Clean Power Plan or not, carbon emissions are declining and are at their lowest levels since 1991. That’s according to the US Energy Information Administration, which says that it is because of a changing electricity portfolio and milder weather.
In its short term energy outlook, the agency says that 2016 will become the first year in which natural gas officially surpasses that of coal generation. It says that coal consumption dropped by 18 percent in the first half of the year compared to the first six months of 2015.
Natural gas consumption fell by 1 percent during that time frame. And renewable energy growth increased by 9 percent during the first six months of 2016, with wind energy making up half of that. Hydro, meantime, comprised 35 percent of the 9 percent increase in renewable energy growth and solar energy has been 13 percent.
Furthermore, in the first half of 2016, the United States had the fewest heating degree days since 1949. Energy consumption was thus 2 percent less in those months than during the same time period in 2015.
U.S. energy-related carbon dioxide (CO2) emissions totaled 2,530 million metric tons in the first six months of 2016. This was the lowest emissions level for the first six months of the year since 1991, as mild weather and changes in the fuels used to generate electricity contributed to the decline in energy-related emissions. EIA’s Short-Term Energy Outlook projects that energy-associated CO2 emissions will fall to 5,179 million metric tons in 2016, the lowest annual level since 1992.
“Utilities are ready, willing and able to drive their asset base to lower carbon,” says Kit Konolige, a utility analyst with Bloomberg Intelligence, during a conference call. “They are happy to do it as long as they get a return. The coal plants they are retiring have little remaining non-depreciating value anyway.”
The U.S. Energy Information Administration has said that coal use has declined by 33 percent in the last decade and that it would fall another 31 percent under the Clean Power Plan. Natural gas, mostly, takes its place.
If the ruling is tossed, then the best that the coal sector could hope for is that some utilities would keep certain coal-fired plants alive. That, in turn, would curb the growth of natural gas by 11 percent from today, says the energy agency.
Interestingly — but not unexpectedly — if natural gas generation used to fuel power plants continues to outpace that of coal, the agency says that total carbon emissions from that fuel will exceed that of coal-fired generation. That could one reason why natural gas producers have stayed relatively quiet during the Clean Power Plan debate, realizing that once the pressure is off coal that policymakers will turn their attention to it.
The Clean Power Plan requires a 32 percent cut in carbon emissions by 2030, from 2005 levels. States can achieve this by having their utilities trade out their carbon-intensive coal plants for natural gas or renewables. Or they can do this by implementing renewable energy portfolio standards to require that mandate certain levels of green energy.
Some environmental groups do see natural gas an impediment — not a bridge — to a renewable future. Pointing to the International Energy Agency’s studies, the Sierra Club says that such a strategy will still result in temperature rises of 3.5 degrees Celsius by century’s end — far more than the 1.5 degrees-2 degrees Celsius limit set by the COP21 climate accord in Paris last December.
A number of natural gas-heavy utilities, however, are backing EPA: Dominion Resources, Pacific Gas & Electric, NextEra Energy and Southern California Edison, says Bloomberg Intelligence.