The economic downturn effect on U.S. carbon emissions

From the Harvard School of Engineering and Applied Sciences

Reduction in U.S. carbon emissions attributed to cheaper natural gas

Lower emission from power plants in 2009 was driven by competitive pricing of natural gas versus coal

2009 carbon emissions by region

Changes in carbon dioxide emissions from the power sector in the nine census regions of the contiguous United States, 2008-2009. Image courtesy of Xi Lu.

 

Cambridge, Mass. – February 27, 2012 – In 2009, when the United States fell into economic recession, greenhouse gas emissions also fell, by 6.59 percent relative to 2008.

In the power sector, however, the recession was not the main cause.

Researchers at the Harvard School of Engineering and Applied Sciences (SEAS) have shown that the primary explanation for the reduction in CO2 emissions from power generation that year was that a decrease in the price of natural gas reduced the industry’s reliance on coal.

According to their econometric model, emissions could be cut further by the introduction of a carbon tax, with negligible impact on the price of electricity for consumers.

A regional analysis, assessing the long-term implications for energy investment and policy, appears in the journal Environmental Science and Technology.

In the United States, the power sector is responsible for 40 percent of all carbon emissions. In 2009, CO2 emissions from power generation dropped by 8.76 percent. The researchers attribute that change to the new abundance of cheap natural gas.

“Generating 1 kilowatt-hour of electricity from coal releases twice as much CO2 to the atmosphere as generating the same amount from natural gas, so a slight shift in the relative prices of coal and natural gas can result in a sharp drop in carbon emissions,” explains Michael B. McElroy, Gilbert Butler Professor of Environmental Studies at SEAS, who led the study.

“That’s what we saw in 2009,” he says, “and we may well see it again.”

Patterns of electricity generation, use, and pricing vary widely across the United States. In parts of the Midwest, for instance, almost half of the available power plants (by capacity) were built to process coal. Electricity production can only switch over to natural gas to the extent that gas-fired plants are available to meet the demand. By contrast, the Pacific states and New England barely rely on coal, so price differences there might make less of an impact.

To account for the many variables, McElroy and his colleagues at SEAS developed a model that considers nine regions separately.

Their model identifies the relationship between the cost of electricity generation from coal and gas and the fraction of electricity generated from coal.

“When the natural gas prices are high, as they were 4 years ago, if the gas prices come down a little bit, it doesn’t make any difference,” explains lead author Xi Lu, a postdoctoral associate at SEAS. “But there’s a critical price level where the gas systems become more cost-effective than the oldest coal-fired systems.

“If the gas price continues to drop, you’ll continue to go down this curve so that you’ll knock out not just the really ancient coal-fired power plants, but maybe some of the more recent coal-fired plants.”

The model also predicts that a government-imposed carbon tax on emissions from power generation would drive a move away from coal.

“With a relatively modest carbon tax—about $5 per ton of CO2—you could save 31 million tons of CO2 in the United States, and that would change the price of electricity by a barely noticeable amount,” says McElroy.

The initial model was developed by Jackson Salovaara ’11, an applied mathematics concentrator at SEAS. His work was recognized as the “best senior thesis” in the Harvard Environmental Economics Program, earning him the Stone Prize in May 2011.

Since then, the model has been “souped up,” incorporating more sophisticated regional data analysis, and producing not just the findings on 2009 but also predictions for more recent years.

“While the data from 2011 are not yet available, based on the gas prices, we’re making a confident prediction that there should be a continued shift from coal to natural gas in 2011 as compared to 2008,” says McElroy.

“That’s good news for the atmosphere.”

###

This research was supported by the National Science Foundation.

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45 thoughts on “The economic downturn effect on U.S. carbon emissions

  1. So – a question: if “the Pacific states and New England barely rely on coal” and their emissions dropped 5.4 and 12.1% – what is driving the reduction in those states – and how is it demonstrated that those same factors don’t apply in coal-powered regions?

    In addition – if the CO2 has been reduced due to switching- has that been revealed in the Mauna Loa data?

