The People of America's Oil and Natural Gas Indusry

Abundant, Reliable Natural Gas Continues to Lead

Kate Wallace

Kate Wallace
Posted February 13, 2018

There are important reasons natural gas is the United States’ primary fuel for electricity generation – and will be in the years to come, according to the U.S. Energy Information Administration (EIA):

  • Natural gas is abundantly available – thanks to America’s energy renaissance.
  • Natural gas’ affordability has made it competitive in the marketplace.
  • Among all the fuels used for power generation, natural gas is the definition of reliability – uniquely positioned as a fuel to furnish key attributes that ensure the health of the modern electricity grid.

According to EIA, natural gas’ share of total electricity supplied will average 33 percent this year, up from 32 percent in 2017, and rise to 34 percent in 2019. EIA’s chart:

US electricity generation by source

EIA:

The mix of energy sources used for producing electricity generation continues to shift in response to changes in fuel costs and the development of renewable energy technologies. Since 2015, the cost of natural gas delivered to electric generators has generally averaged $3.50 per million British thermal units (Btu) or less, and it is expected to remain near this level through 2019. … EIA expects the cost of natural gas for electricity generation to remain relatively competitive with coal-fired electricity over the next two years.

In addition to availability and cost, natural gas is the leading fuel for electricity generation because it’s a great fuel for that purpose. A recent study found that in terms of specific attributes required by the grid – dispatchability, ramp rates, frequency response and others – natural gas has more of them than other fuels.

Surging domestic natural gas production has helped boost our economy, lowering costs for manufacturers who use it as a power source and as a feedstock, while also lowering energy costs for consumers. The average U.S. household saw its disposable income rise $1,337 in 2015 because of lower costs associated with natural gas from shale.

Natural gas benefits the environment, too. Primarily because of increased used of clean natural gas, carbon dioxide emissions from electricity generation have decreased 25 percent since 2005.

Natural gas and oil are America’s leading fuels today and will be tomorrow – brought to Americans by a forward-looking, technologically advanced industry. Energy is helping all of us power past impossible. API President and CEO Jack Gerard at last month’s State of American Energy event:

“Consider what was previously thought impossible. We’ve taken the nation from energy scarcity to energy abundance. From making products abroad to a rebirth of U.S. manufacturing. From energy as a major pocketbook issue to lower gasoline, diesel, electricity and home heating costs. And today we are increasing energy development as we’re contributing to lower greenhouse gas emissions – a reality many believed was implausible, if not impossible.”


*API communications intern Imara Bright-Johnson contributed to this post.

ABOUT THE AUTHOR

Kate Wallace is an associate of research and content development for the American Petroleum Institute. Before joining API she was a researcher and policy analyst at America’s Natural Gas Alliance, and worked on pollinator conservation programs and state wildlife conservation policies before entering the energy industry. Kate graduated from the University of Connecticut with a bachelor’s degree in Resource Economics, and earned her Master of Public Administration from George Mason University. She loves taking her dogs on hikes, travelling and navigating the northern Virginia/DC craft beer and wine scenes with her friends and family.