Natural Gas and Market-Driven Emissions Progress

Mark Green
Posted March 4, 2016

Just recently saw this article on National Geographic.com, suggesting the United States made a significant shift in its energy economy in 2015:

Consider what happened last year alone. The amount of electricity from coal-fired power plants hit a record low while that from natural gas generators hit a record high. Also, renewable energy added the most new power to the electric grid, and annual carbon emissions reached a 20-year low.

First, a reminder that new power capacity added to the grid doesn’t translate directly to new power. Below, U.S. Energy Information Administration (EIA) data shows that in terms of electricity generation change (from 2014 to 2015) at utility-scale facilities and including distributed solar, natural gas led in net generation:

That’s not knocking renewables, just an illustration of today’s energy reality and a reminder of the oft-overlooked energy, economic and climate benefits accruing to the United States from increasing natural gas use. We’ve called it the “U.S. Model,” one where America has increased domestic energy production and boosted its economy while lowering emissions – a potential template for the rest of the world.

Back to National Geographic. It’s great that the magazine is noticing America’s emissions progress. Yet, NatGeo’s dazzling photo of a stand of windmills in Texas suggested the magazine’s main focus might be on renewable energy. Reading on:

Coal-fired power plants, which have seen a record number of closures, are producing much less electricity. Last year, through November – the most recent month for which government data are available – they generated 33.6% of U.S. electricity, down from 39 percent for all of 2014 and 50 percent in 2005. In contrast, cheap natural gas is surging. Last year, through November, its generators produced 32.5 percent of U.S. electricity and could actually overtake coal when December figures are published later this month by the Energy Information Administration.

Looks good, but then this paragraph …

As a result of the growth in both natural gas and renewables, the U.S. power sector recorded the lowest yearly carbon emissions – down 4.3 percent from 2014 – since 1995. In fact, these emissions are now 17.8% below 2005 levels, the benchmark against which the Environmental Protection Agency’s Clean Power Plan set a goal of a 32% emissions cut by 2030.

… had me thinking of … baseball’s Aaron brothers, Henry and Tommie. The two Aarons hit more home runs than any other brother tandem in the Major Leagues (768 to be exact) – the punch line being that Hank smacked 755 of those homers while brother Tommie hit just 13.

Why the Aaron brothers? To emphasize the point that while there’s credit to go around for reduced U.S. emissions, EIA tells us that 61.4 percent of carbon dioxide emissions reductions in the electric power sector from 2006 through 2014 came from fuel shifting toward natural gas:

So, while the comparison of natural gas and renewables in CO2 reduction isn’t quite as dramatic as the comparison of Hank and Tommie Aaron’s respective home-run totals, the growth in natural gas use is the unmistakable leading factor in U.S. emissions reductions over the past few years. It’s the key reason the United States is leading the world’s largest economies in lowering emissions:

Meanwhile, natural gas also is responsible for providing more energy than all renewables combined. This chart from EIA data shows the change in annual U.S. energy consumption by fuel source over the past decade, as measured in quadrillion Btu:

Natural gas is winning in the marketplace – even as the cleaner-burning fuel drives reductions in U.S. emissions. An EIA study on electrical generation (using averages for data points) showed that natural gas is high capacity …

… with low capital costs (2013 $/MWh):

And low total costs (2013 $/MWh):

Ultimately, energy policy that’s market-driven and consumer focused – as the rise in natural gas use surely reflects – is better than government-driven, command-and-control policies that pay more attention to ideological agendas than what’s best for the economy and consumers.

The good news, again, is that U.S. economic growth and benefits to American consumers are being spurred by a domestic energy revolution that’s also playing a major role in reducing emissions. We’re glad also for the contributions of renewable energies, but policymakers should stay focused on strategies and initiatives that sustain and add to the progress that’s been made thanks to abundant U.S. natural gas.