Energy Tomorrow Blog
Posted August 20, 2020
Natural gas as the essential partner for renewables such as wind and solar is something we’ve talked about a lot (see here, here and here). Californians have been schooled on this point recently, with millions suffering under rolling blackouts during soaring temperatures because electrical utilities couldn’t keep pace with skyrocketing demand.
The state’s renewables mandate has played a role in their misery. By requiring that 60% of California’s electricity must come from renewables by 2030 and through green energy subsidies, the state has seen the competitive balance tilt away from other, more flexible power sources, including cleaner natural gas.
Posted July 31, 2020
Former Vice President Joe Biden's camp says he wouldn’t completely ban hydraulic fracturing (see the New York Times and here) – the technology most responsible for a domestic energy revolution that has made the U.S. the world’s leading producer of natural gas and oil. While Biden’s proposal to end new federal fracking leases is misguided, the fact he wouldn’t try to ban it elsewhere may suggest a recognition that fracking is critically important to the U.S. economy and national security.
This could indicate some important common ground, which API President and CEO Mike Sommers addressed in the Times article.This is especially welcome news for the nation’s electricity grid operators. They’re on the front lines of the twin effort to provide affordable energy to American homes and businesses, while lowering carbon dioxide emissions from power generation. For them, clean and reliable natural gas is the cornerstone for succeeding on both fronts, which is why natural gas is the nation’s No. 1 fuel for power generation.
Posted July 21, 2020
Through the recent COVID-19 pandemic and resulting shocks to energy markets around the world, U.S. natural gas has remained a relatively bright spot.
Record low prices have benefitted consumers, and at the same time many producers dedicated to natural gas in Pennsylvania, Ohio, West Virginia, Louisiana and East Texas have remained viable as cutbacks in oil and associated natural gas from other regions have taken effect. And now about 90% of U.S. drilling for natural gas is concentrated in these regions, that is Appalachia and the Haynesville areas.
The drilling activity has reflected two fundamental observations. The first is that, according to BTU Analytics, the recent breakeven price – that is, the Henry Hub wholesale market price needed to at least break even in drilling a new well – on average has remained near market prices despite COVID-19, a relatively warm winter and broad financial market concerns. The second observation is that natural gas well productivity, as reported by the U.S. Energy Information Administration, were resilient after some unexplained variation at the beginning of the year.
Posted May 19, 2020
Natural gas’ economic competitiveness continues, even amid the highly unexpected market conditions associated with the coronavirus pandemic – outcompeting coal, the No. 2 fuel for power generation.
While consumer electricity use patterns are changing as power demand throughout the country has declined during the coronavirus crisis, natural gas is playing a growing role in meeting that demand.
This shift towards greater reliance on natural gas – along with a corresponding decline in coal-fired generation – has been a key feature of the U.S. power sector for most of the past decade, and the current environment appears to be accelerating this trend. In fact, the coal-to-gas transition is starker during this historic season as lower electricity demand, coupled with low natural gas prices, is providing added incentive for power suppliers.
Posted February 28, 2020
Some welcome news from the International Energy Agency (IEA) this month on global carbon dioxide emissions. IEA’s report finds that global energy-related carbon dioxide emissions flattened in 2019 – even as the world economy expanded by 2.9% – in large part due to the increased use of natural gas. And closer to home, the news gets even better. The U.S. recorded the largest emissions decline of any country, down 140 million tons (Mt) from the previous year.
Posted January 15, 2020
Over the past decade, coal-to-natural gas switching in power generation has driven domestic emissions reductions, positioning America at the leading edge of climate and air quality progress. And last year, U.S. greenhouse gas emissions fell by 2.1% – almost entirely due to a decline in coal consumption, according to new analysis from the Rhodium Group.
The increase of cleaner-burning natural gas in electricity production accounts for much of this positive development, as natural gas emits about half the carbon compared to coal combustion. In 2019, coal-fired power generation fell by an estimated 18%, the largest year-on-year decline on record, and related emissions dropped by 190 million metric tons – equivalent to the amount of carbon sequestered by nearly 250 million acres of U.S. forests in one year.
John D. Siciliano
Posted November 26, 2019
The transition to cleaner natural gas-fueled electricity generation is creating new momentum for building out the nation’s energy infrastructure – specifically, new pipeline capacity needed to accelerate the changeover from coal and other older resources.
Not doing so has proven to be detrimental to consumers and clean energy goals alike.
Posted November 21, 2019
Some important data points from the U.S. Energy Information Administration (EIA) on the country’s emissions of carbon dioxide, a critically important greenhouse gas and a key to U.S. progress on climate goals:
First, as we noted in this recent post, EIA projects U.S. energy-related CO2 emissions this year will go down from the previous year. Broader context: Our nation’s CO2 emissions haven’t been this low since 1987. Second, EIA says the overall carbon intensity of the U.S. economy – the amount of carbon dioxide that is emitted per unit of energy consumed – declined in 2018.
This is especially important in electricity generation, a major source of emissions. EIA says that switching fuels for generation, from coal to natural gas, has played an important role in reducing U.S. carbon intensity.
Posted September 25, 2019
Energy is essential to a modern standard of living, and as the leading energy sources, natural gas and oil are foundational to almost everything we do – lighting our homes, heating our hospitals and powering our workplaces.
The U.S. is the world’s leading natural gas and oil producer, which is critically important given new projections that global energy consumption will increase nearly 50% by 2050. Though reliable access to energy often is taken for granted in this country, people in other parts of the world struggle to obtain the energy needed for sustainable development and to empower basic human progress.
According to the International Energy Agency (IEA), nearly one in eight people around the world lives without electricity, and 2.7 billion people currently are without access to clean cooking facilities. Without power for heating, lighting and advanced technologies, human potential is severely limited. And in the absence of cleaner fuels, people must use coal, kerosene, biomass and other energy sources to prepare food, which contributes to harmful and unnecessary indoor air pollution.
Posted September 9, 2019
One of the things I do often on behalf of API is to speak publicly across the United States, emphasizing how the energy revolution has continued to benefit consumers. On the topic of natural gas and electricity generation, a common thread has emerged: Natural gas has generally led to lower energy-related carbon dioxide emissions and lower electricity prices across the nation.
To those who follow the industry, this may be no surprise given that clean natural gas has supplanted coal as the leading energy source for generating electricity in the U.S. Part of this is natural gas’ competitiveness in the marketplace. Thanks in part to the shale revolution, real natural gas prices at Henry Hub decreased 37% between 2010 and 2018 – and as of August 2019 were down by another 15.6% y/y.