  2. 28 Feb: Bloomberg: Mark Drajem: EPA Plans to Keep Carbno (sic) Rules Limited to Top Polluters
    The proposal, posted on the agency’s website on Feb. 24 without notification, would maintain standards established in 2010 for new or revamped plants…
    The plan was posted by the agency as the U.S. Court of Appeals in Washington plans to start hearing arguments tomorrow from states and industries arguing in part that the EPA’s so- called tailoring rule, which limits the businesses covered by its standards, violates the law.
    “This weakens the argument that there is an inexorable push from EPA to regulate every hot dog stand in the country,” David Doniger, policy director for climate at the Natural Resources Defense Council in Washington, said in an interview…
    The EPA is advancing plans to regulate carbon emissions after Congress failed to pass climate-change legislation…
    Those regulations are overdue.

    http://www.bloomberg.com/news/2012-02-27/epa-proposes-keeping-carbon-regulation-limited-to-top-polluters.html

  3. According to their econometric model, emissions could be cut further by the introduction of a carbon tax, with negligible impact on the price of electricity for consumers………………
    ===============================================
    …and the first stimulus worked

  4. 7 Feb: Montreal Gazette: Lynn Moore: Quebec to kick in $24 million to help companies determine carbon content of products
    The pilot project — described as the first of its kind in North America — will focus first on selecting a certification program to measure total carbon dioxide emissions for the life cycle of products and services….
    The companies participating in the project are Bell, Rio Tinto Alcan, Alcoa, Aluminerie Alouette, Interplast, Fibrek, Aliments Ultima, Enerkem, Laboratoire M2 and Chantiers Chibougamau.

    http://www.montrealgazette.com/business/Quebec+kick+million+help+companies+determine+carbon+content+products/6216991/story.html

    27 Feb: Business Week: Ewa Krukowska: Carbon Market May Be Too Focused on Short-Term, Delbeke Says
    Investors in the European Union emissions trading system may be overconcentrating on the short- term perspective, said Jos Delbeke, director general for climate at the European Commission. He made the comments at a conference organized by Eurelectric in Brussels today…
    On short-term focus in the market:
    “Perhaps there’s overconcentration on the next 3-6-12-15 months. The question for policy makers is what’s beyond those months. That’s why we’re monitoring the situation and we’re not following in line immediately with those who say we intervene in the market. We’re very much cautious about the fact how we will see the impact of many different dilemmas: there’s the recession, we see a massive redesign of the industrial sector worldwide. Once we’re going out of the recession, what is going to stay in terms of emission patterns?”…

    http://www.businessweek.com/news/2012-02-27/carbon-market-may-be-too-focused-on-short-term-delbeke-says.html

    27 Feb: Reuters: China’s Duan to chair UN carbon executive board
    Maosheng Duan of China was on Monday named chairman of the executive board for the Clean Development Mechanism, becoming the first person from the world’s top polluter to oversee the UN-backed carbon market for developing nations.
    Duan succeeds Britain’s Martin Hession, who will now serve as vice-chair of the CDM executive board, said the United Nations Framework Convention on Climate Change (UNFCCC) in a statement from Bonn. Both positions run through early next year…
    At the same time, demand for the carbon credits has suffered because of a debt crisis in the European Union, the biggest buyer of CERs.
    Benchmark CERs were trading just over 5 euros a tonne on Monday.

    http://af.reuters.com/article/energyOilNews/idAFL5E8DRA1C20120227

  5. 27 Feb: Eastern Daily Press: UK base for Global Carbon Project at UEA
    The Global Carbon Project provides scientific data to both policy-makers and the public on the latest trends in CO2 emissions around the world. It already has offices in Australia, Japan, France, US, China and South Korea but is set to add another at the University of East Anglia.
    Its UK office is located at the UEA-led Tyndall Centre for Climate Change Research and funded by the Natural Environment Research Council…
    Corinne Le Quéré, co-chair of the Global Carbon Project and Tyndall Centre director, said: “Without accurate, up-to-date information, policy-makers lack the tools to plan effective future strategy in this vitally important field. Establishing the Global Carbon Project’s first UK office is a significant step in improving the quality of the data and reducing uncertainty in the science.”
    The new office at UEA will pave the way for an International Carbon Office that would compile, analyse, report and archive global CO2 statistics, and monitor CO2 “sinks”.

    http://www.edp24.co.uk/news/education/uk_base_for_global_carbon_project_at_uea_1_1221226

    reminder:

    Archant Board: Richard Jewson, Chairman
    He is HM Lord Lieutenant of Norfolk and also Chairs the Council for the University of East Anglia.
    Richard chairs the remuneration and nominations committees

    http://www.archant.co.uk/about_board.aspx

  6. This report proves that market forces are causing substantial CO2 emissions reductions. It follows that there is no need whatsoever for CO2 mitigation or taxes thereon.
    Aside from the facts that there is no measurable benefit to be obtained from further emission reductions and that carbon taxes will ruin the economy, what else is there to do but observe the ongoing reduction of CO2 emissions?

