U.S. carbon dioxide emissions for January-May are down six percent from 2011 to 2012. Headlines have highlighted the fact that emissions from January-March hit a twenty year low. What explains the shift?
That question has been the subject of intense debate. John Hanger argues that 77 percent of that decline can be attributed to the shift from coal to gas. The folks over at CO2Scorecard, looking at January-March data, put that number at a more modest 21 percent. These are drastically different figures. What number should we believe?
Part of the discrepancy comes from looking at different time periods. January-March emissions were affected more by the warm winter than April-May ones were. That makes sense because January-March is part of the winter. April-May emissions were affected more by rock bottom natural gas prices than January-March ones were. That makes sense because it was April-May when rock bottom (i.e. sub-two-dollars wellhead) natural gas prices prevailed.
Let’s focus on the full January-May span, since it’s now the longest period for which we have 2011 and 2012 data, and do the analysis for ourselves.
First the basics: Carbon dioxide emissions fell from 2,303 metric tons (Mt) in 2011 to 2,158 Mt in 2012, a drop of 145 Mt. (To keep things simple, the January-May time period is implicit in all this.) The basic story is that emissions from coal consumption plummeted by 132 Mt. Falling oil emissions chipped in another 18 Mt. Natural gas emissions were nearly flat; they were actually down 5 Mt. This would seem to suggest that natural gas played little role in falling emissions. Instead, it appears to suggest, reduced demand for coal is what did the trick. This’s roughly the intuition behind the conclusion from CO2Scorecard that natural gas has played a modest role in the U.S. emissions decline.
Hanger contests this by making three basic points. First, he notes, “about 85% (132 of 144 million tons) of the 2012 U.S. Carbon emission decline is a product of falling emissions from coal.” Second, he argues, the decline in emissions from coal are “almost entirely as a result of more gas displacing coal generation this year. Indeed, coal’s electricity generation market share fell from 42% for all of 2011 to 32% in April and 34% in May.” Third, he observes, “Electricity demand is down 2% in the first 5 months of 2012 compared to 2011 so that is a small reason for declining emissions and probably explains about 10% of the 132 million ton decline of coal emissions.” Hanger puts these together with a few other estimates to come to his conclusion that 77 percent of the emissions decline is due to gas.
I’m skeptical. Hanger seems to have focused too much on the power sector. Only 59 percent of the decline in CO2 emissions from 2011 to 2012 came from the power sector.That said, I’m largely with Hanger in his analysis of what happened there. Coal generation plummeted and was replaced almost entirely with natural gas. Renewable energy generation was down slightly, nuclear was flat, and total electricity consumption fell only 1.8 percent, undermining claims that a warm winter is what pushed carbon dioxide emissions down. If you assume that the entire 1.8 percent decline in demand came at the expense of coal, and spread that evenly over all coal plants, you can estimate that 12 Mt of the emissions reduction came from lower electricity demand. To be certain, that’s probably an underestimate, since the least efficient (i.e. most polluting) plants are the most likely to shut down. Let’s say that 15 Mt of the emissions decline came from reduced electricity demand. That’s the same a Hanger’s number even though we’ve taken a slightly different route to get there. The rest – about 70 Mt – should have come from substitution of natural gas for coal.
What about the other 41 percent – 60 Mt – of the emissions drop?
A sharp decline in residual fuel oil consumption in the transport sector (basically in ships) kicks in 12 Mt. This mostly transpired during 2011. Someone more knowledgeable than me will surely have a decent guess of what explains the shift. It isn’t a shift to natural gas, which was flat in the sector.
But the biggest source of emissions reductions from outside the power sector – fully 42 Mt – comes from a drop in direct residential (31 Mt) and commercial (11 Mt) natural gas use. You read that right: it is a reduction in natural gas use, not an increase, that explains much of the decline in U.S. carbon dioxide emissions. This is almost entirely a story about reduced heating need, since most of the drop came in the first three months of the year.
So let’s tally things up. Natural gas cut U.S. carbon dioxide emissions by somewhere around 70 Mt between January-May 2011 and January-May 2012. This means that you can chalk up about half of the drop in U.S. emissions to abundant natural gas. Quantitatively, this conclusion lies somewhere between CO2Scorecard and John Hanger. More fundamentally, it’s closer to the CO2Scorecard numbers, which look beyond the power sector too. My numbers for the contribution of natural gas are higher than theirs because I’m looking at a longer time period and because I think that they substantially overestimate how much natural gas has already displaced nuclear and renewables.
I want to leave you with one more quick estimate that I find illuminating. The mini-war over how much of the recent decline in U.S. emissions could be attributed to natural gas was sparked by headlines claiming that U.S. emissions had dropped to a twenty year low. A drop due to a warm winter, people correctly pointed out, would be transient, and hence made for a poor comparison. So let’s factor that out: had the winter of 2012 been similar to that of 2011, U.S. emissions would presumably have been between around 65 and 75 Mt higher, or somewhere around 2,225-2,230 Mt. (I’ve given a range because I have no idea whether to associate the drop in demand from ships to the warm winter.) The last time emissions were below that level was
1993 1994. Instead of a twenty year record, we’d have a ten year one. Still, that’s not too shabby. The upshot is that we’d still be close to a twenty year low even without the warm winter.