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Natural gas surpasses coal as biggest electricity source

Published:Tuesday | July 14, 2015 | 11:19 AM

Natural gas overtook coal as the top source of United States (US) electric power generation for the first time ever earlier this spring, a milestone that has been in the making for years as the price of gas slides and new regulations make coal more risky for power generators.

About 31 per cent of electric power generation in April came from natural gas, and 30 per cent from coal, according to a recently released report from the research company SNL Energy, which used data from the US Energy Department. Nuclear power came in third at 20 per cent.

A drilling boom that started in 2008 has boosted US natural gas production by 30 per cent and made the United States the world's biggest combined producer of oil and natural gas. Hydraulic fracturing has allowed energy companies to tap huge volumes of gas trapped deep underground in shale formations.

That has driven the price of natural gas sharply lower to levels about a third of what they were just 10 years ago.

At the same time, power companies have been installing more natural gas turbines at their plants as they make them more flexible and retiring some older coal-fired facilities. They have long switched between natural gas and coal, depending on commodity prices. However, new regulations that aim to restrict the emission of greenhouse gases, and the risk that more are on the way, have added pressure to make the switch.

Clean Power Plan

The burning of natural gas produces carbon dioxide and nitrogen oxides, but far less than coal.

The Obama administration next month is expected to complete a so-called Clean Power Plan intended to cut earth-warming pollution from power plants by 30 per cent by 2030. The rule will set the first national limits on carbon dioxide coming from existing power plants and set in motion one of the most significant US actions ever to address global warming. The United States limits emissions of arsenic, mercury and lead pollution from power plants, but there are no national limits on carbon pollution from power plants.

Congressional Republicans have vowed to block the rule, and some GOP governors have said their states will not comply.

These regulatory and price changes have begun to play out in usage data.

Federal data show that in April, the amount of electricity generated with natural gas climbed 21 per cent compared to April 2014, while the amount generated with coal fell 19 per cent.

In April 2010, some 44 per cent of electric power generation came from coal and 22 per cent from gas, according to SNL Energy.

The amount of coal and gas used will continue to vary depending on price.

The EIA said in a May report that it expects the level of coal-generated electricity to rebound as natural gas prices rise later this year and coal-fired plants return from spring maintenance. Overall, the EIA expects about 36 per cent of total US electricity generation to come from coal in 2015 and 31 per cent to come from natural gas.

- AP