Monday, December 10, 2012

Stunning Fact: Gas versus Coal Competition Is So Intense That 2012 Increases In Gas Generation Match Exactly Decreases In Coal Generation

How intense is the gas versus coal competition? It is so intense that the increase in gas generation matches almost to the megawatt-hour the decreases in coal generation, according to EIA data for 2012 through September.

Electricity generation from gas-fired power plants in the US is up 201 billion kilowatt-hours through September 2012, when compared to the same period in 2011.  Electricity generation from coal-fired power plants is down 200 billion kilowatt-hours in 2012.  www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_10_b and eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_07_b.

The competition between coal and gas for power sales is intense, daily and hinges on the price of each.  Moreover, this data debunks claims that the rise of shale gas and the corresponding jump in gas-fired generation has not led directly to a decline in coal generation and US carbon emissions.

5 comments:

  1. Concerned ScientistDecember 10, 2012 at 9:42 AM

    Good point. No matter how much the Howarths and Josh Foxs of the world wish it were otherwise shale gas is the best thing that has happened from a decreasing net pollution standpoint in a decade or more. Those fighting it are, perhaps unwittingly, fighting for more air, water and GHG pollution. Even those fighting to make it unreasonably difficult are fighting for more air, water and GHG pollution because their actions will lead to higher prices.

    John, I see that as one of your campaign issues you have taxation of gas production from the Marcellus. Do you think this will adversely affect the switch from coal to gas? What will you do to ensure that doesn't happen?

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    1. Every major gas play in the USA pays a severance tax and many also a property tax. The Marcellus gas is also the lowest cost, highest profit margin shale gas in the US, according to Standard & Poor. PA's current policy is unsupportable. Literally no other state is doing it.

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    2. Concerned ScientistDecember 10, 2012 at 1:37 PM

      I have always supported a tax, but if the tax would tip the scales toward coal as the cheaper energy source I would have to oppose it. It might be best to push through a tax on both coal and gas at the same time (essentially a carbon tax) so that the tax doesn't cause switching from gas to coal. I'd also hate to see more heating oil burned because it was cheaper than natural gas by the amount of the tax.

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  2. As I recollect during the severance tax debate, and I'm sure John Hanger will confirm this if true or false, an investigation of a modest but meaningful severance tax on Marcellus Shale production in Pennsylvania was not shown to impact the marginal price of natural gas in the US. Thus, concerns that taxing gas would somehow favor coal would be unfounded. This tax would be paid for by natural gas company "shareholders," rather than natural gas "consumers" while benefitting all Pennsylvanians.

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    1. Concerned ScientistDecember 13, 2012 at 9:43 AM

      Ahh I see - thanks. Duh. That's obvious now that I think about it. Gas is priced nationally or even internationally (including Canada) so raising the cost in PA won't affect the national cost that much if at all. Now if every state raised their tax at the same time or if there was a federal tax that would have an impact but one state raising it does not.

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