News Releases

Traditionally, oil prices have been used to gauge the natural gas market; but new research shows that the future of what is currently a cheap fuel is really anyone's guess.

Natural gas prices neared the lowest they've been in about a decade this past winter, as utilities scrambled to take advantage of the fuel's low price tag and producers began to turn away from the low-profit fuel. According to new numbers from the U.S. Energy Information Administration, the proportion of natural gas used to generate electricity soared to almost 35 percent in February—the highest ever for that month—while production saw its biggest decline in a year. These factors have led some to believe prices will rise again, and soon. Not so fast, say researchers at MIT.

Their study, featured in the latest issue of The Energy Journal, compares oil and natural gas prices from the early 1990s to today, showing a relationship between the pricing of the two fuels. But the nature of that relationship is constantly changing and is subject to external pressures, making it extremely difficult—if not impossible—to predict the price of natural gas in the short or long term.

"The tie between gas and oil has been exaggerated," says John Parsons, the lead author of the study and executive director of MIT's Joint Program on the Science and Policy of Global Change and Center for Energy and Environmental Policy Research. "Parity will get re-established, but it might take a long time and it might be at a different level than you thought."

The research shows that, besides the price of oil, two forces heavily influence the gas market: long-term forces, like technological change, and short-term volatility due mostly to weather or seasonal changes. Both of these forces are currently at work, as prices per million British thermal units have fallen from $10 back in 2008 to $4 last fall to $2.40 today.

Parsons attributes a majority of the drop since last fall to weather, but points to new technology known as hydraulic fracturing—along with other factors such as the global recession—as the cause of the much larger drop in price over time. He says the price may recover from the short-term drop quickly—perhaps back to $4 in just a couple years—but price recovery from the effects of hydrofracking technology could take much longer.

"And so the danger is [that] we say that there's parity" between oil and gas prices, Parsons says, "and it gives people the impression that the parity establishes itself quickly and they discount the price signal and try to keep going with producing gas."

This is what happened when prices fell in the past: Producers were slow to take the price fall seriously because of the usual short-term volatility attributed to weather and seasonal changes.

How the gas market will shape up in the long term is anyone's guess, Parsons says, largely because untapped resources are a wild card. Right now, the U.S. has a very cheap resource that provides a short-term cushion of low-priced gas. If hydraulic fracturing turns out to have limited applications, gas prices probably won't stay low for very long. But if other parts of the world rich in natural gas choose to use hydraulic fracturing, natural gas could turn into a revolutionary fuel, he says.

That will "affect the price of gas and the price of oil and the pattern of electricity production globally," Parsons says. "But none of us know."

The researchers conclude that as much as oil and gas prices have been somewhat intertwined in the past, it is likely they will continue to affect each other. Future changes in gas-to-liquid technology, for example, would further strengthen the gas-oil relationship—likely driving oil prices down, gas prices up, and re-establishing some parity between the two.

RELATED — A Shale Gas Revolution?

Toyota’s Tom Stricker shares his view with MIT students, faculty
Video: Watch the event

With the advisement of several Joint Program on Global Change researchers—including the co-director Ron Prinn and co-director emeritus Jake Jacoby—the MIT Museum opened a new exhibition “Rivers of Ice: Vanishing Glaciers of the Greater Himalaya.” The exhibit draws from mountaineer and filmmaker David Breashears’ breathtaking photographs, and places them in context with those of earlier mountaineer photographers—revealing the glacial melt that has occurred over time.

Breashears, who took the photos throughout his forty-five expeditions to the Himalaya, views the Rivers of Ice exhibition as an opportunity to trigger public dialogue as scientists and policymakers work to better understand what exactly is happening to the glaciers of the Greater Himalaya. Formed by the collision of continents, the water from the glacial ice melt in the Himalaya contributes to watersheds that serve the drinking, agriculture and business needs of more than 1 billion people throughout Asia. As the snow cover melts and the glaciers of the Greater Himalaya retract and change, the need for greater and more detailed understanding of their importance to human and ecological systems increases.

Breashears hopes the exhibit—and a related symposium taking place on Saturday, April 21—will provide insight into some of the groundbreaking research being done to better understand the glaciers’ potential impact on global environmental issues.

Rivers of Ice, once viewed, cannot be forgotten. By experiencing the photography 'in the round' and at large scale, by viewing artifacts from expeditions past and present, and by learning about the people who call the Himalaya home, MIT Museum visitors gain a deeper understanding of the grand beauty of these mountains, as well as their significance to the global challenges we face today.

