Gas To Displace More Coal In 2012, Lowering Carbon Emissions Gas is increasingly displacing coal in electricity generation, and that is a major reason why US energy related carbon emissions have fallen to 1998 levels. The trends of gas displacing coal and thereby gas lowering carbon emissions will continue in 2012, driven forward by low gas prices produced by the shale gas boom, according to the EIA's latest Short-Term Energy Outlook that was released yesterday. See data at: www.eia.gov/forecasts/steo/pdf/steo_full.pdf. For some, these facts are inconvenient, causing more than a few to fall silent about the historic shift from coal to gas that is inexorably taking place every year. Ignoring these facts damages the truth, our environment, and economy so let's dive into them. While coal provided 52% of America's electricity in 2000, coal's electricity generation market share fell again in 2011 to about 43% and gas's rose to 24.4%. Coal has been losing market share to gas and renewable energy at the rate of about 0.6% per year. This long-term trend will continue, according to EIA. EIA's January 10 Short-Term Energy Outlook writes: "EIA expects coal to fuel 42.2 per cent of total generation this year and 41.5 per cent in 2013, down from a share of 43 per cent in 2011. In contrast the share of generation fueled by natural gas is forecast to rise from 24.4 per cent in 2011 to 25.4% in 2012 and 25.8% in 2013" EIA states at page 8: "Coal consumption for electricity generation fell by 30 million short tons (MMst)(3.1 percent) in 2011. Electric power sector coal consumption is forecast to decline by an additional 2.1 per cent as generation from natural gas, nuclear, wind increases and electricity consumption remains flat. EIA expects the decline in electric power sector coal consumption to continue in 2013, although at a slower rate, as increases from other sources continue to displace coal-fired electricity generation." The two main reasons why gas is displacing coal is the low-price of natural gas and the low capital costs of building new gas-fired generation. The 2011 average Henry Hub spot price for gas was $4 for a thousand cubic feet, low indeed. Stunningly EIA forecasts that the 2012 average Henry Hub gas price once more will drop sharply and reach an amazingly low $3.53. Why is the gas price falling so that gas is winning market share from coal in the electricity generation market? The shale gas revolution is the one and only reason. Shale gas provided 1% of US natural gas supplies in 2000; 16% by February 2011; and 34% by December 2011. All that shale gas has crashed the price of natural gas in the USA. The results of this revolution include huge savings for consumers, avoidance of a recession in 2011, and lower carbon emissions from electricity generation, as gas and renewable energy displace more carbon intensive coal. Inconvenient or not, those are the facts. http://johnhanger.blogspot.com/2012/01/gas-to-displace-more-coal-in-2012.html