Monday, December 10, 2012

Stunning Fact: US Gas-Fired Electricity Production Up 26% In 2012 But Projected To Fall In 2013

2012 will be another record year for producing natural gas within the USA, despite low natural gas prices.  And because of low-natural gas prices, gas-fired electricity generation is up a stunning 26% through September 2012, when compared to the same period in 2011.  Gas power plants generated 974.7 billion kilowatt-hours in the first 9 months of this year, compared to 773.3 billion kilowatt-hours in 2011.

Made possible by the shale gas boom that lowered natural gas prices, making gas competitive with coal, the spike in natural gas electricity in 2012 has cut significantly 2012 carbon emissions--lowering them to 1992 levels.  The gas-fired electricity generation boom will also slash toxic air pollution in 2012 like mercury, lead and arsenic, as using natural gas to make electricity produces zero toxic air pollutants.

In 2012, the shale gas revolution is producing cleaner and cheaper electricity all across America. Great news!

But since the market bottom of $1.80 for a thousand cubic feet in April, natural gas prices have been rising and have been consistently above $3.25 for a thousand cubic feet of late.  Though $3.25 is still bargain-priced gas, the price competition between coal and gas is so intense that gas fired generation is likely to lose market share to coal generation in 2013 if gas prices remain at $3.25 or higher.

Indeed, for 2013, EIA is projecting that coal generation recaptures some lost market share and gas sees a falling market share.  If so, 2013 will be the first time since 2008 that gas will lose ground to coal-fired power.


  1. Concerned ScientistDecember 10, 2012 at 9:46 AM

    John, do you think that due to the new EPA regs that many coal plants will be forced to close and that they will most likely be replaced with wind, solar and gas rather than coal-burning power plants? If that is the case, do you think that 2013 may see a switch of some gas back to coal, but that over the next ten years we should see a significant and more permanent shift from coal to gas?

  2. Two factors to keep in mind is that electricity demand may not increase and could even fall plus the coal plants that are closing tend to be very old and have not run much during the last few years. The point is that the nation does not need much new additional capacity. Some old plants need to be replaced but load growth is low or non-existent.

    During the next 10 years, most projections suggest growing market shares for gas and renewable energy capacity. production.