Gas to Overtake Coal by 2040 as Source of Electricity Generation

Gas is projected to overtake coal as the largest source of power for U.S. electricity generation by 2040. So concludes the US Energy Information Administration’s (EIA) Annual Energy Outlook (AEO) 2014. The report projects that in the coming year, natural gas will account for a 35 percent share, predicts the EIA, compared to 32 percent for coal.

This is a definite trend, and, in many ways, a good one for those of us who worry about climate change. At least, insofar as gas is considerably cleaner than coal. The impact of this gas boom on renewables, and nuclear, for that matter, is another story.  The forecast is based on current production trends, though there are those who feel that the current gas boom is not economically sustainable. We also need to understand these trends in the context of the world energy picture. Globally, the situation is quite a bit different, because of the influence of the non-OECD countries, primarily India and China. There we are seeing coal on the move to overtake oil as the number one energy source. It’s almost like a rotation of sources. As gas becomes cheaper and more abundant here, that ends up sending other forms of energy elsewhere. That’s one reason coal production numbers are still going up here: overseas exports. Because of difficulties in shipping gas, other countries are not benefiting from the low gas prices we are seeing here, an advantage for domestic energy intensive industries. There is another reason domestic coal production is on the rise.

Despite burning all this natural gas and the shutting down hundreds of coal plants, coal consumption in the U.S. is actually up 5.3 percent for the first three quarters of 2013 compared to 2012, according to EIA.  Most of that growth was in the electric power sector.  Overall, they’re predicting a 4.4 percent growth for the whole year. That’s a bit of a surprise.

So even though gas consumption is growing faster, coal is still growing here too. There are fewer plants, but they’re bigger plants and they are burning more coal. They’re being run to the max, which allows them to burn more efficiently, so it’s actually more economical.

Worldwide, an IEA article says that despite the aggressive growth in renewables, today’s share of fossil fuels is 82 percent, the same as it was 25 years ago. All the growth in renewables has been offset by coal, oil, and other fossil fuels, primarily in the non-OECD nations. They do predict that renewables will influence the mix such that by 2035 fossil fuel’s share will drop to 75 percent. That’s moving in the right direction, although a lot of people are worried that it’s not moving fast enough. There’s a strong sense of urgency that we need to move that dial much quicker. Experts say we have a budget of two degrees (C) worth of carbon before the climate impact becomes disastrous, and right now we are spending that budget much too quickly.

For more about how natural gas is impacting renewable energy, see my Justmeans article, "Nuclear and Wind Energy Blocked by Natural Gas—For Now." 

 

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