running in the current edition of Rethink Energy