Cleantech Market Intelligence
CO2 Emissions in the U.S. on the Rise Again
In his landmark climate change speech on June 25, President Obama noted that “our economy is 60% bigger than it was 20 years ago, while our carbon emissions are roughly back to where they were 20 years ago.” The United States is the second-largest emitter of CO2 in the world, after China; yet, with the exception of 2010, emissions have declined every year since 2007 – and in 2012, as Obama boasted, they were the lowest in the United States since 1994. The largest drop in emissions in 2012 was due in part to less coal generation and increased power generation from natural gas, which emits half as much CO2 as coal when burned with the same efficiency. The switch to natural gas by utilities was driven primarily by low natural gas prices, making coal power generators less competitive.
(Source: U.S. Energy Information Administration)
However, carbon emissions from coal-fired plants have increased by over 7% in the first 3 months of 2013 compared to the same period in 2012. According to the U.S. Energy Information Administration (EIA) the levels are projected to continue to increase, as natural gas prices have begun to go up – to an average of $4.04 per MMBtu in May 2013 – encouraging the use of more coal. EIA expects that coal-based generation will increase 8.7% over 2012, though it will not reach the peak levels of 5 to 10 years ago. Even with volatile natural gas prices, many utilities are likely to expand their reliance on gas in the coming years. For example, Dominion Power plans to significantly expand its use of gas at its Virginia utility – to as much as 40% of its total generation by 2017, from 25% in 2012.
CO2 emissions vary significantly from state to state. From 2009 to 2010, only 14 states experienced a decrease in emissions as the U.S. economy rebounded, fueling increased energy use in most states. With respect to energy-related emissions per person by state, Wyoming tallied the most emissions – primarily because of very cold winters – while the state of New York had the lowest per capita CO2 emissions in 2010, according to EIA. One reason is that a large portion of the state’s population lives in New York City metropolitan area where mass transit is widely used and most residences are multi-family units, providing efficiencies of scale in terms of energy for heating and cooling. In addition, the New York economy is mainly based on low-energy intensive activities, such as financial services.
U.S. utilities are mitigating the impact of coal-fired power through various energy efficiency measures, including demand response, and by shifting to renewables and natural gas. Obama’s renewed emphasis on reducing greenhouse gas emissions will help accelerate that process. Nevertheless, EIA projects that U.S. emissions will increase 2.6% in 2013 and 0.5% in 2014.