 
The exhibit, which will be open from April 13, 2012 to March 17, 2013, is a collaboration between the MIT Museum, GlacierWorks, and the Asia Society and designed by ThincDesign.

More information about the exhibit can be found here: web.mit.edu/museum/exhibitions/rivers-of-ice.html

In an effort to share what is known, what isn't, and what can and cannot be done about climate change, MIT's John Reilly and Kerry Emanuel joined UMass Amherst researchers as part of a "Global Warning" panel convened by The Boston Globe.

Today’s global challenges will significantly affect how we grow our food. But these challenges are so complex and intertwined that response measures require collaboration and a broad, integrated lens.

Despite improvements in air quality, the economic impact of air pollution has increased dramatically, new MIT study shows.

By: Vicki Ekstrom, Joint Program on the Science and Policy of Global Change

Although China has made substantial progress in cleaning up its air pollution, a new MIT study shows that the economic impact from ozone and particulates in its air has increased dramatically.

In recent decades, China has experienced unprecedented growth. But that growth comes with a steep price tag, according to the study, which appears in the February edition of the journal Global Environmental Change. The study, by researchers at the MIT Joint Program on the Science and Policy of Global Change, analyzes the costs associated with health impacts from ozone and particulate matter, which can lead to respiratory and cardiovascular diseases.

Quantifying costs from both lost labor and the increased need for health care, the study finds that this air pollution cost the Chinese economy $112 billion in 2005. That’s compared to $22 billion in such damages in 1975.

“The results clearly indicate that ozone and particulate matter have substantially impacted the Chinese economy over the past 30 years,” even though there have been significant improvements in air quality detected over this period, says Noelle Selin, an assistant professor of engineering systems and atmospheric chemistry at MIT.

The researchers discovered this large economic impact because they looked at pollution’s long-term effect on health, not just the immediate costs. In doing so, they found two main causes for the increase in pollution’s costs: rapid urbanization in conjunction with population growth increased the number of people exposed to the pollution, and higher incomes raised the costs associated with lost productivity.

“This suggests that conventional, static methods that neglect the cumulative impact of pollution-caused welfare damage or other market distortions substantially underestimate pollution's health costs, particularly in fast-growing economies like China,” says Kyung-Min Nam, one of the study’s authors and a postdoc in the Joint Program on the Science and Policy of Global Change.

Nam gives one example from the study showing that pollution led to a $64 billion loss in gross domestic product in 1995. That compares to static estimates from the World Bank that found the loss to be only $34 billion.

In this way, Selin says, “this study represents a more accurate picture than previous studies.”

Kelly Sims Gallagher, an associate professor of energy and environmental policy at Tufts University’s Fletcher School, agrees: “This important study confirms earlier estimates of major damages to the Chinese economy from air pollution, and in fact, finds that the damages are even greater than previously thought.”  

The researchers calculated these long-term impacts using atmospheric modeling tools and comprehensive global economic modeling. These models proved especially important when it came to assessing the cumulative impact of ozone, which China has only recently begun to monitor. Using their models, the MIT researchers were able to simulate historical ozone levels.

China has become the world’s largest emitter of mercury, carbon dioxide and other pollutants. In the 1980s, China’s particulate-matter concentrations were at least 10 to 16 times higher than the World Health Organization’s annual guidelines. Even after significant improvements by 2005, the concentrations were still five times higher than what is considered safe. These high levels of pollution have led to 656,000 premature deaths in China each year from ailments caused by indoor and outdoor air pollution, according to World Health Organization estimates from 2007.

“The study is evidence that more stringent air-pollution control measures may be warranted in China,” Gallagher says — because of not just the health effects of pollution, but also the economic effects.

China is taking steps to respond to these health and economic concerns. In January, the nation set a target to limit its carbon intensity (the amount of carbon emitted per unit of gross domestic product) by 17 percent by 2015, compared with 2010 levels.

While the MIT study looked at the benefits of pollution-control measures on health in China, it did not calculate the costs of implementing such policies. That is work the Joint Program on the Science and Policy of Global Change’s new China Energy and Climate Project hopes to accomplish.

“We’re just getting started on an exciting program of work that will involve modeling the energy, environmental and economic impacts of climate and air-quality policies in China,” says Valerie Karplus, director of the China Energy and Climate Project. “The current study has provided initial insights and a strong foundation for this research going forward.”

The China Energy and Climate Project will analyze the impact of existing and proposed energy and climate policies in China on technology, energy use, the environment and economic welfare.

 By: Vicki Ekstrom, Joint Program on the Science and Policy of Global Change

EPA's top air official, Gina McCarthy, leads roundtable discussion.

