Thursday, May 6, 2010

2009 Carbon Output -7%: Coal Use Down, NG Use Up - Anybody Surprised?

The EIA released its annual "U.S. Carbon Dioxide Emissions" report for 2009 yesterday.  The report showed that annual carbon dioxide emissions decreased 7% in the U.S. last year, the biggest decrease since 1949.  The Financial Times has a nice summary of the report

This decline in CO2 is obviously good news.  The bad news, of course, is that the recession played a part in reducing emissions, but it only accounted for one third of the decrease.  The remainder resulted equally from a decrease in energy intensity (pegged to a unit of GDP) and carbon intensity of the energy supply.  The carbon intensity largely decreased because utilities increased their use of natural gas and decreased their use of coal.  The chart below tells the story.

Gas fans will remember the dark days of mid-2009 when natural gas prices dropped below coal prices on a per-Btu basis.  This led utilities to operate gas-fired generators more than usual.  The fun ended for most utilities with take-or-pay coal contracts as coal began piling up.  But the switching led to a market share gain for natural gas over coal in the power generation industry.

We've been saying all along that substituting natural gas for coal in power generation will immediately and significantly reduce carbon dioxide output in the power generation sector.  It will not require a big transition since the country has a large inventory of under-utilized gas-fired plants.  Not only will carbon dioxide output decrease but so will sulfur dioxide, mercury and particulate emissions.  It's nice to see that the data backs up this assertion.

No matter where you come out on the global warming debate, reducing greenhouse gasses is an important and beneficial goal.  Bottom line:  the less impact humans have on the atmosphere, the better.  I've long bristled at the argument that developing nations like China and India are increasing their coal and carbon use, so why should the U.S. "take one for the team" by sticking to international accords to reduce atmospheric carbon?  Leadership, that's why.  It is 3rd grade logic to say "they're not doing it so why should I?"  If we are the best country in the world (and I think we are), we need to take a leadership position and do the right thing.

The Financial Times quipped: "(t)he death of US coal, it seems, is marching on."  These are strong words.  You could point to health statistics and say the same thing about cigarettes, but you likely would be wrong on both counts.

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