  7. Sincehuman CO2 reduction in the USA had reached the levels of the mid 1990s emissions, by the later half of the 2000 decade, did this further reduction in human CO2 emission, by switching to Natural Gas further reduce the emissions and let the USA meet the 1990 Kyoto targets?

    It must be very close to doing so, making the USA, a Treaty non participant, the only large country to actually meet the Kyoto targets.

    We know the 1990 target levels were carefully rigged to show full East Bloc emissions, rather then the large reduction that came on the collapsing East bloc economies ,and the closure of lots of very dirty, uneconomic, Communist facilities This was done to give Europe a leg up on meeting the targets, without having to do much ,or even anything, to achieve them.

    Of course it is all academic an academic exercise, since the accounting is totally lopsided ,merely including human emnissions, and not the natural emissions and absorbtion by Nature that consists of 97% of the world flux while man only contributes a tiny 2-3% of the annual flux, either way.

    North American Flora consumes more than 100% of what North American Man and Nature comvined emits, so it is a NET CO2 Sink; and actually absorbs a considerable amount from Eurasia

  8. Since human CO2 reduction in the USA had reached the levels of the mid 1990s emissions, by the later half of the 2000 decade, did this further reduction in human CO2 emission, by switching to Natural Gas further reduce the emissions and let the USA meet the 1990 Kyoto targets?

    It must be very close to doing so, making the USA, a Treaty non participant, the only large country to actually meet the Kyoto targets.

    We know the 1990 target levels were carefully rigged to show full East Bloc emissions, rather then the large reduction that came on the collapsing East bloc economies, and the closure of lots of very dirty, uneconomic, Communist facilities This was done to give Europe a leg up on meeting the targets, without having to do much, or even anything, to achieve them.

    Of course it is all academic; an academic exercise, since the accounting is totally lopsided, merely including human emissions, and not the natural emissions and absorbtion by Nature that consists of 97% of the world flux, while man only contributes a tiny 2-3% of the annual flux, either way.

    North American Flora consumes more than 100% of what North American Man and Nature combined emits, so it is a NET CO2 Sink; and actually absorbs a considerable amount from Eurasia too.

  9. We don’t need a carbon tax. We need a Federal Government that gets out of the way of developing our natural resources. The data presented here shows the economy is naturally moving away from coal and towards natural gas, why do they presume that process won’t continue on it’s own?

    Natural gas power plants have many advantages over coal, such as being relatively quick to bring online when demand ramps up. Coal and nuclear can’t as quickly be brought online and taken offline when demand fluctuates. Solar and wind are unreliable and need not even be discussed in this context.

  10. “This research was supported by the National Science Foundation”
    ——-
    So I already Paid for this stupid study with my taxes, that’s proposing to add another f$%#ing tax on my back, and if I want the privelidge of reading it I have to pay for it (paywalled)!
    /rant

    Q: How hid you get interested in the climate change hoax?
    A: I opened my wallet one day and there it was.

  11. Tell me again why are carbon (sic) emissions a problem?

    As there is no demonstrable problem why should they be taxed?

    Is this a welcome to the ‘fur lined mousetrap’?

  12. From the article: ““Generating 1 kilowatt-hour of electricity from coal releases twice as much CO2 to the atmosphere as generating the same amount from natural gas, so a slight shift in the relative prices of coal and natural gas can result in a sharp drop in carbon emissions,” explains Michael B. McElroy, Gilbert Butler Professor of Environmental Studies at SEAS, who led the study.”
    ————————————————————–
    This shows the Professor doesn’t understand the electric power generation industry. To a great extent, coal fired plants and nukes provide the base load and natural gas plants fill in the peaks. This is because coal is the cheapest fuel and coal burners cannot be throttled up and down and remain efficient, whereas gas burners can efficiently and rapidly respond to load changes. Also, 20% of US electricity is from nuclear plants and these have been increasing power output in recent years. For example, US nukes generated 799 billion KWh in 2009 and 807 billion KWh in 2010. This 8 billion KWh reduced CO2 emissions by about 10 million tons compared to coal. I don’t see any reference to this increase in nuke power in the Harvard document.

