Natural gas has always had a yin-yang relationship with coal. When coal’s fortunes were on the rise, as they were only a few years ago, the long-term role of gas as a U.S. power plant fuel was being questioned—there simply wasn’t enough gas in the ground, some said. Now, with the shale revolution and a push to slash greenhouse gas emissions, coal is frequently portrayed in a death spiral, with gas the clear victor. But it is not that simple. Today, we examine the ongoing interplay between the electric industry’s two favorite fossil fuels, and whether coal is heading out or hanging on—and what it means for natural gas producers.
Coal-fired power plants in the U.S. have generated more megawatt-hours (MWh) of electricity than their natural gas-fired counterparts since the electric industry was founded more than 130 years ago—except for one recent month (April 2015) when gas for the first (and so far only) time edged out coal as the power sector’s fossil fuel of choice. Coal’s long-time, stubborn dominance shouldn’t be forgotten as the U.S. begins implementation of the newly final Clean Power Plan (CPP), which calls for the power sector to reduce its emissions of carbon dioxide (CO2) by 32% (from 2005 levels) by 2030. Coal plants emit near twice as much CO2 as gas plants (206 pounds/MMBtu, compared with 117 for gas), so they’ve been viewed as the CPP’s primary target.
SCHOOL OF ENERGY HOUSTON!
+ Pre School International Energy Day
RBN's School of Energy returns to Houston with Guest content, CPE Credits and our full energy curriculum.
Houston - September 28 - 30, 2015
A closer look, however, suggests that the talk about coal’s demise (to paraphrase Mark Twain) may be exaggerated. Natural gas-fired power plants certainly have taken on an increasingly important role: through the early 2000’s, coal units as a whole were typically generating two or three times as much power each month than gas units, but in recent years gas has been catching up, and now nipping at coal’s heels according to data from the Energy Information Administration (EIA - see Figure 1). There are two primary reasons for this: tightening environmental rules and the increasing availability (and lower price) of gas. This world is quite different than what was envisaged just 10 years ago when the consensus was that U.S. natural gas production had peaked, and that we should make plans to import vast amounts of liquefied natural gas (LNG) and to build scores of new coal plants to keep the lights on.
Join Backstage Pass to Read Full Article
