US CO2 Output Drops. Is it Really Due to Natural Gas?

May 28, 2013

Co2 Scorecard:

Energy related CO2 emissions in the US fell by 205 million metric tons in 2012. CO2 Scorecard breaks it down and shows that nearly 75% of the decline is accounted for by demand reduction primarily due to the economy-wide energy efficiency and conservation measures in the transportation, residential and commercial sectors; the mild winter in the first quarter of 2012 also gave a helping hand.

Contrary to popular perception, the contribution of natural gas in the electric power sector was limited to around 26% of the total energy related CO2 reduction in 2012. Analysis of the changes in the electricity generation mix for each of the eight NERC regions in the US revealed that nearly 25-30% of the CO2 savings from coal-to-natural gas switch was offset when gas replaced zero carbon sources like hydro and nuclear. This effect was most prominent in the Western interconnection (WECC). Industries along with wind and solar had little measurable role in cutting CO2 emissions in 2012.

Greentechmedia:

Ever since it was reported last year that U.S. CO2 emissions had dropped to a twenty-year low, energy analysts and bloggers have engaged in a friendly academic tussle over the cause of the drop.

The conventional wisdom in the popular press is that natural gas played the dominant role by pushing coal out of the market. The Energy Information Administration also supports thisin its analysis. But the folks at CO2 Scorecard have come to a different conclusion: the historic 2012 drop in emissions was driven more by economy-wide efficiency than an increase in natural gas generation.

This isn’t the first time CO2 Scorecard has challenged the assumption that natural gas is America’s CO2 savior. A paper released last fall analyzing emissions reductions from January to March of 2012 found that the unusually warm winter accounted for 43 percent of the drop, while the displacement of coal with natural gas only accounted for 21 percent.

Now that the full numbers for 2012 are out, analysts have a better window into what’s driving America’s changing emissions profile. Once again, the folks at CO2 Scorecard found that natural gas accounted for only one quarter of last year’s reductions.

“Contrary to popular perception, 2012 data shows that the increased use of natural gas in the electric power sector is not the largest contributor of energy-related CO2 reductions in the U.S. over the past year. Nearly 75 percent of the CO2 savings are attributable to economy-wide demand reduction driven by energy efficiency, conservation and the mild winter of the first quarter of 2012,” write Shakeb Afsah and Kendyl Salcito in their analysis.

The analysts took a deeper dive into the different NERC regions that make up the U.S. electricity grid. They found that in five of the eight regions, the decline in coal generation was greater than the increase in natural gas generation. On a nationwide level, more than 50 million megawatt-hours of coal simply dropped off the map without any assistance from natural gas — a result of the decline in electricity consumption. And in some areas, natural gas actually displaced more hydro and nuclear than coal, thus adding to emissions.

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This analysis will likely add to the academic debate around U.S. emissions reductions rather than settle it, as there are many varying assumptions about what energy source is replacing what. But even if the study understates the role of gas in dropping emissions, the economy-wide impact of efficiency — particularly when it cuts coal out of the picture — is still substantial. The only way to continue steady reductions, say the researchers, is to put in place a long-term policy solution that encourages energy reductions, not just pushing a bonanza of natural gas production.

“The policy lesson is obvious — real and lasting reductions in CO2 come from economy-wide policy effects, not from the current transient boom in the U.S. natural gas market. Therefore, the best way to ensure continued economy-wide reductions in CO2 emissions is through a carbon tax,” the authors conclude.

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12 Responses to “US CO2 Output Drops. Is it Really Due to Natural Gas?”

  1. Matt Hubbard Says:

    It would be helpful if the percentage drop was also mentioned in the first paragraph, 3.7% lower than 2011 numbers. It wasn’t in the lead paragraph of the CO2 Scorecard story either. I had to do the numbers myself from the chart.

  2. jimbills Says:

    I don’t want to be the gadfly, but it’s important to look at our actual record in evaluating our future. If 74%-75% of the CO2 drop is due to reduced energy usage and efficiency, and 26% is due to NG replacing coal, exactly what percentage is due to renewables?

    If NG is replacing renewables, as that report indicates, then we’re going backwards, not forwards:

    http://www.bloomberg.com/news/2013-04-23/u-s-states-turn-against-renewable-energy-as-gas-plunges.html

    Natural gas isn’t a “bridge fuel”. It’s a last gasp.