    Including indirect emissions, such as the diesel engines in mining and transportation equipment, coal fired plants emit 1.3 kg CO2 per KWh, natural gas burners emit 0.7 kg CO2 per KWh, and nukes emit .02 Kg/KWh. Put into perspective, a typical coal burning power plant produces about 20,000 tons CO2 per day.

    And in response to future posters decrying the safety of nuclear power I point out there were zero injuries or fatalities related to radiation around the Fukushima nuke power plants. Of the 16,000 deaths from the earthquake and tsunami, there were two power plant workers drowned and one crushed, and one heart attack a few days later in a cleanup worker. Future cancer cases? Probably a negative number; here’s a reference on that health issue: http://www.21stcenturysciencetech.com/articles/nuclear.html?LNT%20Myth

  13. Stas Peterson says:
    February 27, 2012 at 1:38 pm
    “North American Flora consumes more than 100% of what North American Man and Nature combined emits, so it is a NET CO2 Sink; and actually absorbs a considerable amount from Eurasia too.”

    My comment> Most of the increase in CO2 absorption is due to the shift to low or no till farming practices and the extensive landscaping in suburban neighborhoods, that seems to be unique to the USA. In other areas of the world urban concentration of peoples results in the total destruction of the plants that sheep and goats can browse on, with in a days walk of the local villages.

    In the USA this adaption of suburban Lifestyle changes has enhanced the viability of the local environment in regard to local biodiversity of both flora and fauna, because of the direct expenditure of some of the household income on supporting the plant life abundance and diversity by landscaping for the natural augment it gives to health and positive climate enhancement as the plant density increases instead of being destroyed by over grazing.

    Just my 2 cents as an organic gardener.

  14. Dan in California says:
    February 27, 2012 at 1:59 pm

    This shows the Professor doesn’t understand the electric power generation industry. To a great extent, coal fired plants and nukes provide the base load and natural gas plants fill in the peaks. This is because coal is the cheapest fuel and coal burners cannot be throttled up and down and remain efficient, whereas gas burners can efficiently and rapidly respond to load changes.
    ==============================================================

    Thank you Dan…… I believe the increase use of gas was to backup the increase in renewables.

  15. Yeah but ….when you have shipped all your nice clean manufacturing to smoky China …. Maybe the decline in CO2 is being hidden. Hiding-the-decline seems to apply to both ends of the climate science spectrum.

  16. So. A miserable life(major recession-no jobs, no money) leads to glorious CO2 reductions. Is if just me, or am I missing something here?

  17. A model created by a Collage senior in an Environmental Economics Program? I am dubious to say the least. If the kid had the brains to do this he’d be making big splashes in more valuable area of math and be wasting his time in the bogus field of Environmental Economics.

  18. If men reduce their CO2 emissions, then Mother Nature who is in charge of 96% of ~CO2 emissions only has to nudge her output up a 1/24 th. smidgin to keep levels going on up just as she wants them and as the Mauna Loa record shows!

  19. According to their econometric model, emissions could be cut further by the introduction of a carbon tax, with negligible impact on the price of electricity for consumers. “With a relatively modest carbon tax—about $5 per ton of CO2—you could save 31 million tons of CO2 in the United States, and that would change the price of electricity by a barely noticeable amount,” says McElroy.

    Oh, so this is a public policy paper not a scientific research project. Seems to me that the institution should be renamed the Harvard School of EcoEngineering and Applied Political Science (SEAPS).

  20. Natural gas should be used because it’s inexpensive. As for CO2, its output should be maximized. I suggest a negative Carbon tax.

  21. Start building natural gas and LPG powered vehicles.

    The USA already has a quarter million NG/LPG vehicles, but other countries are far ahead, such as Brazil, Argentina, and interestingly Iran with 2 million+ vehicles.

    NG vehicles are both less polluting and safer than petrol vehicles.

  22. I see a “souped up” model was used to get these results.

    I doubt if there has been a shift from coal fired to natural gas fired boilers that provide the steam for electric power generation. Shifting the fuel supply takes planning, time and money. So I doubt if the study can list the power plants that have Been converted.

    Babcock & Wilcox, the boiler manufacturer, has a white paper discussing some of the factors to consider at:

    http://www.babcock.com/library/pdf/MS-14.pdf

    One the factors B&W says to consider is “impact of future changes in fuel prices and the
    potential risk associated with natural gas price volatility”

    A colleague of mine once did a study for the American Gas Association (AGA) and came to the conclusion that natural gas supply depended on price- not the other way around. This is because if the price is too low, the gas is simply left in the ground. It will still be there when the price goes back up(of course, he was asked not to put that in his report).

