Another Day, Another Positive For Natural Gas

Mark Green
Posted March 16, 2016

The U.S. Energy Information Administration (EIA) forecasts that natural gas will be the United States’ No. 1 fuel source for electricity generation this year, supplying 33 percent of the energy needed for power generation. EIA’s chart:

EIA:

For decades, coal has been the dominant energy source for generating electricity in the United States. EIA's Short-Term Energy Outlook (STEO) is now forecasting that 2016 will be the first year that natural gas-fired generation exceeds coal generation in the United States on an annual basis. … The recent decline in the generation share of coal, and the concurrent rise in the share of natural gas, was mainly a market-driven response to lower natural gas prices that have made natural gas generation more economically attractive.

Two important points: First, fuel switching in power generation is an example of the market working, with power providers choosing the best source for their individual situations, to get consumers the energy they need at a price they can afford. EIA data shows that in terms of electricity generation change at utility-scale facilities (from 2014 to 2015) and including distributed solar, natural gas led in net generation:

Second point: The rise in the use of domestic natural gas – developed from shale with safe hydraulic fracturing and advanced horizontal drilling – is the main reason the U.S. leads the world in carbon dioxide (CO2) emissions.

And the world is starting to notice. This week the International Energy Agency (IEA) issued a report that said global CO2 emissions have remained flat the past two years – while in the United States “emissions declined by 2%, as a large switch from coal to natural gas use in electricity generation took place.” Speaking about the worldwide trend, IEA Executive Director Fatih Birol said:

“The new figures confirm last year’s surprising but welcome news: we now have seen two straight years of greenhouse gas emissions decoupling from economic growth.”

No surprise here. The U.S. has shown that progress on greenhouse gas emissions from the energy sector can happen during a time of rising energy production and economic growth:

Again, it’s mostly because of natural gas. From 2006 through 2014, 61.4 percent of CO2 emissions in the U.S. electric power sector came from fuel shifting toward natural gas, according to EIA:

These trend lines strongly indicate that the U.S. experience can be a model for the rest of the world – a model of simultaneous economic growth, energy output and falling emissions. The good news is that while IEA – and many U.S. leaders – often obfuscate the reasons for our progress, progress is being made. And it was nice of the policy analysts at IEA to recognize the contribution of natural gas to American progress in addressing climate change. Let’s hope policy makers get the memo.