Natural Gas Takes the Lead Over Coal in Electricity Generation

Natural Gas Takes the Lead Over Coal in Electricity Generation

For the first time in history, natural gas has surpassed coal as the primary source of electric power generation in the United States. According to the research company SNL Energy, recent reports from the U.S. Energy Information Administration (EIA) show that natural gas powered 31 percent of electricity generation in April 2015, compared to coal’s 30 percent. Just five years ago, the numbers told a different story: Coal was responsible for 44 percent of power generation and natural gas generated only 22 percent.

Why the Shift?

The role reversal for these two fuel sources has been years in the making. Low natural gas prices, which are now roughly a third of what they were 10 years ago, have given gas the push needed to take the lead. Additionally, the EPA’s Clean Power Plan has contributed to coal’s recent decline as the primary source of power in this country. Coal is a dirty fuel source that is responsible for 75 percent of U.S. carbon emissions, and the cooling of plants run by coal requires four times more water than plants powered by natural gas. With the new stringent environmental restrictions set forth by the EPA, the coal industry is expected to continue its decline by phasing out plants that cannot meet governmental requirements for greenhouse gas emissions.

What Does the Future Hold?

The EIA estimates that coal production will decline by 7.5 percent this year and continue on that path. The number of coal-fired power plants in this country continues to dwindle, and many of the remaining ones now run less frequently, generating approximately 42 percent of their capacity. Meanwhile, The U.S. is now the top oil and gas producer in the world, largely due to the advance of responsible hydraulic fracturing driving down prices. Coal is a relic of the industrial age, and it appears that the U.S. is ready to move forward by embracing a cleaner, more cost-effective energy source.


JHP: Leaders in Oil and Gas Exploration and Production

Regulatory and economic issues make natural gas the preferred source of fuel for electric power generation. At John Henry Petroleum, we make it a priority to stay ahead of the curve when it comes to emerging global energy trends. To learn more about exciting new developments in oil and gas, including investment opportunities, contact us at our Plano, Texas office today.