    Another factor B&W says to consider: “ amount of acceptable de-rate “ In other words you are going to get less power when switching to natural gas.

  23. So a US Government agency, ‘supports’ the research, including recommendation of a carbon-tax. I am completely suprised as are all of you I’m sure. I do enjoy the first point made about the redux in “carbon” with the caveat they don’t use coal all that much. How accurate is any of these ‘measurments’ really? Well off I go to my Church of Cynicism; or is it just Honesty.

    and as for LNP automobiles, try methanol, I’m sure Soros and T. Boone will still get rich(er).

  24. I note that whatever the finding, the solution is ALWAYS the same…introduce a tax to increase the power of central government and drive up the price of EVERYTHING. What is it about watermelon solutions that always wind up with a big government bureaucracy and a diminution of personal liberties?! It was the solution to “Global Cooling”, it has been the solution for “Global Warming”, “Anthropogenic Global Warming” (Catastrophic or not) “Global Climate Disruption” (whatever that is!) “Hang Nails” and “Split Ends”. Really! They need to find a new solution (preferably one that doesn’t involve killing half the people on the planet!)

  25. old engineer says: February 27, 2012 at 8:02 pm
    I doubt if there has been a shift from coal fired to natural gas fired boilers that provide the steam for electric power generation. Shifting the fuel supply takes planning, time and money. So I doubt if the study can list the power plants that have Been converted.
    —————————————————————————-
    The switch from coal to gas doesn’t necessarily mean converting currently existing plants. Coal burners are typically Rankine cycle operations with boilers optimized for the fuel (as you say). There are a lot of new gas plants that are Brayton cycle machines, sometimes using additional Rankine cycle (combined cycle) hardware to increase overall efficiency. These are easy to get permitted and cheap to install. They’re based on redesigned airliner jet engines driving alternators instead of bypass fans. Coal is cheap per KWh generated; NG plants are cheap to buy, but with higher cost to fuel.

    I don’t know of any power plants recently converted from coal to NG, but the Morro Bay plant in California was converted from burning oil to NG about 1995.

  26. @ Philip Bradley

    I drove a natural gas powered van (car pool) for 8 years. No complaints about its power. Big, big complaint that I had to fill the tank every other day as I could only go about 120 miles on a full tank (52 mile round trip/day). It also takes considerably longer to fill a NatGas tank than a gasoline tank. So it essentially extended my awful commute time even further. The other issue was finding a filling station. My employer had one on campus, so that helped, but otherwise there were no filling stations between my start and end point; and this was in Los Angeles! So if we should move to all NatGas/LPG for cars, understand that the support infrastructure needs a lot of work.
    If my experience is typical, then I think you will see a fair amount of resistance to going with NatGas/LPG for cars. I was fine with driving a provided NatGas vehicle, but I wouldn’t buy one.

  27. Unemployed people don’t have enough money to buy gas, don’t need to to drive to work, and don’t go shopping as much.

  28. LearDog says:
    February 27, 2012 at 12:46 pm

    So – a question: if “the Pacific states and New England barely rely on coal” and their emissions dropped 5.4 and 12.1% – what is driving the reduction in those states – and how is it demonstrated that those same factors don’t apply in coal-powered regions?

    California has been losing jobs and citizens at a very large rate. We used to fab a lot of silicon (energy intensive) and that’s all pretty much gone now. Car company shut down (used to make Fords in Fremont / MIlpitas area, now even NUMI is down). Aerospace packed up and left. Even popular gadgets like iPods and iPhones are now made in China (where the old Apple II was made here)

    Basically, IMHO, it’s the the ongoing slide into depression, unemployment, and poverty of the Green Utopia of The Liberal Left Coast…

    Note that Texas shows the lowest drop. They have added a lot of citizens escaping from the other areas and added businesses (even if Obama killed offshore oil drilling and has stifled new refining of Canadian Oil…)

    I’d also speculate that the massive drops in the Rust Belt States relates directly to the massive shipping of their jobs to China too…

    I’d not be crowing over that chart, were I them. China is building new coal plants at a prodigious rate (1 a week or so) as their economy is growing very fast (at least until recently when we became poor enough to slow down buying their trinkets…)

