The United States last year curbed greenhouse gas (GHG) emissions to mid-1990 levels in large part to utilities burning more natural gas, but that reduction will be difficult to duplicate globally, according to the International Energy Agency (IEA).
“Redrawing the Energy Climate Map” is a special 134-page report to the IEA’s annual World Energy Outlook. Natural gas prices already are increasing from 2012 levels, and that trajectory may lead utilities to use more coal instead, according to researchers.
“In the absence of environmental or other regulations posing additional restrictions” on carbon dioxide (CO2) emissions standards on existing power plants “could again become economic relative to gas for natural gas prices in the range $4.50-5.00/MMBtu or higher.”
Beyond the United States, global energy-related GHG emissions in 2012 hit an all-time high, which sent countries off course to keep temperatures below 2 degrees Celsius (C) by 2020, said IEA Executive Director Maria van der Hoeven. The report was overseen by Chief Economist Fatih Birol.
“In short, we are drifting off-track, and global negotiations are not expected to yield agreement before 2015, and to be enforced after 2020,” van der Hoeven said.
U.S. contributors to the report included the U.S. Environmental Protection Agency, the Natural Resources Defense Council, the Center for Climate and Energy Solutions and Columbia University. ExxonMobil Corp. and Royal Dutch Shell plc also contributed.
Energy-related CO2 emissions reached a record 31.6 gigatons in 2012, a year/year increase of 1.4%, said Birol. Current trends forecast a 5.3-degree C increase, well above the 2-degree goal agreed to in 2009 by industrialized nations.
“The decline in energy-related CO2 emissions in the United States in recent years has been one of the bright spots in the global picture. One of the key reasons has been the increased availability of natural gas, linked to the shale gas revolution, which has led to lower prices and increased competitiveness of natural gas versus coal in the U.S. power sector.”
Between 2008 and 2012, when U.S. power demand was relatively flat, coal’s share in domestic electricity output fell to 37% from 49%, while gas rose to 30% from 21%, noted IEA. In 2011, when the share of gas already had increased “significantly, the utilization rate of combined-cycle gas turbines was still below 50%.
“Gas-fired combined-cycle plants produce on average half the emissions per kilowatt hour than conventional coal-fired generation Part of this gain, however, is offset on a life-cycle basis due to methane emissions from natural gas production and distribution.”
Whether the trend in coal-to-gas switching in power generation continues depends on the commodities’ prices, said IEA. However, the agency — like the U.S. Energy Information Administration and independent analysts have noted — saw signs of a reversal in 1Q2013, when “coal consumption in power generation increased 14% compared with the same period in the previous year, as natural gas prices at Henry Hub increased by around 40% from $2.45/MMBtu in 2012 to $3.49/MMBtu in the same period of 2013.”
Unconventional hydrocarbons’ potential beyond the United States holds promise for countries that heavily rely on coal. “But due to the expected relative coal-to-gas prices in regions outside North America, the U.S. story is not expected to be replicated on a large scale in the period up to 2020.”
On its own, said IEA, “natural gas cannot provide the answer to the challenge of climate change.”
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