Decarbonized Natural Gas Supply Chain with Low-Carbon Gaseous Fuels: A Life Cycle Environmental and Economic Assessment

Continuous growth in the economy has caused an increasing demand for energy resulting in numerous environmental concerns. Despite the popularity gained by renewable energy, certain economic activities still require fossil fuels. Among existing fossil fuels, natural gas (NG) plays a critical role in ensuring Canada's energy security. However, the Canadian oil and gas sector is a major contributor to national greenhouse gas emissions. Therefore, rigorous actions are required within the NG industry to ensure sustainability in its operations. Hydrogen and renewable natural gas (RNG) are identified as low-carbon gaseous fuels capable of decarbonizing the NG supply chain. RNG has already been used in the market, whereas hydrogen is gaining increased attention from utilities due to its ability to produce in higher capacities than RNG. Moreover, hydrogen blending into NG systems is piloted worldwide as an effort to reduce emissions from building heating and other carbon-intensive applications in the energy sector. However, the feasibility of different NG supply chain configurations coupled with low-carbon gaseous fuels is still under question due to multiple economic and environmental factors. Therefore, this study attempts to conduct a cradle-to-grave life cycle environmental and economic assessment of different NG supply chain configurations coupled with hydrogen and RNG. A life cycle thinking-based methodological framework is proposed to evaluate and compare the different supply chain configurations. The framework is presented with a case study for BC's natural gas sector with six supply chain configurations for the Canadian NG industry. The life cycle environmental and economic performance of the six configurations were evaluated using life cycle assessment and life cycle costing. The performance was integrated using the eco-efficiency analysis tool. According to the study results, replacing RNG with NG is shown to be the most desirable option. However, hydrogen blending with natural gas is still of high cost. Furthermore, the costs and environmental impacts of hydrogen production vary with its production method. Hydrogen production with electrolysis has lower impacts compared to hydrogen production with steam methane reforming (SMR). The findings from this study are geared toward enabling decision-makers and investors to gain a more holistic view of investment decisions related to green energy initiatives in the NG sector.