Before this year, natural gas had never accounted for more electricity generation than coal in the U.S. That is no longer the case.
In April, 31 percent of electricity generation came from natural gas while 30 percent came from coal, according to data analyzed by the research firm SNL Energy and compiled by the U.S. Department of Energy. This one percent difference marks a long-anticipated role reversal for these two electricity generating fossil fuels, and another sign of the slow demise of coal as a primary power source in the U.S.
A recent analysis by Bloomberg New Energy Finance (BNEF) found that about 17 percent of U.S. coal-fired power production generation will cease to exist within the next few years, with Bloomberg Business stating that “the industrial age was built on coal. The next 25 years will be the end of its dominance.”
“The U.S. coal fleet is entering an unprecedented period of retirements,” the BNEF analysis states. “As the industry faces a three-pronged assault from low gas prices, an aging fleet, and stringent environmental compliance.”
Coal is dirty. It creates local air pollution, uses a lot of water and a lot of greenhouse gases. There are already regulations on arsenic, mercury, and lead pollution from coal-fired power plants, bur those regulations have recently been put in jeopardy by the Supreme Court. The Obama administration and the EPA are working on the first carbon pollution limits for existing power plants in the form of the Clean Power Plan, which aim to reduce power plant greenhouse gas emissions by 30 percent by 2030. The EPA is expected to release the final rule later this summer.
As for water use, a recent analysis by Climate Central found that water being withdrawn from lakes and rivers to cool power plants fell dramatically to 33 trillion gallons in 2012 from 52 trillion gallons in 2005. According to Climate Central, natural gas power plants use four times less water per megawatt-hour generated than coal-fired power plants on average.
Even without the specter of future regulations influencing coal’s role in energy production, the advance of hydraulic fracturing has made natural gas prices nearly a third of what they were a decade ago. The drilling boom has also made the United States the world’s biggest combined producer of oil and natural gas, and has boosted natural gas production by 30 percent since 2008.
In May, a report from the U.S. Energy Information Administration (EIA) stated that the “increase in natural gas-fired generation has largely come at the expense of coal generation.”
With heating and air conditioning minimized during the spring months, generation from coal- and natural gas-fired power plants falls due to low demand. As natural gas costs rise over the summer and coal plants return from springtime maintenance, the EIA still expects coal’s share of U.S. total generation this year to be around 35.6 percent, compared to 30.9 percent for natural gas. In 2014, coal’s share was 38.8 percent and natural gas was 27.4 percent.
Just five years ago, this difference was far more dramatic. According to SNL Energy, in April 2010, 44 percent of electric power generation came from coal and 22 percent from gas. Steve Piper, associate director of energy fundamentals at SNL Energy, told CNBC that “the transition from coal has been stunning.”
“There’s been a change both from a regulatory and economic perspective in terms of the competitiveness of natural gas,” he said. “It could be the beginning of the end for the current fleet of coal plants.”
Piper also said he thought it might be the beginning of another paradigm shift: The coal industry might actually starting looking at ways to reduce pollution and burn coal more efficiently. Not only is coal struggling in the U.S., but in China — where coal-fired power production has grown rapidly for years — the picture is also starting to change. Coal imports fell dramatically in June and the Chinese leadership has committed to peaking greenhouse gas emissions by 2030, with an aim of doing it sooner.
When it comes to mitigating climate change, natural gas is preferable to coal. But it is by no means an outright solution. Natural gas is made up of methane, a powerful greenhouse gas that traps up to 34 times as much heat as carbon dioxide over the course of a century. As ThinkProgress’ Joe Romm has written, “even small leaks in the natural gas production and delivery system can have a large climate impact — enough to gut the entire benefit of switching from coal-fired power to gas.”
The methane leaks are both hard to measure and significant, an issue the EPA is well aware of.
In January, the Obama administration announced plans to cut methane emissions from the oil and gas sector by 40 to 45 percent from 2012 levels by 2025. In 2012, methane emissions accounted for nearly 10 percent of all U.S. greenhouse gas pollution, and of that total nearly 30 percent came from the production, transmission, and distribution of oil and natural gas. Emissions from the oil and gas sector are projected to rise more than 25 percent by 2025 without substantial efforts to reduce them.
Michael Levi, a senior fellow for energy and the environment at the Council on Foreign Relations, recently authored an essay on the value to natural gas as a fuel in the fight against climate change. He argued that while its mitigating effect may not be as sharp as renewables, its political economy is great. He writes that “shale gas is no panacea:”
But with the right policies to protect communities where gas is produced and to harness the fuel as part of a broader climate strategy, it can play a critical role in confronting global warming. Without shale gas, U.S. greenhouse gas emissions would be higher, our climate policies would be weaker, and the odds of slashing future carbon dioxide emissions and meeting U.S. climate goals would be greatly reduced.
The turn against shale gas rests on three beliefs that have calcified into conventional wisdom among many environmental advocates. The first is that shale gas development causes massive damage to communities and the local environment — regardless of what regulations are put in place. This sets a daunting bar for any climate strategy that includes shale gas production. The second is that gas is no better than coal when it comes to climate change — at least not without big changes to the way gas is produced — and might even increase greenhouse gas emissions. This undercuts any imperative to wrestle with trade-offs between local risks and climate benefits from gas. The third is that renewable energy has made such rapid progress that a shift to a zero-carbon energy future is imminent. This makes natural gas unnecessary, and potentially a threat to a complete and speedy transition away from fossil fuels.
But each of these is a myth or half-truth. Strict rules and smart planning can safeguard communities. If policy drives natural gas to displace coal, the result can be much lower emissions. And, while renewables have made big strides, the biggest beneficiary of a setback to natural gas would, for now, still be coal.