Natural Gas: Lower Emissions, Cleaner Air and Benefiting Consumers

Mark Green
Posted October 7, 2016

We’ve posted a number of times in recent months on the lead role cleaner-burning natural gas is playing in reducing U.S. carbon emissions from electricity generation, allowing the U.S. to lead the world in those reductions. Indeed, increased domestic use of natural gas is the foundation of a market-based approach that has produced energy and economic growth and falling CO2 emissions – bucking the historic pattern of growth leading to higher emissions.

The market approach works. What’s more, the energy development underlying that approach is recording lower methane emissions. New data released by EPA shows that methane emissions from oil and natural gas production fell in 2015, marking the fourth straight year of declines and documenting industry efforts to reduce them. The agency’s table:

What we see here is that methane from oil and natural gas production, processing and storage was 70.3 million metric tons of CO2-equivalent last year, down from 73.1 million metric tons in 2014. The number of reporting facilities was about the same. The sector’s overall greenhouse gas emissions were 231.4 million metric tons of CO2-equivalent in 2015, down from 235.1 million metric tons in 2014.

This parallels a recent NOAA study of atmospheric methane measurements that found that “methane emissions from natural gas as a fraction of production have declined from approximately 8 per cent to approximately 2 per cent over the past three decades” – with production soaring in recent years.

The data points underscore what we in industry have been saying for some time, that natural gas as a fuel has marked climate and air quality advantages and benefits. API Upstream Director Erik Milito:

“The data clearly demonstrates that natural gas is a clean burning fuel that has helped the country drive down its greenhouse gas emissions. Increased use of natural gas for electricity generation continues to make the air we breathe cleaner for all Americans – since natural gas emits little to no sulfur dioxide, particulate matter and mercury and significantly less ozone precursors.”

There’s also this for consumers: The U.S. Energy Information Administration (EIA) reports that U.S. residential electricity prices are in decline for the first time in years, and abundant, affordable natural gas is a major factor. EIA’s chart:

EIA says that during the first six months of the year residential customers paid on average 12.4 cents per kilowatthour (kWh), which is 0.7 percent lower than the same period in 2015. If the trend continues over the rest of the year, EIA says, annual average residential prices would decline for the first time since 2002. The reason is lower fuel costs for power generation, which increasingly is being fueled by natural gas. EIA:

Residential customers in most areas of the country are seeing lower retail electricity prices this year compared with the same time last year. Declining costs of fuel, especially natural gas, have been a key driver of recent reductions in retail electricity prices.

We say all of the above to say this: Natural gas – in abundance thanks to America’s energy renaissance, propelled by advanced hydraulic fracturing and horizontal drilling – is allowing the U.S. to make significant climate progress and helping to improve air quality, without sacrificing energy or economic growth. It’s a role President Obama acknowledged this week:

“We’ve significantly reduced the amount of power generating from coal, and it’s going to continue to go down. … Interestingly enough, one of the reasons why we’ve seen significant reduction in coal usage in the United States is not because of our regulations, it’s been because natural gas got really cheap as a consequence of fracking.”

We also say this, that industry is reducing methane emissions – progress that could be threatened by adding new layers of regulation. And finally this: U.S. consumers are benefiting from lower energy costs associated with America’s natural gas abundance. Louis Finkel, API executive vice president:

“Due to advancements in hydraulic fracturing and horizontal drilling, the United States has become the No. 1 producer of oil and natural gas in the world, and the market has increasingly adopted natural gas for electricity generation. As a result, we are also the world leader in reducing carbon emissions, which are near 20-year lows. This is a win-win thanks in large part to American innovation and free markets.”