Free Markets, Free People

The most underreported energy related story?

Did most of you know about this?

The U.S. Energy Information Administration’s (EIA) June energy report says that energy-related carbon dioxide fell to 5,473 million metric tons (MMT) in 2011.

That’s down from a high of 6,020 MMT in 2007, and only a little above 1995′s level of 5,314 MMT.

Better yet, emissions in the first quarter of 2012 fell at an even faster rate — down 7.5% from the first quarter of 2011 and 8.5% from the same time in 2010. If the rest of 2012 follows its first-quarter trend, we may see total energy-related carbon dioxide emissions drop to early-1990s levels.

Wow.  Victory for the enviro crowd, yes?  Regulation has succeeded, right?  The government has turned the tide?

Nope.  In fact it has nothing to do with the enviro crowd, government or regulation.

Two dirty words: Hydraulic fracking.  Two more for good measure: Natural gas.  And the dirtiest word of all: Markets.

Those three have combined, via a price point that has stimulated demand and made the conversion of coal plants economical to drive down emissions as they produce electricity more cheaply and efficiently.  This trend began in 2007 and is now having a real effect:

Increasingly, power plants are turning to natural gas because it has become abundant, and therefore cheap. And though technology is improving our ability to reduce emissions from coal usage, natural gas is still a much cleaner source.

Natural gas, given the extensive finds and the exploitation, is much cheaper than coal now.  In fact:

Indeed, natural gas has just passed an important milestone. As noted by John Hanger, energy expert and former secretary of the Pennsylvania Department of Environmental Protection: "As of April, gas tied coal at 32% of the electric power generation market, nearly ending coal’s 100-year reign on top of electricity markets."

That’s how it works in markets, or is supposed too.  The fact that emissions are down is an actual side benefit of the process.  And it is a process that has managed to work despite government and environmental groups like the Sierra Club’s interference or attempted interference in the process (the Sierra Club has declared war on natural gas and fracking after accepting millions in previous years from the natural gas industry). 

It is a part of the creative destruction of the capitalist process.  Coal will still have its uses, but just as it was replaced as a primary fuel for heating homes last century, it is now being replaced as a primary fuel for generating electricity for the same reason – there is a cheaper and more efficient fuel (which also happens to have fewer emissions) that is easier to produce and deliver than coal. 

At some point coal producers will either have to reinvent themselves or find something else to do.  And on the other side, opportunities will expand within the natural gas industry as more and more demand builds.

But shhhhh.  Don’t want anyone knowing this all happened because of markets.  Why that would hurt the argument that it requires government intrusion, regulation and the pressure of environmental groups to make things like this happen.

Can’t have that.

Forward.

~McQ

Twitter: @McQandO

38 Responses to The most underreported energy related story?

  • OK, McQ.  I take the point that net “dirty stuff” has resulted from the increased use of natgas.
    I don’t see the chemistry to support the notion that burning natural gas for electrical generation gives you net reduction in CO2 over burning coal.
    Could be true.  Dunno.  I’d have to see something on the chemistry.
    Still…YAAAA, us…!!!

    • Here’s something.  

      http://www.naturalgas.org/environment/naturalgas.asp

      In addition to the chemistry the engineering and physics favor natural gas.

      ” Natural gas-fired combined-cycle generation units can be up to 60 percent energy efficient, whereas coal and oil generation units are typically only 30 to 35 percent efficient”

  • In an alternative universe, where a bunch of restrictive cap-and-trade garbage was passed, the lefty greens are taking credit for a decrease in CO2 emissions, claiming that it only happened because of their wonderful legislation. And telling the peons that the tons of money collected for government, and the onerous regulations that came along for the ride, are all worth it because of the decrease.

    I’ve often wondered about something, though. Do leftists set out with the intent of doing meaningless, ineffective, counter-productive, or symbolic things, knowing their stuff isn’t really going to make things better, and then just expect things to get better for other reasons so they can take the credit? Or to they actually think their one-step-from-voodoo nostrums that always expand government really are going to have great results?

    Varies by case and by individual collectivist, I suppose. The stupid ones are probably in the second category.

  • But you forget one thing: Raising the level of conscience to the risks of  CO2 in the business community.  Only the ultra-conservatives are climate change deniers.

    • Too bad you don’t understand it either.
      There are few “climate change deniers.”  Most are “climate change skeptics,” which means they believe in “climate change” but don’t think man’s contribution is that big of a deal.  You could rightly call the “CO2 deniers.”

    • The “risks of CO2.”  Do you happen to realize you are a carbon based life form?  Do you happen to realize that without CO2, you would not be here?  Do you have any clue at all when you write the crap you do?  I think you do not.  in fact, I think you stop by here, throw you crap comments into the mix like any other troll would, and then retreat back into your Mom’s basement, where you live, like the good little high school junior you are.  Next time, get you Mom’s permission to play with the computer!!!

    • The change to natural gas was due to cost savings, s&$-for-brains.
      The “denial” here is your own river in Egypt.

  • Only the ultra-conservatives critical thinkers are climate change deniers skeptics.
    OR, if the stinking “strike-thru” thingy doesn’t work…again…
    Only green religionists believe in AGW.

  • ” Raising the level of conscience to the risks of  CO2 in the business community.”

    I am assuming you mean the power generating community. The ‘business’ community doesn’t know or care what happens on the other side of the socket.

    The power generating community is going to natural gas for the reasons McQ stated; economics. And the economic effect of regulation. Any claim of “We’re doing it for the environment” is pure PR based on serendipity. It is somewhat gratifying, however, to see you claim that those greedy, Republican Capitalists have a conscience.
    http://www.naturalgas.org/environment/naturalgas.asp 

    • Just in case tad is actually reading, here’s somthing most people can relate to: hotel towels and linenAnyone that’s been to a hotel knows that at some point in the last few decades they’ve all become environmetally conscious, encouranging the reuse of towels and sheets to save water. Anyone that stops to think about it for a minute knows that they’re really just saving money on water and labor.