    Oh, and The Feds shut off water to a large chunk of the area toward Fresno / Kern to ‘save the delta smelt’ (a trivial bait fish not significantly different from all the other smelt that are out competing it…) putting a lot of farm equipment in the barn and a lot of folks out of work and a lot of food processing equipment turned off and…

    Hey, ‘every little bit of poverty helps’ /sarcoff>

    Oh, probably ought to add the death of the local housing industry and all the Mexican home builders leaving…

  29. old engineer says:
    February 27, 2012 at 8:02 pm

    You don’t need to build new plants. There’s always some excess capacity built into the system. To handle outages for maintenance or acts of nature. So it’s possible to ramp up production at gas powered plants, and ramp down production elsewhere.

  30. Declining or increasing atmospheric levels of CO2 are meaningless. CO2 emissions are simply a means to double tax hydrocarbons oxidized to perform work. It is a disgrace that semi-intelligent people have fallen for carbon dioxide as climate controller. Never forget our governments (Federal, state, municipal etc.) decide how much they want to spend, then institute tax policy to TAKE the money from you and me.

    If you believe this statement: “According to their econometric model, emissions could be cut further by the introduction of a carbon tax, with negligible impact on the price of electricity for
    consumers.” your intelligence quotient may be much lower than you believe…………………

    Uzi

  31. I wish federal government would simply remove CO2 (aka plant food) from the equation when establishing their energy policy.

    Better yet, I wish the federal govt would get out of the economy entirely and shutdown the Dept of Energy and the EPA. State governments are more than capable of setting their own pollution standards that meet the unique economic, social, and environmental priorities of their citizens.

    The federal government manipulating energy policy to serve the needs of special interest groups is destroying our energy independence, stifling energy innovation and development, drives up costs and drives me crazy.

    As a side note, I’m getting sick and tired of politicians and news “experts” erroneously attributing exploding oil prices on everything under the sun (Middle East tensions, improving economy (lol), lack of domestic production, China’s over consumption of oil, etc.) when the only TRUE reason is all the money printing being done by the Federal Reserve to finance $1.5 TRILLION/yr budget deficits. As almost all oil contracts are based in dollars, any devaluation of the dollar by excessive increases to the US$ money supply will automatically increase the price of oil as the US$ loses value.

    I’m also sick and tired af all the money being wasted on “green” energy white elephants that supposedly “create” jobs. They don’t they destroy them. A study conducted on Spain’s “green” energy initiatives found that for every “green” job created, two private sector jobs were lost because alternate energies are so expensive, unreliable (no wind and the whole concept of night) and inefficient.

    Thorium/fluoride reactors seem to offer the best alternative energy available: cheap (theoretically of producing energy at $0.01/kwh), abundant (about the same quantity in nature as lead), safe, efficient, and very little nuclear waste (and very short half-life,too). The EPA will, of course, prevent this viable energy source from ever being developed for the US.

  32. Using Dan in California’s numbers for CO2 emissions from coal plants (20,000 tons per day per plant), and multiplying out the $5 per ton suggested carbon tax gives us an increased cost of operation of $36.5 million per year per plant. And this is a “negligible” increase in electric rates?? Where? For the utility company that operates 10 coal fired units this is a rate increase of $365 million per year. That can’t possibly be negligible for any rate structure I can think of.

  33. DesertYote says:
    February 27, 2012 at 3:33 pm
    A model created by a Collage senior in an Environmental Economics Program? I am dubious to say the least. If the kid had the brains to do this he’d be making big splashes in more valuable area of math and be wasting his time in the bogus field of Environmental Economics.

    Thanks for reminding me — There is no such thing as Environmental Economics. There’s just Economics. Anything else is just political indoctrination masquerading as a real field of study.

  34. Gentlemen

    In my view, this study seriously over simplifies the situation faced by utilities in 2009. While the drop in electrical demand did result in a disproportionate drop in all emission, including CO2, The study appears to ignore several factors in play in 2009.

    Indeed, 2009 was such an unusual year, I don’t feel it would be appropriate to suggest that low natural gas prices played a predominate role in lowering GHG emissions that year.

    Factors in play during 2009 included:

    1) The price of gas was unusually low compared to coal due to a unusual glut in domestic gas coupled with high international demand and a relative shortage of coal. (e.g. exceptionally high demand for coal in Asia was driving coal prices up). Hence the coal to gas price ratio was distorted.

