NYC Clean Heat Amounts to Capital Destruction

Recently I demonstrated on this blog why NYC Clean Heat is regressive with respect to Clean Air compliance, because it diverted buildings to natural gas, that would have been perfectly suited for renewable energy deployments. The typical buildings that were (and in some cases still are) burning #6 oil, are ideal candidates for renewable energy conversions. In many cases that would have produced financially and economically superior outcomes for building owners, and certainly for the city in terms of Clean Air, and for tenants in terms of quality of life. Green House Gas Emissions could be reduced far more than is now the case, and NYC Clean Heat was an unqualified victory for the carbon energy industry. Next time we should get our fossil fuels facts, before we argue any fossil fuels pros and cons.

There are several other aspects to the matter, which make the picture even far worse. There is no argument that natural gas burns cleaner than #6 or #4 oil (and even than #2 oil), and produces less CO2 and fewer particulates. However, the reality is that the distribution losses of methane are 30+%, and the uncontrolled release of methane into the air from fracking ("unconventional gas"), add even more environmental burden, since methane is a far worse Green House Gas than CO2. Increasingly, our natural gas is "unconventional gas." Fossil fuels are the problem, and "cleaner fuels" are mostly simply an obfuscation.

Greenwashing Fossil Fuel

As has been pointed out in many ways on this blog, the greenwashing by the power industry is the single biggest PR stunt to halt the conversion to renewable energy. The argument is not over types of fossil fuels. it is a matter of renewable alternatives. With the evidence cited here, and more, it is clear that dubious claims were used to promote natural gas as a clean fuel, and a "bridge fuel," it is mostly a diversionary tactic, and it is absolutely imperative that we transition to renewable energy wherever it is economically feasible. Switching to different forms of fossil fuels is window dressing, not progress.

There are many more opportunities in the city's aging building infrastructure than are now being exploited (see my DaBx PlaNYC2020), because government programs are steering owners away from them. In a more general sense, it is also clear that the obfuscation that results from promoting energy efficiency in fossil fuel based systems makes them more competitive, and fuels the demand, crowding out investment in renewable energy. So energy efficiency of fossil fuel systems is not part of any green agenda, except simply if it is the only thing you can do and arguably better than the alternative.

Methane leaks and more from Fracking

How big is the problem of natural gas (methane) leaks from fracking? As usual the answers depend on who you ask. The article cited here is probably conservative and reports an extreme finding of 14% of production (output) in losses from fracking. And that is only the current leaks, during extraction. What no one knows is how much seeps out in the years following production. As the article notes, it will take a long time before we have an accurate fix on this issue, but it definitely takes away some of the charm of natural gas. The more alarmist view of methane losses from fracking can be found in many places, if you want to arrive at a balanced view. The fossil fuel industry talks of 2% or less, and more independent opinions are as high as 10% of all gas produced.

The only encouraging information is that while methane is anywhere from sixty to one hundred times more destructive than CO2, it dissipates in the atmosphere within 20 years, while CO2 builds up forever. Be that as it may, renewable energy would reduce our green house emissions faster than the natural gas bonanza, and the element of leakage takes away some of the charm of natural gas.

The environmental degradation from fracking may well be equivalent or worse than the toxic sludge from the scrubbers of coal-fired power plants. The jury is still out on this part of the story.

Green House Gas Emissions from Distribution

The distribution loss of Methane (Natural Gas), as you can see in this article, 5%-10% leakage from distribution may be the range in the UK, and according to the calculations cited there, anything over 2.8% leakage may be enough to offset the "clean" advantages of natural gas over coal, which is the dirtiest fuel. In the US losses may be lower. EPA estimates that the losses of natural gas are distributed as follows: 37% from transmission/storage, 24% from distribution, and 27% from production. Overall EPA estimates that globally the losses of methane from leakage are 3.2%, which would largely wipe out the advantages over coal or oil.

Green House Gas Emissions from Burning Natural Gas

Here is where Natural Gas has it over coal and oil, producing far fewer problems, starting with less CO2, but also fewer particulate emissions, as well as various other toxic exhausts, including mercury. This is what allows New York City to claim that a switch from #6 and #4 oil to natural gas would produce reductions in Green House Gas emissions. Evidently NYC is the point of consumption, and the fact that gas is cleaner burning seems to carry the day. However, it should be obvious from even this brief overview, that this may appear to be true locally, it is not true on a complete system-wide view of the matter. Hence the drive to gas conversions is little more than window dressing, particularly in light of the alternatives that are not being pursued.

Government Sponsored Capital Destruction

In short, the drive to convert from oil to gas is largely futile, and to the extent that it is forcing building owners to prematurely change boilers, it amounts to government sponsored capital destruction.

Most importantly, the opportunities discussed on this site, for green energy generation in buildings, which would permanently improve building values, and make huge contributions to Clean Air, are basically being disregarded as a result of the dubious environmental benefits of natural gas, and passing up that financial opportunity alone is yet another form of capital destruction, because with while fossil fuel is an ongoing operating expense, truly renewable, green energy moves energy from liabilities to assets, and permanently improves building values.

