Industry Market Trends

What's Really Behind The Decline in American Carbon Dioxide Emissions?

Feb 08, 2013

Carbon 1Yes, the good news just keeps on coming. Environment360 reports that U.S. CO2 emissions have reached their lowest levels since 1994, crediting "renewable energy technologies, advances in energy efficiency, and the rapid shift from coal to natural gas for generating electricity" for the drop.

Suzanne Goldberg, the U.S. environment correspondent for British newspaper The Guardian, writes that "carbon dioxide emissions fell by 13 percent in the past five years, reaching levels last measured in 1994, because of new energy-saving technologies and a doubling in the take-up of renewable energy," citing a new report compiled by Bloomberg New Energy Finance for the Business Council for Sustainable Energy.

Indeed, the BCSE report itself notes that "renewable energy installations hit an all-time record with at least 17 GW of new nameplate capacity added in 2012." A total of $44 billion worth of renewable energy generation is currently installed. In April 2012, "electricity generation from natural gas equaled that from coal for the first time in U.S. history."

Natural gas. Remember that.

"Energy intensity" for commercial buildings in the United States is 40 percent lower today than it was in 1980, investments in smart grid topped $4 billion, and the study reports that "the cumulative installed solar, wind, geothermal, and biomass-based energy sources in the U.S. reached 86 gigawatts last year, compared with 43 gigawatts in 2008," the report finds.

Environment360 wants to credit the increasing use of hybrid and electric vehicles with contributing to the decrease, but let's be honest, with unleaded gasoline and catalytic converters today's cars are far, far less the smog-belching monsters your father's Oldsmobile was, and with only half a million Americans buying them, it's a drop in the bucket -- especially when you figure that much of the electricity to power the cars was produced by coal-powered plants.

Carbon 1

But we're here to rejoice that CO2 is way, way down without America subscribing to the fatally flawed Kyoto Protocol. That's good news for which we can thank natural gas and fracking. More on that later.

The Bloomberg report finds that thanks to fracking and the boom it's enabled in natural gas production, "America got 31 percent of its electricity from gas-fired power plants last year," according to The Guardian.

From 2006 to 2012, the Sierra Club says, "the U.S. has seen the largest reduction in carbon dioxide emissions of any country or region," citing to a recent report from the International Energy Agency, which states that over those six years, "U.S. CO2 emissions have fallen by 7.7 percent or 430 million metric tons, primarily due to a decrease in coal use."

Putting that figure in perspective, the IEA compared 430 million metric tons to "the annual greenhouse gas emissions from more than 84 million passenger vehicles or more than 53 million homes."

Again, a decrease in coal usage was credited with the impressive numbers. "Coal was responsible for 33 percent of U.S. electricity last month, down from 50 percent just 10 years ago," the Sierra Club noted, adding that "CO2 emissions from the average American are now at the same levels that they were in 1964."

Milder winters have also been credited with much of the reduction in CO2, in America and elsewhere. In Germany, according to the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, CO2 emissions have been reduced almost 27 percent from 1990, making Germany climate targets overachievers -- "for the period spanning 2008 to 2012 Germany committed to reducing emissions by 21 percent compared with 1990."

Alas, the world has not followed America's fine example. The IEA report also finds that global carbon-dioxide emissions from fossil-fuel combustion "reached a record high of 31.6 gigatonnes (Gt) in 2011, according to preliminary estimates," for "an increase of 1.0 Gt on 2010, or 3.2 percent." And while America's weaning itself off coal, other countries are burning it as fast as they can dig it out of the ground -- the IEA noted that coal accounted for 45 percent of total energy-related CO2 emissions in 2011.

Hi ho, hi ho... A decline in coal usage in favor of other fuel sources is a major contributor to U.S.'s falling carbon emissions.

China in particular has an insatiable thirst for coal, responsible for what the IEA called "the largest contribution to the global increase," with Chinese emissions rising by 720 million tonnes, 9.3 percent, "primarily due to higher coal consumption."

Again unfortunately, Europe isn't following America's lead in switching to natural gas either. According to The Economist, in addition to the cost of natural gas rising in Europe, due to  the European Union's complicated Emissions Trading Scheme, which financially penalizes CO2 emitters according to set rates, as of mid-2012 it was less than half as expensive to emit CO2 than it was in mid-2011. A rising cost of natural gas combined with a far lower penalty for CO2 emissions made coal an attractive energy source, and EU consumption increased accordingly.

In France and Germany it was actually more expensive to produce electricity with clean gas than utilities could sell the electricity for, whereas they could make a profit using coal. And in Britain, according to The Economist, between October 2011 and mid-2012, "Britain's electricity production from gas shrunk from 11 to seven terawatt hours, while coal-fired production rose from nine to 14 terawatt hours, according to the European Network of Transmission System Operators for Electricity."

To infinity, and beyond! Natural gas produces less carbon dioxide than coal.

Back to fracking. It's is a method of natural gas extraction which allows far more gas to be taken than has been otherwise possible. This means there's a whole lot more natural gas available, which means it's far cheaper than it has been in years -- today it costs about a quarter of what it did in 2008. This means it makes sense for people to switch from coal to natural gas, resulting in the lower CO2 emissions we all want.

But there's far more to fracking than simply reducing CO2. According to German news magazine Der Spiegel The International Energy Agency "estimates that the United States will replace Russia as the world's largest producer of natural gas in only two years. The Americans could also become the world's top petroleum producers by 2017."

And fracking works for oil as well as for natural gas. As Der Spiegel says, recently a huge new deposit of oil has been discovered in Utah, containing "an estimated 1.5 trillion barrels of extractable oil, or as much as the world's entire proven oil reserves to date." The technology needs to advance to make it economically feasible to extract, but few doubt that it will be.