    2) Changes in the CAIR regulation were significant factors in 2009. Complicating factors included:

    • Utilities were shifting from the CAIR Phase I regulations to the stricter Phase II regulations. The Phase II regulations had a new requirement to meet NOx emissions requirements year-round rather that just in the ozone season. Consequently, the cost of running uncontrolled units was significantly higher in 2009 compared to 2008. (When utilities calculate their dispatch cost, they factor in the price of emissions allowances for SO2 and NOx).

    • It was not all that clear how reliable the industries SCRs could be operated for NOx control with the new year-round requirement. Consequently, it was not uncommon to have coal units on backup standby to cover base-load units with a questionable SCR… while running the gas units hard for peaking. (i.e. a good deal of non-economic dispatch was occurring to protect system reliability).

    • Utilities were preparing for a drop in SO2 allowances planned for 2010 under CAIR Phase II. This meant a number of utilities had units on outage to allow the installation of new SO2 and NOx controls. (i.e. units not previously considered economic to controlled were in the process of being controlled AND being operated less until controls could be installed)

    • The sudden drop in electrical demand also significantly impacted the type of plants each utility dispatched in 2009. Pre-2009, when the economy was good, utilities used their smaller coal units to cover the extra peak and seasonal demands associated with the healthy economy. These small units typically had fewer pollution controls; largely because it was more economical to control large based-load units and still meet the EPA CAIR rules. However, when the economy tanked, the need run to run the uncontrolled units diminished with the drop in demand.

    3) Finally, if you examine the study’s regional impacts on CO2 emission reductions; you can see a disproportionate impact from the Mid-West/South to the East. This is a pretty good indicator that the CO2 reduction is mainly due to reduced demand because: The U.S. East coast (including Florida) imports a substantial of electricity from the south east and mid-west. See typical power flows here:

    When the economic crises hit, manufacturing was hit hard in all of the mid-west to eastern regions This resulted in a substantial drop in demand in these regions; particularly compared to the west coast, which manufactures… well virtually nothing.

    The problem with single year “studies”, like the one above, is that they assume an economy/industry in transition is operating to an idealistically economic optimum with few overriding non-economic drivers. This is almost never the case. The study may be a useful academic exercise for a doctorial thesis. But, in my view, it has no real world value.

    The bottom line is that 2009 was such an unusual year that very few in the industry use it as being representative. And no one in his right mind would make investment/policy decisions based solely on an analysis of events occurring in that year.

    With regard to Mr. McElroy’s predication:

    “While the data from 2011 are not yet available, based on the gas prices, we’re making a confident prediction that there should be a continued shift from coal to natural gas in 2011 as compared to 2008,”

    Given my knowledge of which units were dispatched in 2011, I would agree that we will see more gas used in the 2011 data. Indeed, I will likewise predict that 2011 will show an increase in gas use.

    However, the current situation has little in common with 2009. I would attribute the increase use of gas to a combination of: 1) the EPA’s passage of the odious CSAPR, MACT, and GHG rules and the general regulatory attack on the coal industry; 2) the continuing bad economy as compared to the whole of 2008; 3) reduced 2011 winter electrical demand due to mild weather; 4) an increased winter 2011 gas supply due to a mild weather; 5), on the bright side, the emergence of cheap shale gas at historical low well head prices, and 6) continued high demand for coal in Asia.

    In the long run, I will go two steps further. I predict: 1) That to the extent that utilities build any new power plants they will more likely build gas units (as the new EPA rules simply don’t allow any other outcome); 2) Those existing coal units which are controlled, or will be controlled, will produce electricity cheaper than the new gas units (i.e. the total cost of the nearly fully depreciated coal-units will be cheaper than the un-depreciated gas units).

    Regards,
    Kforestcat

  35. Kforestcat says: February 28, 2012 at 10:59 am
    Gentlemen
    In my view, this study seriously over simplifies the situation faced by utilities in 2009. While the drop in electrical demand did result in a disproportionate drop in all emission, including CO2, The study appears to ignore several factors in play in 2009. ………………….
    —————————————————————–
    Thank you for what is obviously an insider’s view of how the power generating industry works. I’m just a nosy outsider looking into this field.