      • “here’s somthing most people can relate to: hotel towels and linen”
         
        Hotels? You stay in hotels? Obviously you are in the 1%. The rest of us normal folks in the 99% sleep in the mud.

  • Let’s put on the AGW hat and see what they would think …
    No signatory to the Kyoto Accords has done this much to meet either Kyoto or the Copenhagen Accords.  Read that again.
    … but while the US reduces CO2 production, the weather is so hot.  It must be China’s fault.

  • Aren’t the major complaints regarding fracking related to groundwater contamination and the potential effects of the proprietary (read: unknown to the public) chemicals used in the the process?

    It as my understanding that from a greenhouse gas perspective, natural gas was greatly preferred over coal with respect to it’s potential AGW impact, and that was my understanding why the Sierra Club had historically supported natural gas, and only changed it’s position when it came to the potential impacts of fracking.

    • Aren’t the major complaints regarding fracking related to…

      Complete, unmitigated BULLSHIT.
      Why, yes.  Yes, they are.
      Gawd, you are stupid.

    • You are aware that in most cases they’re fracking WAAAAAAAAAAYYYYYYYYYYYYYYYY (is that enough extra letters?) below where the ‘ground water’ lives?
       
      Know much about personal water wells Cap?  I can tell you, they don’t set up multimillion dollar drilling rigs on site for a couple months to go down 20 to 600 feet.   Your average natural gas well is down almost 6000 feet.  Mom and Pop on the farm ain’t takin their bath with water from 6000 feet.
       
      EVER in your life seen someone have a personal water well dug with a multi million dollar rig with five or more full time crew members.  STOP for a minute and think of the economics for drilling before you answer that.
       
      I’ve seen at least 6 wells dug for water, how bout you?  Or is it easier to take the word of people who are probably sitting in apartments on the lower east side of New York talking about how bad the water tastes in places they’ve never even seen as a result of a drilling method they know ONE word about (fracking).

    • Back when we wuz farmin, we used to dig wells by hand, all the way down to oh, 20, 30 feet!   How much natural gas do you think they take from that depth?
       
      Ah, the US education system, where critical thinking isn’t necessary at all because someone else is doing most of the real work in life.

      • Actually, Looker, there have always been gas and oil “seeps” at the surface.  It is one of the things that lead to early oil and gas drilling in Pennsylvania and California.
        But productive oil and gas horizons now are separated from the water-bearing horizons by thousands of feet.
        If a well is badly cased and cemented…regardless of it EVER being fracked…it COULD effect a water-bearing horizon.
        The chemicals used in hot oil treating of wells are A LOT more prone to contaminate water, but that also almost never happens.
        It is ALLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL bullshit.

        • The point I was making specifically refers to the fracked ones that they ‘insane’ nature crowd has latched on to and claiming the ground water is being despoiled by them.  Plenty of us like nature just fine without thinking man and all his works need to be obliterated.
           
          Hell, we’ve been using (not me personally :)  ) Bitumen since we were clever enough to throw sharp rock tipped sticks at animals, and I’ll bet the ground water in places like that might just taste and be a little more than on the funky side, but drilling and fracking didn’t cause it.
           

  • What about the economy?
    Recessions and slumps mean less demand for energy, and naturally less CO2, ceteris paribus.
    (It’d be interesting to see emissions:GDP ratio, or a correction against both fuel and electric consumption to winkle that effect out.)

    • From what I have read, there is fairly conclusive evidence that the reduction in Co2 emissions can be empirically related to replacement of other fuels with natural gas. Energy use relative to Co2 emissions are down, and thought there could be tiny differences related to other practices, the main variable differention is the use of natural gas over coal.

      • From what I have read, there is fairly conclusive evidence that the reduction in Co2 emissions can be empirically related to replacement of other fuels with natural gas.

        Yes, that’s right. You win a cookie (as Don Rickels points out to the clueless).
        It’s the same pattern in which coal replaced wood in the late middle ages, then kerosene replaced whale oil, and on an on.
        Are you really this clueless and uneducated (or, public school “educated”) or are you just trying to stimulate conversation? You know, you really come off as an over-indulged junior high student this way.
         

        • Wow Sharpie, I was replying to a posters question as to whether the Co2 emission reduction could be related to a reduction in general energy consumption reduction as opposed to the assertion that it is the result of a shift from coal to natural gas, and telling him no, it’s not a reduction in consumption it IS the result of the shift to natural gas.

          “Are you really this clueless and uneducated (or, public school “educated”) or are you just trying to stimulate conversation? You know, you really come off as an over-indulged junior high student this way”

          None of the above, I was doing what we all do, responding to what someone wrote.

          Did it confuse you because I didn’t call him names?

      • I doubt if that has been the largest factor, the largest factor is that economic activity in the world has not recovered from what it was five years ago.  Less activity = less pollution.

  • That natural gas boom? We didn’t build that

  • This kind of story is always under reported in the main stream media. It doesn’t fit the narrative of “man causes global warming disaster”.

  • No no – we’re all crazy – Natural Gas….meh
     
    THIS is where we should be investing our hard earned capital -
    http://www.lvrj.com/business/amonix-closes-north-las-vegas-solar-plant-after-14-months-heavy-federal-subsidies-162901626.html

  • In a completely inexplicable development, American coal is heading to Europe.

    • Briefly mentioned in that story is that Europe gets most of its natural gas from Russia. I wonder how much of their NG expense is directly tied cost of production and transportation vs. the cost of dealing with Putin’s government (price control and supply insurance).