Coal and natural gas were once joined at the hip, advocating for energy freedom and more development — and against stricter environmental laws. Now, the two have gone their separate ways as natural gas continues to eat away at coal’s once dominant market of the electricity portfolio.
The reasons are simple, ranging from the global focus on climate change to the discoveries of shale gas found deep underground — fundamentals that have raised natural gas’ profile from 20 percent of the electricity pie in 2008 to 40 percent today. Unfortunately for coal, it has nosedived from 50 percent to 19 percent. And it is not coming back.
“What you have seen is natural gas playing a very significant role in terms of reducing the overall greenhouse gas emissions — a 20 percent decline since 2005,” said Wayne Winegarden, director for innovation at Pacific Research Institute, at a web conference hosted by the U.S. Energy Association. “That puts the two of them at loggerheads. The tension grows, and it concerns their future economics.”
The United States wants to reduce greenhouse gas emissions by 50 percent by 2030 and be net zero by 2050. The Biden administration considers clean energy to be any facility that produces no carbon dioxide or can capture and bury carbon. That keeps natural gas in the fold — a fuel that releases about half the carbon emissions as coal.
However, policymakers now have natural gas in their sights.
Power plants are the largest source of harmful pollutants — something that produces 1.2 million tons of emissions annually and that causes adverse health effects totaling $80 billion a year, the Environmental Protection Agency said. Electricity production is responsible for 25 percent of the nation’s greenhouse gas emissions, second to transportation.
That’s why the EPA proposed in May to force nearly all coal and natural gas plants to cut or capture their dioxide emissions by 2038. If facilities can’t meet the goals, they must retire. The agency said its proposal will cut carbon pollution by 80 percent by 2040 compared to 2005.
But it is unreasonable to conflate coal and natural gas. This fuel will remain a staple of the economy, leading Jim Matheson, chief executive of the National Electric Cooperative Association, to call the rule-making “overly ambitious.”
Moreover, natural gas producers have cut methane emissions, which are 80 percent more potent than carbon dioxide. EPA reported that those emissions decreased by 23 percent between 1990 and 2018.
Decarbonizing society means electrifying nearly everything — or using considerably more renewables. But natural gas kicks in when the wind does not blow or the sun doesn’t shine. It must be an orderly transition.
Natural gas is also integral to home heating and U.S. manufacturing.
“Dry” gas generates power, and “wet” gas is separated from it and comprises chemicals such as butane, ethane, methane and propane, all of which can serve as the foundation for finished goods. Indeed, almost every consumer product comprises “natural gas liquids.”
“The U.S. is in the most enviable position in the world. We are serving our allies and displacing Russian gas in Europe while displacing coal in Asia” — the most crucial climate solution, said Richard Meyer, vice president of markets and analysis for the American Gas Association. “The gas here is also critical for domestic manufacturing, providing low-cost energy at home.”
The net-zero goal is paramount — but not promoting any specific fuel. While coal’s future role is limited, natural gas will remain relevant to producing electricity, serving the manufacturing sector, and backing up renewables.