  36. As shown by this EIA document,

    http://205.254.135.7/totalenergy/data/monthly/pdf/sec7_5.pdf

    US total electricity generation fell off a cliff in 2009.
    Moreover, it is not clear from the Harvard study that they adequately took into account weather related effects. Were they using actual generation numbers or weather-adjusted? If they’re using actual generation, then you can’t tell anything meaningful from their study.

    What is clear from the above document is that US electricity consumption rose steadily every single year from 1973 at approximately 1,860 TWh to about 4,100 TWh in 2004. It has flatlined ever since. What this document tells me is that US electricity demand has marched along steadily with US GDP growth over time with the largest portion of that growth being supplied by new nuclear, particularly for 1973-1995. From 1973, nuclear power increased its total energy output by a factor of 10, while nat gas increased its output by a factor of about 2.5.

    What the flatlining in 2004 tells me is that this is roughly the time when manufacturing in the US also went to zero growth. If so, then it suggests to me that the days of 6-7 per cent annual GDP growth in the US are gone, possibly permanently. At least until someone shuts down the morons at EPA. No one’s going to make any large industrial investment in this climate of regulatory havoc, and no one has.

    Furthermore, the Harvard study is meaningless rubbish because it looks at far too short a time line for changes in generation patterns. In a span of just a couple of years, the result is likely to be contaminated by all kinds of immediate factors like plant outages and weather effects, which disappear over a long term trend line.

    Old Engineer @ 8:02 is right. There has not been enough time for conversion of coal-fired boilers to gas-fired boilers. What there has been is a significant fleet of gas CTUs used at only limited capacity on the east coast of the US. These were idled even during winter peak loads during the middle part of the last decade because of high gas prices. By and large, utilities such as NEPOOL and NYPA were importing more electricity from southern states coal generation and increased imports of hydraulic generation from Quebec. The collapse of gas prices over the last two years has simply fueled a higher utilitization rate of these CTUs.

  37. As a former coal power-plant engineer, I can tell you why electricity demand (carbon production) has fallen off — lack of industrial demand (which was over 40% of total load). My company was (is) very sensitive to that. And electric sales to other utilities used to be a big money-maker — no more.

    Instead of celebrating, the loss of demand just illustrates how industry is leaving/scaling down. This is a BAD thing.

  38. Mr. Holle,

    The reason that the North American continent is a Net Carbon dioxide sink has little to do with suburban lawns and landscaping, although I suppose that has some marginal contribution.

    It is because North America has vast amaounts of land used for ranching, agriculture, and Silviculture. It is not well known but there is more land set aside than thearea of13 original colonies. It is preserved and dedicated to Parks, and Wilderness,all of which consumes and sequesters vast amounts of CO2 blowingf inon the winds from the Pacific and presumeably generated in Asia, although net ocean outgassing is a possibility, not fully understood.

    Man in Amrica, has created an environment that consumes Flora biomass and allows for a net increase in the use of CO2 because these flora products are not just allowed to rot and returrn CO2 to the atmosphere.

    Ignorant, thoughtless Greenies muttering about wishing for “old growth forests” overlook that a dead tree rotting in an old forest just puts CO2 back into the atmosphere. Harvesting crop and wood for food, lumber and paper consume the flora biomass, while also providing work and product for humanity. The NASA satellites as well as the Princeton studies and mesurements all over America, affirm that CO2 on NET is being sequestered. That can only come from the actions of Man that are different then are employed elswhere in the world.

    The Amazon Rain forest is a prodigious producer of biological life but it is largely a constant recycler of the same quantiy of bio-tonnage and therefor provides only a small Net carbon dioxide sink. The carbon dioxide sink is still a sink from the Amazon though, consuming net CO2 from the atmosphere. I think it is also proof that the so called exploitation of the rain forest is just so much overblown fears, and on margin the Amazon Rain Forest is still re-expanding.

    The NASA satellites are afirming a greening Earth everywhere from the fertilizing effect of more atmsopheric CO2. The Plant Kingdom has consumed too much CO2 from the atmosophere and are have stunted their growth. The rise in trace levels of atmospheric CO2, from Man or Ocean outgassing, is wholly benign and beneficial, as the feared climactic effects are increasingly seen as de minimus, and of little concern..

    • Stas Peterson commented on The economic downturn effect on U.S. carbon emissions.

      Speaking of the Amazon, did you note the recent discovery of immense “geoglyphs” lurking under the jungle? Seems that pre-Columbus, the Amazon was substantially cleared and cultivated. All good Greenies should be pressing to return to those Halcyon Days!

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