Looking to tap the knowledge of some of the nation's leading energy and environment experts, and update them on new and proposed standards, the U.S. Environmental Protection Agency's top air official visited MIT's campus last Friday, Jan. 27. Gina McCarthy, EPA's assistant administrator for the Office of Air and Radiation who led a roundtable discussion which was hosted by MIT's Joint Program on the Science and Policy of Global Change and moderated by the program's co-director, John Reilly.

A return home for the Massachusetts native who spent more than 25 years working on environmental issues in the state, McCarthy said she saw the meeting as an opportunity to "learn from the experts who have been so valuable in providing the research and the science" her office needs to be successful.

Robust science, and clear cost-benefits associated with that science, is critical, McCarthy said — a lesson roundtable participant and environmental economics Professor Michael Greenstone helped her realize when he was the chief economist for President Obama's Council of Economic Advisers during the first year of the administration.

"I think the agency has tremendously benefitted from that, specifically the air program because we are under constant scrutiny," McCarthy said. "Everything these people know intersects very directly with the work I've been doing for the president."

The visit came just days after President Obama's State of the Union address, where he laid out his intention to take an "all-of-the-above" approach toward America's energy future.

"In this administration we are looking for everything from commitments to renewables, that would be wind and solar, but also recognizing that coal will have a place in the mix," McCarthy said of the president's vision. "We're asking ourselves from the EPA side what that means for our upcoming rules on greenhouse gases and source performance standards for powerplants. How do you write it in a way that's consistent with the rules and still allows a place for new coal and new technologies?"

Leadership on mercury
 

Joint Program on Global Change
Co-Director John Reilly

Noelle Selin, who participated in the discussion, was also excited to hear the president mention mercury.

"I do think that the Mercury and Air Toxics Standards are something we've been waiting for, for a long time, and they are a really forward-looking rule," Selin said.

She noted that Massachusetts has lead the way in controlling mercury, perhaps due to McCarthy's earlier leadership, and that the state will especially gain from the national rule because it is upwind of polluting coal-mining states to its south.

• See "MIT researcher: U.S. taking leadership on mercury in the environment" to learn more about Selin's view of the mercury standards.

Mentioning the global negotiations on mercury — scheduled to wrap up in January 2013, after the next presidential election — Selin asked what role the new standards might play in the global arena as China's mercury emissions continue to grow and endanger the gains made by the new rule.

"We were hoping that if we put out the powerplant rule [mercury standards] that would bolster our role in the discussion," McCarthy said. "It was one of the issues we considered when we were going through the process of forming the rule. We had to do our part … we had to have a legitimate position in the international discussion." 

Tapping the value of natural gas

McCarthy acknowledged that the mercury standards come while the cost of natural gas is low, which she said is "changing the energy world" and making some coal-fired powerplants "ineffective, inefficient and not competitive."

MIT Energy Initiative Director Ernest Moniz agreed: "I think we all agree that the mercury rules are absolutely critical in terms of displacing some coal, in addition to the economics of coal and gas with natural gas prices below $3 per million Btu."

But Christopher Knittel, an energy economics professor at the MIT Sloan School of Management, pointed out that natural gas deposits can be viewed as a huge opportunity — but also, a huge risk.

One of the challenges with natural gas is that the extraction process — a process called hydraulic fracturing — emits Volatile Organic Compounds (VOCs), such as methane, which cause smog and are associated with some health effects such as cancer. Methane is also a greenhouse gas that contributes to climate change.

Richard Schmalensee, director of the Center for Energy and Environmental Policy Research, addressed another challenge: the role that states play.

"The state's roles are problematic because you've got all this gas in places that have never had experience with anything like it," Schmalensee said.

McCarthy said there is a need for standard best practices within the industry — a topic the president addressed in his speech, as he challenged natural gas companies not to follow in the footsteps of the oil industry in terms of polluting now and worrying about it later.

"The good news about that is when you capture the VOCs you capture the methane. When you capture methane you sell it," McCarthy said. "So the cost-effectiveness of those strategies is quite good."

The EPA is close to finalizing a rule in April 2012 that would reduce VOCs from the oil and natural gas industry.

Meeting the Climate Challenge

The inclusion of climate change was another exciting point for McCarthy in the president's address.

But Susan Solomon, a professor of atmospheric chemistry who recently joined MIT from the National Oceanic and Atmospheric Administration (NOAA), said she thought the president missed an opportunity to expand on that point.