Conclusion

In short, NYC is missing the boat by rushing into a pseudo solution that merely shuffles the deck chairs on the Titanic of the fossil fuel economy, that has precious little real environmental benefit to offer in terms of reducing Green House Gas Emissions, except for some very short-term window dressing and greenwashing of the fossil fuel economy, while it passes up the long-term economic potential of substantially reducing Green House Gas emissions, greater building resiliency, and improved economic competitiveness that would result from a greater emphasis on switching to renewable energy within the city. Given the alternatives, the campaign amounts to government sponsored capital destruction.

NYC Clean Heat is regressive with respect to Clean Air Compliance

The NYC Clean Heat program is in effect strongly regressive, for at a time when it is completely viable for multifamily buildings to switch to green energy, the net effect of the way the present NYC Clean Heat program works is with NYC boiler conversions, and shifting buildings from oil to natural gas en mass. Evidently, natural gas burns cleaner than #6 or #4 oil, but nonetheless a more substantive shift to renewable energy is long since feasible, and moreover is economically more attractive for building owners, tenants and the city. NYC Clean Heat should put more emphasis on the shift to renewables. Most importantly, the shift to renewable energy would have far greater impact on the city's Clean Air profile, than practically forcing these buildings to commit to another 30 years of fossil fuel burning, even if the emissions per se are lower. In short, the net result is that this program in the way it is being practiced is strongly regressive from the point of view of achieving the vaunted improvements in Clean Air Act compliance.

The NYC Clean Heat Cookie Cutter Approach

By and large the program now is focused on prolonging the fossil fuel era as long as possible, because it focuses entirely on the adoption of clean fuels, and happily continuing to burn things, which will be for the most part natural gas and in a few cases either #2 oil or even biodiesel. In short, its impact on actually meeting Clean Air Act standards, will be absolutely minimal, and when one considers that it is possible to switch to far more renewable energy today, it is in effect strongly regressive. To be specific, we assume the reference building has an old-fashioned steam boiler, with hot water from a coil in the boiler. Further, natural gas does not have any particulate emissions, and between greater efficiency of a modern boiler and cleaner burning gas, we can expect perhaps a 50% reduction in CO2 emissions:

1. Building burns #6 oil and the base line CO2 emissions are 100, and particulates 100.
2. Building switches to Natural gas, CO2 goes to 50 and particulates to 0.
3. Over thirty years that means cumulative CO2 emissions of 30x50= 1500.

This path adds up to passing off the difference between the Titanic sinking in 10 minutes instead of 5 as an "investment" opportunity. If this option is anything, it is not an investment, but an operational expenditure. The problem gets compounded even further if businesses take on long-term debt for a short-term fix of this sort.

Clean Air and sustainability from renewables

Now the alternative, as proposed in DaBx PlaNYC2020:

1. Replace Domestic Hot Water (DHW) with a renewable solution, which eliminates 30-50% of fuel consumption (these are proven stats, DHW is year-round, heat only half the year) this reduces emissions by 30-50%, so both CO2 and particulates go to 50-70% of former number, I will use 50% for the example here. The choices are geothermal or solar thermal.
2. The economic life of the boiler is now extended, since the boiler gets a summer vacation from now on.
3. When boiler replacement becomes economically necessary, which we'll estimate is in 10 years, replace with either a solar thermal HVAC solution or individual heat pumps, (driven by solar PV or wind energy) or in the worst case a new natural gas boiler. Combine with better insulation, new windows as needed.
4. Results over 30 years now are: years 1-10: CO2 50, particulates 50, and years 10-30 CO2 0, particulates 0. Total CO2 10x50+20x0= 500, particulates 500, and particulate emissions would be limited to the winters, when smog is less of a problem.

Note: These numbers are obviously only schematic, and there are a lot of nuances there which we ignore for the sake of this example, such as the fact that gas may be cleaner burning, but the transportation losses also figure into the emissions, to say nothing of the fracking debate.

Sustainability is the only way to clean air

Sustainability is not just an idle thought, it is also economically very powerful. Properly analyzed, business sustainability follows directly from making the right decisions in this transition. Building preservation is enhanced by switching to renewables. Most importantly, since the sustainable technologies of sun, wind, water, geothermal all eliminate the need of burning things, except in some very limited backup functions, such installations are all enhancements to the asset value of the building.

Energy efficiency is of fossil fuel is mere life extension

Evidently, if no economical entry point can be found for a building to convert to renewable energy, and achieve sustainability, and a measure of independence from the grid, then efficiency measures for the existing plant are the only option. In the vast majority of buildings there are serious steps that can be taken towards sustainability. Whenever a building has any renewable option--free energy, after all--it should take it.

Nowhere on this site do we argue against energy efficiency, we merely point out it should never be the first objective. The first objective should be do we make or buy our energy, and if instead of energy efficiency, we take reducing emissions and achieving Clean Air standards as an objective, the building is then free to pursue that objective with whatever means is the most economically attractive, and that is how it should be. The 90by50 report from the Urban Green Council pointed out the top line feasibility of massive change, but meanwhile we are missing a huge opportunity for shifting to sustainability, and make significant progress towards Clean Air in 2013, 14, 15.

Conclusion

NYC Clean Heat is shifting buildings from #6 and #4 oil towards Natural Gas at the expense of Clean Air, and long-term sustainability of buildings, which goes against an interest in building preservation.