King Coal’s Throne Under Threat? U.S. Natural Gas Generation Rivaled Coal In April

Historically supplying the majority of America’s electricity, the coal industry has long been called “King Coal.” But this king’s throne is now under threat.

For the first time in U.S. history, natural gas electricity generation equaled coal generation, according to preliminary April figures from the Energy Information Administration:

EIA provides more context to the preliminary data (which is subject to change):

Recently published electric power data show that, for the first time since EIA began collecting the data, generation from natural gas-fired plants is virtually equal to generation from coal-fired plants, with each fuel providing 32% of total generation. In April 2012, preliminary data show net electric generation from natural gas was 95.9 million megawatthours, only slightly below generation from coal, at 96.0 million megawatthours.

As shown in the chart above, there are strong seasonal trends in the overall demand for electric power. In April 2012, demand was low due to the mild spring weather. Also in April, natural gas prices as delivered to power plants were at a ten-year low. With warmer summer weather and increased electric demand for air conditioning, demand will increase, requiring increased output from both coal- and natural gas-fired generators.

As the agency points out, there are a variety of factors that contribute to the changes in generation such as seasonal variability, changes in prices, age of infrastructure, and rising or falling inventories. But looking at the chart above, we can see a clear longer-term trend: use of coal is declining steadily and natural gas is filling in the gap.

In fact, recent data from the EIA showed that generation from coal dropped 19 percent between the first quarter of 2011 and first quarter of 2012 — moving from 44.6 percent to 36 percent. If this preliminary data is correct, that means that coal generation fell another 4 percent between March and April of this year.

This is a mixed blessing from an emissions perspective. The fall in coal generation means we’ll likely see a decline in CO2 emissions from the fossil fuel sector by 3 percent this year, according to EIA. That will add to the 1.9 percent drop seen in 2011.

However, a large-scale switch to gas is no environmental panacea. Along with local air and water-quality concerns from natural gas fracking, scientists and environmental regulators are increasingly warning about lifeycle methane emissions from gas. Methane is a greenhouse gas 25 times more potent than carbon dioxide over a 100-year period. While there is still no definitive study on the methane intensity of natural gas, recent research suggests that leakages in the drilling and transport of gas could make it more harmful than coal.

Reacting to the concerns about methane leakages, a group of investors worth $20 trillion in assets recently penned a letter to the oil and gas industry calling on companies to proactively address the problem. Craig McKenzie, Head of Sustainability for the Scottish Widows Investment Partnership, told Climate Progress that his organization believes natural gas does play a role in the current energy transition — but not without controls on methane:

“Many climate hawks are skeptical that the shale gas revolution has any role to play in tackling climate change. We disagree – there’s a narrow window of a decade or two where it could help significantly. It may just be the fastest way to eliminate coal from the power sector in the US, and may be China. This isn’t just theoretical. US coal power generation has fallen a massive 20% in one year largely, due to switching to cheap shale gas. But, as we’ve argued, even this defense of gas falls apart if the industry doesn’t eliminate fugitive methane emissions, which cancel out the climate benefit of a coal-gas switch for the first few decades. This major new investor initiative calling for best practice methane control technology and better regulation – globally – is intended to help make shale gas serve its climate purpose.”

Scottish Widows Investment Partnership, a major investor in fossil fuel projects, recently released a report concluding that that fugitive methane emissions from natural gas wipe out any climate benefits from a shift away from coal. The International Energy Agency has also warned that a massive global switch to natural gas could result in more than 6 degree F warming — resulting in out-of-control desertification, water shortages, and continued sea level rise.

Clearly, natural gas is playing a central role as the U.S. transitions away from its dirtiest resource, coal. And that’s a good thing for carbon emissions in the short term. The question is, will unchecked growth and improper proper pollution controls negate any positive impact that natural gas may offer?

5 Responses to King Coal’s Throne Under Threat? U.S. Natural Gas Generation Rivaled Coal In April

  1. “But, as we’ve argued, even this defense of gas falls apart if the industry doesn’t eliminate fugitive methane emissions”

    The LAST thing in the world you’d want if we were all sitting down building an economic model, is a model which not only allows for, but encourages players to externalize costs.

    Not only encourages but strongly presses the ‘players’ – artificial legal creations called corporations – to always, constantly, try to externalize costs and maximize profits – yet that is the economic system we have.

    As a result all the “yes, but”s you can give only amount to that, yes, we might be able to, for a while, get these ‘players’ to swim against the strong current by constantly working to push corporations to not extenralize costs.

    Do you really want to bet the future of Humanity on our ability as citizen activists to do a better job of that, than the thousands of lobbyists and multi-billion dollar power and incentive and loophole creating and “regulator capturing” (etc, etc) abilities of these artificial legal creations to use their corporate power to modify the law, or evade, …?

    From a purely logical point of view (i.e. even if we didn’t have empirical evidence in the form of past behavior) it’s suicically stupid to bet the future of humanity our ability to do this while keeping in place an economic model that has built-in extremely powerful incentives legal mandates for corporations to find some way to make profit (and then make more than that much, and then make even more, forever increasing as they must forever increase it) while externalizing costs onto society.

    But it’s not purely theoreical or an exercise in logical thinking; we have decades of experience.

    (generally, even maximizing profits isn’t good enough; rather, maximizing short term profits – even if the actions today mean the company goes bankrupt and humanityh suffers massive calamity, in 10 or 20 years)

    For all these reasons, while we will be called ‘naively idealistic’ because it’s a very hard long struggle, a growing number of us will work to change the economic system from the ground up (see our link)

    With so many efforts to make a perversely designed system ‘work’ and risking calamity while crossing fingers, History may well judge differently which efforts were “naive”

  2. Yeah. As far as I’m concerned, “industry” can just go ahead and “eliminate fugitive methane emissions” anytime they like. Don’t hold back on my account!

    Once that’s done and proven, maybe then there will be some point to talking about expanding gas. Maybe.

    Now? None.

  3. wili says:

    I would have hoped that the graph line for “other renewables” would be on a steeper upward slope.

    Of course, the slope that really has to fall is total use. Do we have stats for that? Once total use falls to a fifth or a tenth of current use, supplying what’s left with renewables becomes much more doable.

    Really, we have to rapidly get away from all ff burning, but if we are going to continue with one, using NG for electricity makes some sense, since iirc NG plants can be shut off and on more easily than coal plants can, making them a better fit for the intermittency of most renewables.

  4. Byron Smith says:

    Global figures are the reverse. Coal is about to overtake oil for the first time in decades. See here:

  5. Frank Zaski says:

    Two more downers for coal – declining production and low prices:
    Per the EIA, coal production for the week ended June 30, 2012 was 8% lower than the previous week and the comparable week in 2011.

    The spot price of PRB coal remains low at $8.50/ton while the cost to mine PRB coal is roughly $9.12 per ton. Coal prices from other regions also remain relatively low.

    On the other hand:
    This hot weather may be causing utilities to reconsider their generating capacity needs. Note, Duke Energy responded to the heat wave by firing up all four coal boilers at an old steam station in North Carolina.