Natural gas leaks in the heat pump analysis

Natural gas leaks are a large and hard to quantify contributor to global warming. How do they affect the benefit-cost analysis of heat pump conversion? The answer is that they modestly inflate both the benefits and the costs of heat pump conversions.

Gas leaks occur at multiple stages. At every stage, true leak volume is uncertain and will vary geographically. The EPA estimates the by-stage breakdown of emissions as follows:

Some observations:

  • In this chart, gas emissions occur from both oil and gas production. In 2022, natural gas production was 44.7 “quads” (quadrillion BTU of energy) and oil was 24.7 quads – so, within broad uncertainty allowances, methane emissions from production per unit energy are similar for gas and oil (the 19%/41% ratio is not too different from 24.7/44.7 — .46 vs .55).
  • It makes sense to exclude emissions at the transmission and distribution stages from the heat pump analysis. “[N]atural gas pipelines will remain pressurized for other applications and will likely not be impacted by incremental reductions in generation and consumption.” See Pistochini et al. 2022 (a favorable analysis of heat pump conversions).
  • It seems an excessive refinement to make an allowance for behind the meter emissions in the analysis of Massachusetts heat pump retrofits because (a) as the chart above shows, all BTM emissions are likely a small share of the total; (b) some BTM emissions come from cooking and hot water heating as opposed to furnaces; (c) in most gas-to-heat pump conversions the gas heating system is not disconnected anyway — roughly half of gas conversions are “partial” conversions (see Mass Save Key Performance Indicator 3) and even for the “full displacement” conversions, a strong majority do not involve removal or disconnection of the gas furnace (informal communication from Mass Save administrators). Compare Pistochini et al. 2022 for a different approach.

Focusing on the production stage, there is cause to believe that production emissions vary significantly from gas field to gas field, perhaps from 0.9% to 3.6% within the United States. In Massachusetts, some of our natural gas is imported from other countries and we have no good basis for particularizing the associated production emissions. The same variation must apply to natural gas leaks associated with oil production and we have no basis for estimating the leaks associated with the particular oil we consume.

For rough analysis purposes, it makes sense to consider the implications of a range of leaks between 1 and 4% of gas used and to make a similar per-energy-produced allowance for oil.

Estimates of the global warming potential of methane depend on the time frame chosen, because methane does breakdown in the atmosphere. From a 100-year perspective, methane increases warming 27-30 times more than carbon dioxide. From a 25-year perspective, methane increases warming 81-83 times more than carbon dioxide.

However, from a harm perspective, global warming in the longer term has a greater impact — as stated at page 67 of the EPA’s recent analysis of the social cost of green house gases “Emissions further in the future produce larger incremental damages as physical and economic systems become more stressed in response to greater climatic change and because income is growing over time.” Since methane does break down over time, in the central case in EPA’s analysis, the social cost per ton of methane emissions ($1600) is only 8.4 times greater than the social cost per ton of CO2 emissions ($190). The social cost of methane ranges from 4.3 to 14.2 times the social cost of carbon across the 9 combinations of 3 discount rates and 3 damage models that the EPA considers. The social cost of carbon alone varies from $110 per ton to $650 across these permutations — so the relative social cost of methane varies less than the base estimate of the social cost of carbon ($650/$110 = 5.9; 14.2/4.3= 3.3).

In a heat pump conversion, we save greenhouse emissions by eliminating or reducing the use of an oil or gas furnace, but we add carbon emissions by increasing electricity generation. The add-on for production emissions of methane will appear on both sides of the benefit-cost ledger and will depend on (a) the assumed rate of production emissions of methane; (b) the estimated ratio of harm associated with emissions of methane to harm associated with carbon emissions. As the chart below suggests, a central guess would be approximately 21%.

Methane leak increment to social cost of carbon emissions from production

It is reasonable, if we need to choose a single number, to inflate the harms of emissions from oil or gas combustion by something like 20% to allow for production gas leaks. As a rough comparison, the Cambium-22 model adds roughly 10% to marginal emission rates to reflect pre-combustion emissions, depending, of course, on mix of generation sources.

The 20% adjustment to social costs appears on both sides of the ledger in the benefit-cost analysis of heat pump conversions. Posts to follow will integrate this adjustment into heat pump benefit-cost computations.

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Published by Will Brownsberger

Will Brownsberger is State Senator from the Second Suffolk and Middlesex District.

6 replies on “Natural gas leaks in the heat pump analysis”

  1. I’m not sure why you are leaving out leaks in the distribution system? Surely leaking methane from regional and local distribution systems has an impact. It should be fairly easy to determine as well, as an inventory of gas put into distribution systems as compared to gas billed to the end user should be fairly easy to calculate. In front of my own home there has been a gas leak for YEARS. I’ve reported it to the gas company (formerly Columbia, now Eversource) as well as the Fire Dept. They say it doesn’t meet the threshold of concern, yet I can smell the leak every time I’m near it in my yard. How many of these leaks are there in the state? Since the state is older I would bet thousands, with the corresponding impact. I’ve been incredulous that electricity generation is not carbon scored, and since gas is the #1 fuel for electrical generation it seems that this, as well as emissions, should be recognized.

  2. Yes. Absolutely, the distribution leaks have an impact and we want to reduce them.

    However, the leaks will continue as long as the pipes are in the ground and full of gas. Our current approach to heat pump conversions is geographically random and, in most cases, gas heat is not disconnected anyway. Our program does not allow the pruning of the gas delivery tree or accelerate the removal of any pipes. So the distribution leaks won’t change as a result of heat pump conversions and shouldn’t be part of the benefit-cost analysis.

    1. I respectfully disagree. If the State’s solution to climate change is to move everyone to heat pumps, which now, and for decades will depend on gas fired power plants (not to mention people will be unlikely to remove their gas equipment over reliability anxiety) then it follows that you have to take into consideration not only the gas combustion but the methane leaks as well. Proponents of heat pumps are selling them as a solution to climate change, but if the combustion and methane leaks continue, they are not quite so compelling. Just because it doesn’t fit into the “model” doesn’t mean it’s not there and leaving it’s impact. I can’t help but think the models are skewed to motivate adoption, rather than to simply give the facts.

  3. Well we will agree to disagree. If heat pumps weren’t being promoted as the sole domestic space heating solution to climate change I might not object as much. But, that’s the current standard and hiding the continued use of natgas for power production and ignoring the methane leaks, even if all of that is currently “on both sides of the ledger” is giving laypeople the idea that heatpumps are some kind of magical solution. As your experience tells us that’s not really the case. Thanks again for all your detailed info. Perhaps when my house is set up for net zero carbon footprint, with an entirely different setup, I’ll communicate the results. Climate change and energy challenges deserve better than a one source solution.

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