"This issue of climate change isn't one that's going to be solved by everyone pitching in. It's not like recycling where if we can all do our part we'll be better off," Solomon said. "It really does require new technologies and investments. So the most important thing that a citizen can do is to engage in a discussion about that and I think he missed an opportunity to call for engagement, including by Republicans."

McCarthy said one of the challenges of the present situation is that nobody wants to invest in anything that doesn't offer an immediate payback. The innovative new technologies needed to actually make a difference in the climate challenge are years, perhaps decades, away and require significant investments.

"And I think it's the government's job to look way beyond the immediate payback by establishing priorities for research and innovation," McCarthy said.

EPA's new greenhouse gas reporting data is one sign of progress that McCarthy believes has helped advance the climate change conversation.

"I actually think that has spurred tremendous amounts of opportunity for climate change to get back into a reasonable, rational discussion," McCarthy said. "I'm excited that the president is talking about that — as well as clean energy. Not replacing one for the other. Because it is a challenge we need to meet head on."

 

 

 

By: Vicki Ekstrom, Joint Program on the Science and Policy of Global Change

SOURCE: EPA

Americans have long known the dangers of mercury in our environment, with doctors repeatedly warning pregnant women to remove fish from their daily diets. But despite this solid knowledge of the health impacts, the United States has never regulated mercury emissions from powerplants — our nation’s number one source of mercury — until now.

Last month, the Environmental Protection Agency (EPA) issued Mercury and Air Toxics Standards. The standards require coal-fired powerplants to install scrubbing technology that will cut 90 percent of their mercury emissions by 2015.

To better inform local residents about the new protections, Noelle Eckley Selin — an assistant professor in MIT's Engineering Systems Division and Department of Earth, Atmospheric and Planetary Sciences and a researcher in MIT’s Joint Program on Global Change — this week joined EPA Regional Administrator Curt Spalding and other public health experts at a public availability session at the East Boston Neighborhood Health Center.

“These mercury standards help prevent the developmental delays and neurological damages that could come from eating contaminated fish,” Selin said at the Thursday event.

At MIT, Selin looks at the pathways by which mercury reaches the environment and the effect it has on human health once it gets there. She also analyzes the steps regulators could take — and in some cases have taken — to prevent further contamination.

“There’ve been proposals for a long time to regulate these emissions from coal-fired powerplants,” Selin said in an interview with the Los Angeles Times when the rules were first released on Dec. 21, 2011. “The earlier incarnation of this was the Clean Air Mercury Rule, which was a cap-and-trade proposal for mercury, and that was challenged in the courts and then thrown out. And now this is another try at regulating, but it’s been a long time in coming.”

Massachusetts began controlling mercury in the 1990s. Since then, the state has reduced mercury emissions by 91 percent, according to Massachusetts Department of Environmental Protection Commissioner Kenneth Kimmell.

“It has been a major source of frustration for us that even though we’ve reduced our mercury rates by so much, many of our water bodies are still off limits to fishing because of pollution from upwind states,” Kimmell said at the Thursday event.

Selin, 2009 Annual Review

Massachusetts’s experience shows that tough standards can have a substantial effect on the environment, Selin said. But federal regulations such as the Mercury and Air Toxics Standards are necessary because of the pollution that comes from powerplants in coal mining and producing states.

Health benefits

Rachel Murphy of Cambridge has a 6-year-old daughter with severe asthma. Her daughter’s asthma is so bad that at times she coughs hard enough to burst blood vessels in her eyes.

“Rachel can get the best medicine possible, but she can’t control the air her daughter breathes,” New England’s American Lung Association President Jeffrey Seyler said at the event.

The air toxics standards are expected to help tens of thousands of children such as Murphy’s daughter by preventing 30,000 cases of childhood asthma symptoms and about 6,300 fewer cases of acute bronchitis among children each year, according to EPA estimates.

Vulnerable populations such as infants will also be helped specifically because of the mercury standards under the new rule.

“These will especially protect newborns who are at a greater risk during their development,” Selin said. “It’s estimated more than 300,000 newborns in the U.S. are exposed in utero to dangerous levels of mercury. This can cause lower IQ and neurological damages.”

Dr. Alan Woolf, the director of the Pediatric Environmental Health Center at Children's Hospital in Boston, agrees.

“Mercury is associated with long-lasting and potentially irreversible effects on the brain and nervous system,” Woolf said at the event. “These effects can reduce a child’s intelligence, can change their behavior, and can cause seizures, muscle weakness, paralyses and other neurologic injuries limiting their future as productive citizens.”

International implications

The United States’s leadership in regulating mercury comes at an important time, as countries around the world have been negotiating a global, legally binding mercury treaty since June 2010.

