Shale Gas Drilling Boom Credited for Reduction of CO2 Emissions to 20 Year Low

According to the U.S. Energy Information Agency (“EIA”), the United States’ energy related carbon dioxide emissions in 2011 were the lowest in 20 years.  One of the primary reasons cited for this decline in CO2 emissions is the increase in natural gas fired power plants.  The EIA’s report states that “[t]he introduction of new, efficient gas-fired capacity and a recent decline in the price of natural gas has helped boost natural gas' share [of electric energy production] from 14 percent in 2000 to 24 percent in 2011.”  Natural gas power generation has the lowest carbon intensity per Btu of the fossil fuels. 

Other reasons were also cited as contributing to the decline of CO2 emissions in 2011, including slowed economic growth and an increase in the use of renewable fossil fuel alternatives.

The increase in natural gas fired power plants can be largely attributed to the fact that shale gas drilling has made natural gas plentiful and cheap.  In fact, an Associated Press article on the EIA’s announcement reported that many scientists didn’t see the sharp drop in CO2 emissions because it happened as a result of market forces rather than government regulatory action. 

Of course, many will use the EIA’s announcement to support arguments for the wholesale abandonment of coal as a source of electrical energy production.  But the EIA report warns that it is difficult to draw long-term conclusions based upon one year of data.  There are also questions as to whether natural gas will remain cheap.  The Associated Press article quoted Jason Hayes, a spokesman for the American Coal Counsel, predicting that it will not.  Mr. Hayes believes that the demise of coal fired power plants has been much exaggerated.  He believes that power companies will continue to build coal fired power plants as pollution control technology advances to meet new EPA standards that will take effect in the coming years.

The recent boom in shale drilling has, without a doubt, dramatically decreased natural gas prices.  As long as those prices remain low and stable, electric power companies will increasingly rely upon natural gas to produce electricity.  Based upon the EIA’s data, this could continue to decrease air pollution.  The question, however, is whether natural gas prices will remain low enough to be an attractive alternative to coal.  The price of natural gas has been historically volatile. Coal remains a relatively cheap and reliable source of electricity production.  Accordingly, it is premature to predict the wholesale abandonment of coal as a source of electric power generation in the future.  The hope from here is that the United States promotes a balanced energy policy, as well as advances in pollution control technology, to produce the cheapest, most reliable, most efficient, and cleanest electricity possible.