With Rising Natural Gas Prices, Utilities Turn Back to Coal

Rising natural gas prices are boosting utilities’ use of coal again, which is expected to rise throughout this year.

In fact, carbon emissions from coal-fired power plants are up 7.1% for the first quarter compared to Q1 2012, according to an analysis by the Environmental Integrity Project. 

From 2005-2012, the use of coal had steadily declined, cutting carbon emissions from power plants 13.1%. That’s due to a variety of factors: greater reliance on natural gas; rapid development of wind energy and increasing efficiency; moderate demand; and the closure of aging coal plants to avoid pollution control requirements.

But this year, coal-based generation is expected to rise 8.7%compared to last, although the Energy Information Agency doesn’t anticipate them returning to pre-2005 levels.  

Which States?

The states with the most polluting power plants are Texas – where they emit more than double the carbon than any other state (251 million tons a year), virtually unchanged from 2005 – followed by Florida, Pennsylvania, Indiana and Ohio. These five states account for almost a third of the carbon emissions spewed from US power plants in 2012.  

Kentucky is the worst offender in terms of carbon emissions per megawatt hour, because the state still depends on coal. It is followed by Wyoming, West Virginia, Indiana and North Dakota.  

Surprisingly Idaho leads the nation for the least carbon emissions per megawatt hour, followed by Washington, Vermont, Oregon and Connecticut. These states have a much more diversified energy mix.

"As natural gas gets more expensive, coal is finding its way back into the U.S. electricity generation picture, and that means higher carbon dioxide emissions. Although power companies plan to retire 45 gigawatts of coal capacity through 2016 due to low natural gas prices, the increased availability of renewables, moderate demand, and the cost of complying with long delayed Clean Air Act rules, a change in just one of those factors (natural gas prices) can encourage plant operators to squeeze more generation out of remaining coal plants,"  notes Eric Schaeffer, Project Director of Environmental Integrity Project.

Prices for natural gas will increase about 34% above 2012 levels while prices for coal remain flat, making it attractive to power companies that can switch to cheaper fuels, according to data from the Energy Information Administration (EIA).

Over the past seven years, US electrical demand has been flat and the EIA projects it to increase at about 1% a year as the economy recovers. Natural gas prices have been extremely low and thus its use has grown 60% since 2005, while coal use declined 25%.

Wind-generated electricity has grown seven-fold since 2005 to about 141 million megawatt hours, and is expected to increase by another 30% by 2014.  

The volatility in a natural gas prices encourages utilities to hang on to their coal plants. "It is time for states who have been slow to embrace energy efficiency or no-carbon renewables like wind and solar to step up if we want to decrease global warming emissions in the long term," says Schaeffer.

Emissions data comes from the US Environmental Protection Agency’s Air Markets Program Database and net generation data is from the U.S. Energy Information Administration’s latest reports.

Last year, coal supplied about 30% of the world’s energy, the highest level since 1969.

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