For decades US carbon emissions rose steadily almost year after year. The growing economy and population powered the carbon climb. Then, stunningly, from 2007 to 2012 the carbon climb turned into the carbon plunge.
US energy related carbon emissions plummeted from approximately 6.02 billion tons in 2007 to 5.29 billion tons in 2012. The big drop was driven primarily by a sharp decline in coal generation that had provided 48% of power in 2007 but just 37% in 2012, as a result of cheap natural gas displacing coal. Other contributing factors were efficiency that cut oil consumption and more renewable energy.
Importantly, the economic collapse of 2008-2009 does not explain the approximately 700 million ton carbon emission decline from 2007-2012. The US economy, as measured by Gross Domestic Product, was bigger in 2012 than in 2007, as was the population of America. America changed its energy mix between 2007 and 2012 in ways that cut carbon, despite a bigger economy and population.
The sharp declines of carbon emissions during the 2007-2012 period, however, have come to at least a temporary end. Rising emissions have resumed. Carbon emissions will increase 2.4% in 2013 and then another 0.4% in 2014 or by about a 150 million tons per year, according to the latest data from the EIA.
The questions become, did US energy related carbon emissions bottom in 2012? Have carbon emissions resumed a steady climb again? Or will carbon emissions fall 20% by 2020 from their peak?
The available data are flashing warning signs. The US currently uses about 4 trillion kilowatt-hours of electricity annually, and the rate of increase in electricity consumption has slowed. But it has not gone to zero.
Most projections expect the US to see electricity consumption rise about 1% per year and that rate of increase is much slower than historic rates. But to just meet the annual 1% increase in electricity consumption, the US will have to generate each year an additional 40 billion kilowatt-hours. And from where is that additional electricity going to come?
New wind and solar capacity will be stretched simply to meet this annual 1% increase in electricity consumption, as wind and solar in combination have never yet increased their production by 40 billion kilowatt-hours in one year. But it is reasonable to expect that they will, and they perhaps could soon get to a combined annual increase of 50 billion kilowatt-hours.
Or to put it another way, new renewable power production will likely meet the annual increase in electricity consumption, as long as the rate of growth is kept to 1%, but will not displace hardly any of the existing coal and natural gas electricity generation production.
If carbon emissions are to decline in the electricity sector in the next 5 or 10 years, there is just one way for that to happen, without a sharp and immediate change in current trends. That one way is a repeat of what happened from 2007 to 2012. Natural gas would have to displace coal generation.
If gas generation cuts coal generation from 40% to 30% of all electricity generated, the net carbon savings would be approximately 25 million tons per market share point or about 250 million tons. Whether reductions that size from gas displacing coal happen will depend significantly on the price of natural gas and policy. Right now, the trend is in the reverse direction, with coal displacing gas and increasing market share from 37% in 2012 to 40% in the first 4 months of 2013.
Yet, very recent softening of gas prices, the unexpected July announcement that 2,000 megawatts of coal capacity will close in the PJM power pool, after the capacity did not win a crucial competitive auction, and the 2015 implementation date of the Air Toxic rule are factors that suggest coal's market share resurgence will soon stop and that gas may resume displacing coal. Indeed, and this fact is crucially important, it is only natural gas that has and can rapidly displace large amounts of coal and oil and produce big carbon cuts in the next 5 years.
Aside from electricity generation, if the recent carbon increases are to stop and to reverse, further cuts in carbon emissions will likely come from displacing oil and from reducing transportation emissions. Emissions from oil have declined from 2.6 billion tons in 2005 to about 2.3 billion tons in 2012 or by about 300 million tons. Some of that decrease in oil carbon emissions was offset by increasing gas carbon emissions from the combustion of gas that displaced oil in electric generation, heating buildings, and industrial processes.
Over the next 5 years, efficiency and oil substitutes that include gas, biofuels, and electricity could be expected to reduce carbon emissions from oil. But another 300 million net decrease in oil carbon emissions will be far from easy. Indeed, to reach that number, it will take significant market penetration of natural gas and electricity powered vehicles and continued displacement of oil by gas in buildings and in industrial processes.
The resumption of economic growth since July 1, 2009 and the addition of 2 to 3 million people every year to the US population also challenge carbon reduction goals. More people mean more cars, appliances, and building space. If the incremental growth in the economy and population is supplied by zero-carbon fuel sources like efficiency or most renewable energy sources, the total carbon emissions do not grow. But they do not fall either.
The data are all pointing to 3 facts of energy life for the next 5 to 10 years. First, renewable energy and efficiency will do well to supply annual economic and population growth and to prevent energy related carbon emissions from rising beyond 5.5 billion tons. Second, the nation will be stressed to cut its energy related carbon emissions by approximately 650 million tons, from where it is today, to achieve an annual total of 4.8 billion tons by 2020. Third, natural gas displacing coal and oil will be essential, if US carbon emissions are to stop the recent rises, resume declining, and are to reach 4.8 billion tons or 20% below the 2005 levels.
Again, while the big increases in renewable energy can meet the incremental growth in energy demand with zero carbon emissions, only natural gas can displace large amounts of coal and oil and produce big declines in carbon emissions over the next 3 to 7 years.
To sum up, energy related carbon emissions declined 700 million tons from 2007 to 2012 but are likely to increase by 150 million tons in 2013-2014. In order to achieve a 20% reduction from peak levels, the US will have to cut emissions by an additional 500 million to 650 million tons. Natural gas is essential to doing so.