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Page added on December 26, 2013

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DOE: Gas to outpace coal by 2040


Natural gas will overtake coal to provide the largest share of U.S. electrical power generation by 2040, according to the latest projections from the federal Department of Energy.

Natural gas will produce about 35 percent of total U.S. generation, compared to 32 percent for coal, in 2040, according to the department’s Energy Information Administration estimates.

“Projected low prices for natural gas make it a very attractive fuel for new generating capacity,” the agency said in a preview of its 2014 Annual Energy Outlook. “In some areas, natural gas-fired generation replaces generation formerly supplied by coal and nuclear.”

Just last year, the EIA had projected coal to maintain its dominance over natural gas, with 35 percent of generation in 2040, compared to 30 percent for natural gas.

Renewable power is forecast to increase its share of generation from 12 percent in 2012 to about 16 percent in 2040, according to the new EIA figures, released on Dec. 16.

“Generation from renewable resources grows in response to federal tax credits, state-level policies, and federal requirements to use more biomass-based transportation fuels, some of which can produce electricity as a byproduct of their production processes,” the EIA said. “In their final decade of projection, however, renewable generation growth is driven by increasing cost competitiveness with other nonrenewable technologies.”

Coal has long been the nation’s leading source of electricity, and industry boosters for many years bragged about it producing more than half of all U.S. electricity. But coal has been under major pressure, with competition from inexpensive natural gas, growing concerns about global warming and tougher federal air pollution regulations on power plants.

“Coal-fired generation is getting increasingly expensive compared with cleaner power sources,” said Jeff Deyette, assistant director of energy research at UCS and co-author of the study, which was initially released last year and updated this month. “This shift in economics is a historic opportunity to modernize our electric sector and gain the economic, health and climate benefits that come with it.”

Earlier this month, Union of Concerned Scientists researchers reported that more 300 more coal-fired power plants — in addition to the 87 gigawatts of generation capacity already retired or slated for retirement — are no longer economically competitive and should be considered for closure. These “ripe for retirement” plants produce electricity that is more expensive than electricity from an average existing natural gas plant, once the costs of modern pollution controls are included, the researchers said in a paper published in the peer-reviewed journal Electricity.

Over the last few years, Central Appalachian coal has been particularly hard hit, in part because of competition from Wyoming and Illinois, but also because the easy-to-get reserves in the region are running out.

The new EIA report forecasts an “accelerated decline” in Central Appalachian coal production, with annual output dropping from 148 million tons in 2012 to 80 million tons in 2040. Northern Appalachian production, meanwhile, is forecast to increase from 126 million tons to 151 million tons over the same period.

“The combination of slow growth in electricity demand, competitively priced natural gas, programs encouraging renewable fuel use, and the implementation of environmental rules dampens future coal use,” the EIA said.

EIA analysts forecast that coal-fired generation will flatten out after 2020, as older and less efficient power plants are retired and fewer new coal plants are built.

The EIA said that market concerns about greenhouse gas emission “continue to dampen the expansion of coal-fired capacity,” but that its forecast is based on current laws and policies, which do not require curbs on global warming pollution.

Meanwhile, natural gas production has been booming, as driller tap into huge shale-gas resources like the Marcellus in West Virginia. They’re using advanced technologies, including hydraulic fracturing and horizontal drilling, to reach gas reservoirs that they previously couldn’t.

The new EIA report said that, “Ongoing improvements in advanced technologies for crude oil and natural gas production continue to lift domestic supply and reshape the U.S. energy economy.”

The EIA projected that natural gas production would continue to grow steadily, with a 56 percent increase between 2012 and 2040, when output reaches 37.6 trillion cubic feet.

The forecast for cumulative production of “dry” natural gas is about 11 percent higher than last year’s EIA projections, primarily reflecting continued growth in shale-gas production. Another contributing factor, the EIA said, is ongoing drilling in shale and other plays with high concentrations of natural gas liquids — such as ethane, propane and butane — which in energy-equivalent terms have a higher value than dry natural gas.

WV Gazette

9 Comments on "DOE: Gas to outpace coal by 2040"

  1. Bob Inget on Thu, 26th Dec 2013 2:23 pm 

    With coal burning killing millions world
    wide, one has to question while ‘fracking’ is attracting so much bad press and proven health effects of coal
    almost none?

    With no hard evidence I’ll guess the coal industry is encouraging well intentioned anti fracking folks the same way big oil & coal started the ‘Great Chemtrail Conspiracy” to defuse climate change movements.

    Make no mistake, there is no love lost between the coal and natural gas industries. This split goes back to the early nineteen hundreds when ‘natural’ gas replaced gasified coal ‘town’ gas.

  2. rockman on Thu, 26th Dec 2013 3:44 pm 

    Good point Bob. Also: “Projected low prices for natural gas make it a very attractive fuel for new generating capacity,” And how does that projection look if one uses high NG prices? We can use the current global response based on the high NG prices those consumers are dealing with: expand coal consumption as fast as possible. Luckily for the rest of the world the US is doing its part to help by expanding our coal exports as fast as possible.

    So the question: when US consumers face such high NG prices (as they briefly experienced just 5 years ago) will they shun their huge coal resources? Many today would say yes. I say talk is cheap…a lot cheaper than $15/mcf.

  3. Dave Thompson on Thu, 26th Dec 2013 6:46 pm 

    I do not see NG being a cheap alternative for long, the industry’s knows how to make money. The rates will ultimately all stabilize so that coal or gas or whatever the multinational corporations are doing for world profit margins keep the bottom line fat. I think we are heading into an era of up and down markets, manipulated to keep the world plutocracy afloat. Baring an earth shaking event unforeseen by the string pullers all should be fine.LOL

  4. GregT on Thu, 26th Dec 2013 8:19 pm 

    Coal and natural gas both contribute to the accumulation of greenhouse gases in the environment. When the ultimate price is measured in damage done to the only planet that we will ever have, neither should be considered to be ‘cheap’.

    Both should be left in the ground, where they belong.

  5. J-Gav on Thu, 26th Dec 2013 8:53 pm 

    Natgas? Oh, we’ll be getting our fill of it once the permafrost begins seriously eructing its contents. Not to mention half-witted projects to exploit undersea clathrates.

  6. Kenz300 on Thu, 26th Dec 2013 9:35 pm 

    The world needs to stop building any more coal fired power plants if we are to have any hope of dealing with Climate Change.

    The price of wind and solar is dropping faster than anyone predicted just a few years ago.

    Renewables are growing faster than previous projection.

  7. Makati1 on Fri, 27th Dec 2013 12:36 am 

    And the beat goes on …

  8. GregT on Fri, 27th Dec 2013 12:42 am 

    The ‘world’ needs less industrial activity from human beings, period.

    Wind and solar are both industries that require further accumulations of greenhouse gases to be released into the environment. All of the stuff we run with electricity also requires further industrial activity, that also adds further to the accumulation.

    We are already past levels considered to be safe, and these levels will continue to wreak environmental damage for at least another century.

    The time to stop all of this stupidity was 30 years ago when we first learned about the consequences of our actions. It may already be too late to stop our own extinction, but that does not mean that we shouldn’t try.

  9. rollin on Fri, 27th Dec 2013 6:58 pm 

    At current production levels we are in deep trouble. Increasing or shifting production will not make much of a difference. Price increases and just plain lack of availability seem to be the only real levers to reduce production.

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