Leveling the playing field of transportation fuels: Accounting for indirect emissions of natural gas

Natural gas transportation fuels are credited in prior studies with greenhouse gas emissions savings relative to petroleum-based fuels and relative to the total emissions of biofuels. These analyses, however, overlook a source of potentially large indirect emissions from natural gas transportation fuels, namely the emissions from incremental coal-fired generation caused by price-induced substitutions away from natural-gas-fired electricity generation. Because coal-fired generation emits substantially more greenhouse gases and criteria air pollutants than natural-gas-fired generation, this indirect coal-use change effect diminishes potential emissions savings from natural gas transportation fuels. Estimates from a parameterized multi-market model suggest the indirect coal-use change effect rivals in magnitude the indirect land-use change effect of biofuels and renders natural gas fuels as carbon intensive as petroleum fuels.