U.S. Carbon Dioxide Emissions Fall To Lowest Since 1991

Published January 2, 2017

Energy-related carbon dioxide emissions have fallen to their lowest level since 1991, thanks to natural gas and hydro power gaining a greater share of the U.S. electricity mix. According to the U.S. Energy Information Administration (EIA), emissions through the first six months of 2016 were the lowest in 25 years. Importantly, electricity prices declined by 2 percent compared to 2015 prices.

The EIA reports a 20-percent decline in coal-powered electricity generation during the first half of 2016 compared to 2015. Natural gas power, by contrast, rose 8 percent and hydropower rose 11 percent. Nuclear power rose by 1 percent.


Wind and solar power production rose during the first half of 2016 compared to 2015, but their increase was dwarfed by the increases in natural gas and hydropower production.

U.S. carbon dioxide emissions have steadily declined since 2008, when the fracking revolution dramatically and lowered natural gas prices. Low-priced natural gas can often outcompete coal on an economic front, while also cutting carbon dioxide emissions in half.

Before the fracking revolution, coal power stood alone in its ability to provide on-demand affordable energy. In 2008, coal powered approximately half of U.S. electricity. Natural gas has now overtaken coal, powering 33 percent of U.S. electricity in 2016, compared to 32 percent for coal. At the same time, electricity prices in inflation-adjusted dollars are lower now than they were in 2008.

The decline in natural gas prices solved a problem consumers faced when government began taking action to reduce carbon dioxide emissions. Many policymakers saw replacing coal power plants as the most effective means of reducing carbon dioxide emissions. Replacing coal power plants at the end of their shelf life with more expensive forms of power would reduce emissions but increase energy costs. Prematurely closing coal power plants before the end of their shelf life and prematurely building new power plants would add even more to consumer energy costs. This is especially the case when replacing coal power with wind and solar power because wind and solar power costs are so high.

Natural gas power plants, however, are relatively inexpensive to build, even in relation to coal power plants. The high electricity prices for wind and solar power are tied to the high manufacturing costs of wind and solar power equipment relative to the small amount of power they produce. For natural gas power, however, the commodity price of natural gas itself is a greater factor than up-front construction costs. With the cost of natural gas power now challenging and often dropping lower than coal, the premature closure of existing coal power plants has not driven a spike in electricity prices like would have been the case a decade ago. This would be a far different story if the fracking revolution had not occurred or if coal power plants were being replaced primarily by wind and solar power.

The lesson from all this is we have been presented with an unforeseen opportunity to simultaneously reduce electricity prices and reduce carbon dioxide emissions (as well as conventional air pollution). Coal power plants at the end of their shelf life can be replaced by lower-cost, lower-emitting natural gas power plants. At just a minimal cost, many existing coal power plants can be closed before the end of their shelf life and replaced with inexpensive natural gas power plants. As has been the case since 2008, electricity prices will fall and carbon dioxide emissions will decline. This is a win for everybody, regardless of one’s views of the asserted global warming crisis and regardless of one’s views on the primacy of economic living standards or environmental protection.

[Originally Published at Forbes]