The third of five planned United Nations negotiating sessions occurred in November in Nairobi, Kenya, and Selin plans to attend the fourth in June in Uruguay. She will also be bringing six graduate students, as part of a National Science Foundation grant, to the final negotiating session set to take place in early 2013.

SOURCE: EPA

In an earlier interview with MIT News, Selin said domestic politics would likely continue to be a challenge for U.S. implementation of environmental regulations and international cooperation on mercury. But with these standards — now the most stringent mercury standards of its kind in the world — she says the country has proven their leadership.

“These standards show that the U.S. is taking leadership at home to address a widespread and substantial global problem.”

By: Leda Zimmerman, MIT Energy Initiative

As Assistant Professor of Engineering Systems at MIT, Jessika Trancik focuses her research on the evolution of technologies and on decomposing performance trajectories of energy systems. She is particularly interested in understanding the dynamics and limits of costs and carbon intensities of energy technologies, in order to inform climate change mitigation efforts. Photo: Justin Knight

In the fall of 2010, Leah Stokes walked into Energy Systems and Climate Change Mitigation (ESD.124) on the first day the graduate seminar was offered. “The class seemed perfect for me,” says the PhD student in environmental policy and planning in the Department of Urban Studies and Planning, “so I had to take it. I ended up loving it.” While no novice to the complex questions involved in transforming a carbon-centric world, Stokes, a 2010-2011 Siemens Energy Fellow, credits ESD.124 instructor Jessika Trancik, assistant professor of engineering systems, with “getting me thinking in a different way.”

Stokes and other students describe an ambitious class that encompasses the multidimensional challenges entailed in tackling climate change. “Professor Trancik frames the problem in terms of multiple impacts,” says first-year graduate student Morgan Edwards. “She shows how we can make choices in different areas to reduce emissions … She puts it all together as one picture.”

Trancik acknowledges this “distinctive feature” of ESD.124: “I combine a focus on technologies with a broader quantitative picture,” she says, which means “working across scales and at different levels of abstraction.” By semester’s end, Trancik says, students acquire “a comprehensive, integrated framework for comparing different energy supply technologies to one another, and the capacity to compare these energy technologies to climate change mitigation goals.”

Quantitative and analytical tools are central to ESD.124. Through lectures and problem sets, students learn statistical methods and models as they study such topics as carbon intensity, water scarcity, and the change in performance of technologies over time. Trancik situates these subjects in the context of larger questions: How energy systems now, and in the future, may contribute to climate change; and which technologies might best meet actual greenhouse gas targets. Trancik is also intent on giving students insight into research methodology, so she asks them to pore over journal articles with a critical eye, and present their findings to classroom peers.

“I’m a big proponent not just of reading articles but of understanding how researchers find their results, and questioning those results," Trancik says.

In their final projects, students deploy newly sharpened analytical and quantitative skills in original research. With Trancik’s assistance, students devise “discrete research questions” and select appropriate methods for seeking answers. Edwards focused on the lifetimes of bio-based jet fuel emissions versus those produced by conventional jet fuels, and explored how “the timing and composition of emissions is important in terms of meeting climate goals.” Stokes analyzed the carbon budget for a planet where temperatures are limited to an increase of 2° Celsius. “I had to determine the mix of energy systems to make that target,” Stokes says. With Trancik’s guidance, Stokes showed “step by step what was required to decarbonize the energy system,” and how to “grapple with uncertainty in forecasting” over a timescale of 60-plus years. Trancik says her students don’t “want solutions handed to them,” and sometimes produce work that leads to publishable articles. Other ESD.124 projects deepen into continued research (Edwards now works in Trancik’s lab).

Trancik, with her heterogeneous background in materials science, energy modeling, complex systems, and U.N. sustainable development practice, brings something unique to the classroom, say students. “Her approach ties technological understanding of innovation and systems to policy understanding of the scale of the problem,” Stokes says. “She is ultimately an engineer but quite adept in communicating to a policy audience. She empowers other people to bring what they know to the table, and can draw out their best qualities.” From Edwards’s perspective, Trancik “really motivates students to see where we are now, and what needs to be done to change the climate’s trajectory — that it is an ambitious and difficult thing we’re setting out on, but definitely possible.”

Trancik says that while she teaches “standard tools and concepts,” she also tries to “help students see new connections.” She looks forward to extending this approach to her new spring course, Mapping and Evaluating New Energy Technologies (ESD.125). Teaching at MIT, she says, is both “uplifting and a great privilege,” because of “students who can pose very challenging questions and who have the ability — and want — to solve difficult problems. I’m thankful for that every day.”