The shale gas boom in the United States has spurred utilities to switch power generation from coal to less expensive and cleaner natural gas. As a result, coal generation has fallen 14% off its average between 2000-2009.1 While estimates vary, evidence suggests the U.S. has sufficient natural gas resources to meet its needs for decades to come.2 As a result, the Energy Information Administration (EIA) now estimates that coal generation capacity will fall from 318 GW to 278 GW by 2040.3 Nevertheless, substantial coal capacity could remain online, so federal policy should be designed to ensure a continued move towards natural gas and the benefits it provides.
A single GWh of natural gas generation emits roughly 55% less CO2 than a GWh of coal generation.4 Also, natural gas emits no mercury, whereas coal is the highest mercury emitting generation technology.5 In addition to the cost savings6 and public health benefits of switching away from coal, natural gas has created thousands of direct high-paying jobs and raised land values in many economically depressed regions of the country.7 It has even reduced carbon emissions enough that the U.S. is now compliant with the Kyoto Protocol targets.8
Despite its low cost and environmental benefits, market-led conversions to natural gas may be nearing their end.9 Though there is ample supply, analysts predict the price of natural gas will increase, reducing its economic advantage over coal.10 And demand may plateau, as the least efficient coal plants are all shuttered and the remaining coal fleet continues servicing customers.
Government action could change that. If new EPA power plant standards are put into place, 733,000 GWh could switch from coal to natural gas.11 This would eliminate approximately 367 megatons of greenhouse gas emissions every year.12 This is like removing about 23% of the coal plants in the U.S.13 It would further remove roughly 96,000 tons of SO2, 68,000 tons of NOx, 1.29 tons of mercury, and 14,000 tons of particulate matter.14
To sustain the trend of fuel switching, the federal government should implement measured policies that set standards and assist industry in its adjustment and compliance to the new rules.