The Future of Natural Gas in a Low-Carbon Economy: One Developing Perspective

Moving vehicle fuels from gasoline to electricity causes tremendous anxiety in the oil industry; lots of gnashing of teeth and funding of political action committees. Moving buildings to electric space and water heat causes equally-concerning anxiety in the natural gas industry – especially for the regulated natural gas utilities who must respond to state policies and regulations, not just a changing market.

Northwest Natural Gas (NWN) is headquartered in Portland, Oregon and has service territory throughout Oregon and Washington. NWN appears to have decided that a low-carbon future is inevitable, and is trying to better articulate what it means to its business. NWN wants to find pathways forward that can provide a low-carbon future, and that also include space for a financially-stable gas distribution utility.

NWN hired respected climate and utility consultant Energy and Environmental Economics (E3) to conduct a study that includes four scenarios that could provide low-carbon space and water heating in the Northwest. That study, “Northwest Energy Pathways to 2050” covers a wide range of topics, but from a building decarbonization perspective, E3’s review of how to meet building space and water heating loads is particularly intriguing.

Two scenarios keep the gas service infrastructure in place, with gas fired space and water heating in homes and businesses. These scenarios include lower-carbon gas that incorporate renewable gas and hydrogen. One of these scenarios continues with existing best practice natural gas end use equipment, while the second scenario uses (not yet commercialized) gas heat pump technologies to create useful heat with greater efficiency.

The other two scenarios electrify the building space and water heating using either standard efficiency heat pumps or heat pumps developed for cold climates. The gas utility still uses lower-carbon gas, but now the gas generates the additional electricity needed to heat homes and businesses.

The E3 study covers a complex array of topics in its analysis, well beyond the point discussed here. Low-carbon gas options will require more analysis and development to be viable at the envisioned scale, but having diverse options is likely to be a good thing. No large business plans for its own demise, but those that understand the need for change and provide leadership tend to do better over the long term. The options laid out in the E3 analysis for NWN bring some additional weight to the need to more fully consider the role of low-carbon gas development in utility planning and also the importance of technology choices at the building level.

What are the building-level technical solutions?

The E3 study did note that one of the four scenarios studied was clearly less economic than the others, within the conditions studied. The loser? Standard efficiency heat pumps. If you are going to electrify space heating, you need to go to the most efficient electric options such as cold climate heat pumps. 

E3 modeled the performance of standard and cold climate air source heat pumps (ccASHPs) in a variety of outdoor temperatures. The graph below (from a Dec. 10, 2018 E3 presentation at NWN) shows that ccASHPs (blue dots) – as compared to standard ASHPs (red dots) – use significantly less energy to provide the required space heating as temperatures drop. Below 40 degrees, the performance advantage of ccASHPs becomes readily apparent. As temperatures drop closer to zero degrees, even ccASHPs begin to use electric resistance heating, which dramatically changes the amount of energy required.   

Any modeling study needs to simplify some variables just to complete and explain the modeling.   Of course more efficient buildings require less energy for space conditioning at all temperatures, and newly constructed buildings that meet tight energy codes will perform very well in even the coldest conditions. For existing buildings, the challenge is greater. Electrification may mean that energy storage or supplemental systems are needed, or that the grid needs to be ready to meet new winter peaks. Part of the solution is deeper efficiency in existing buildings and having the control systems in place to better match heating loads with electric system capabilities. For some buildings, ground source heat pumps  may be the best choice, and for others, water based heat pumps might be an option (such as for the nearly zero energy Exploratorium in San Francisco).

Another part of the solution could be community scale systems rather than individual building system, such as the False Creek system in Vancouver B.C. that uses waste heat from the city sewers to heat more than six million square feet of buildings. There is certainly more work to do to figure out the best combination of technical solutions to reduce carbon, and the solution technologies will continue to improve performance and reduce costs over time.

Technologies will continue to evolve as we scale the market to decarbonize buildings. But efficient buildings, efficient equipment, and better controls are parts of the recipe that don’t change.

NWN has developed a website that includes more information about the study and how the utility intends to move forward at

This blog is part of Building Decarb Central, a series of blogs and other resources aimed at providing a constant flow of information on building decarbonization. Be sure to check out our web portal for more stories, resources, and information.

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