    It’s also important to note that the drop in coal usage has been entirely offset by U.S. coal exports to China:

    http://news.nationalgeographic.com/news/energy/2013/03/130315-us-coal-exports/

    — John Eaves, chief executive officer of St. Louis, Missouri-based Arch Coal, which saw the bulk of its exports last year go to South Korea, told investors last month that the company would be proactive in working to gain greater port capacity. Despite the low price currently fetched for coal overseas, Eaves said the company expects the international market to improve even as domestic demand for coal recedes. “As we look to the U.S. over the next three to five years, let’s face it, demand’s going to be pretty flat,” he said. “We see exports as a long-term development opportunity.” —

  3. Nick Carter Says:

    Don’t forget too, that the Boomer generation is reducing its driving after retirement, while the Millenials are simply embracing the bicycle, scooter, train, and living close to McWork. Don’t count on those younger people to purchase EV’s just yet either. They’re carrying an enormous amount of debt from college tuition. Those of us in the middle who are either unemployed or underemployed have made do with less driving, and/or have purchased more fuel efficient vehicles. I’m sure that energy efficiency has helped too. Either way, it seems that lots of things will happen to eventually reduce the world’s carbon footprint. Some will be innovative, some will be downright disasterous. Just a thought.

    • junkdrawer88 Says:

      Here in Pittsburgh, we’re transitioning from a ‘Car Only’ system to a ‘Car/Bike Lane’ system.

      And I’d say the reasons are 50% Green / 50% Economic.

      With our rivers, universities, and forward looking government, Pittsburgh’s future is bright compared to the rest of the country.

  4. rayduray Says:

    Re: “I don’t want to be the gadfly, but….”

    Better the gadfly than the galdflea, a most unwelcomed guest to be sure!

  5. junkdrawer88 Says:

    I still believe that stopping the burning of coal here in the US (where most of the aerosols are removed) and shipping it to China where it is burnt dirty (and thus with aerosols) is a POLICY decision.

    See:

    http://www.huffingtonpost.com/dr-james-hansen/doubling-down-on-our-faustian-bargain_b_2989535.html

    Go ahead, call me a Conspiracy Theorist. Just don’t call me late for dinner.

  6. andrewfez Says:

    http://seekingalpha.com/article/1324481-chesapeake-energy-the-best-play-in-rising-natural-gas-prices

    Investors realize cheap abundant gas is a scam. This guy is positioning for a large increase in gas prices.

    • jimbills Says:

      He’s likely right. Fracked gas requires constant and very aggressive new drilling to replace rapidly depleting older wells, which hasn’t been happening to the degree needed for over a year. Add to that the increased consumption in NG for electricity and the initiation of LNG exports.

      As it is, $4/mmBtu is still below the production costs of NG – another strong reason why prices will have to rise.

      Interestingly, $4/mmBtu is about the price where natural gas becomes more expensive than coal for electrical generation. Expect coal to ramp up again as NG prices rise:

      http://www.pennenergy.com/articles/pennenergy/2013/04/rising-gas-prices-drive-coal-fired-power-up-in-march.html

      The country will get hammered as NG prices double (again) to $8 and possibly again to $16. Everyone will be wondering about our “abundant” and “cheap” natural gas. Meanwhile, coal will see a resurgence.

      This will be a “rinse and repeat” sort of situation. Skyrocketing prices in NG will create rapid drilling, which will lower prices, which will restart the LNG infrastructure and increased consumption, which will raise prices, which will see increased drilling, and so on. The same dynamics and interplay will continue with coal.

      Under a free market approach, we’ll have several more decades of heavy consumption of fossil fuels, and increasingly dirty fossil fuels at that. The prices for all fossil fuels will rise on a medium- to long-term basis, which will create a ramp-up for renewables, but we will hit 450 ppm well before seeing the point where renewables surpass coal/gas for electricity. And then we’ll have several more decades of continual coal/gas usage as that infrastructure gets phased out.

      This is the free market scenario to climate change (assuming rising energy costs doesn’t crash the global economy). Look at it with cold eyes and decide if that’s acceptable.

      • andrewfez Says:

        We could all buy shares in Exxon then use the dividends to invest in electric cars, home solar systems, and home efficiency. Use the company’s own money to purchase their replacements.

        Or we could all write letters to our representatives accompanied by $50 dollar checks – that would get their attention. You get 6,000 people to send so and so a $50 check and a letter that says, ‘clean energy: get-‘er-done’, and suddenly they don’t need Exxon to help get them re-elected.

  7. MorinMoss Says:

    While researching the US grid to refute another “EVs are dirty coal-powered vehicle” canards, I typed the following into Google – “us electricity grid makeup coal”

    And the top link was this blog post.

    Well done, Peter.

    • greenman3610 Says:

      thanks!
      I plugged it in,and it came up number 4. I think google adjusts somewhat to fit its evolving profile of you and your “likes”.
      kind of like the NSA


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