US Leading the World in CO2 Emissions Cuts? Will It Continue?

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There’s been a bit of chatter this week about the US leading the world in CO2 emissions reductions. David Roberts of Grist has a great piece on why almost nobody is talking about it, which includes how and why it’s happening.

One of our readers (who I hadn’t met before) actually dropped me a note the other day asking me if the news was legit and if it was really mostly from an increase in natural gas production.

I ended up writing a reply that I thought made for a good post. So I’m putting most of that here, with some additional comments….

Yes, but…

Yes, CO2 emissions in the US have dropped “a lot” (7.7% since 2006, and 1.9% last year alone). The International Energy Agency writes, “US emissions have now fallen by 430 Mt (7.7%) since 2006, the largest reduction of all countries or regions.”

Some of the key reasons for that are the economic downturn, natural gas replacing coal on the electric grid at a somewhat fast past, and perhaps La Niña (which results in a drop in the use of energy-intensive air conditioning).

But, that was the past, what about the present and the future?

With the economy picking up, the heat rising (especially with a transition from La Niña to El Niño), I’m afraid this trend will slow or reverse this year.

On the natural gas topic: natural gas is, by most studies, significantly better than coal. But there are studies that have found we aren’t adequately accounting for leakage rates. Though, the latest study I’ve seen on the matter disagrees. It’s hard to know.

I’m not really a big fan of natural gas — think it won’t do enough and we’d be much better off putting a price on carbon and putting more into renewables. But the fact of the matter is that natural gas (artificially or not) is basically as cheap as any other major energy source these days (see the LCOE tab). So, until something changes, it’s going to continue its rapid growth.

So, I can only hope the natural gas supporters and the studies finding it isn’t as bad as coal are at least right. But that really doesn’t solve the problem that it’s still not considered to be enough….

Adding on to all that, there are some more things to consider. Coal is going out because of two things: 1) better air, climate, and water regulations from the EPA, and 2) an increasingly high cost relative to its competitors. Natural gas is one of those competitors, but so are increasingly cheap solar and wind power.

What if…

NREL’s new tool for comparing LCOE is great (for the uninitiated, LCOE is essentially the standard format for comparing the cost of electricity of different energy sources), but it’s a bit biased against solar and wind. Why? It’s including prices for old and new technology, while new solar and wind technology costs have dropped hugely in the past year alone. Not so for their competitors.

Nonetheless, it shows wind as highly competitive — median of $0.05/kWh, the same as natural gas combined cycle, and only higher than hydropower ($0.03/kWh).

Solar is higher, but rooftop solar competes with the price of retail electricity. And it has already hit grid parity in some regions.

Now, as stated above, many have hinted that natural gas prices are artificially low, that it’s essentially a fracking Ponzi scheme. That argument looks pretty convincing to me. At the very least, as one CleanTechnica reader and commenter (David Fuchs of the Hephaestus Project) recently noted, “While natural gas prices are falling due to production, there is a current lower limit of 4 cents a kwh. The lower limit is due to the cost of delivery, drilling, etc. No new technologies are on the horizon that will bring that price down.” The fact that land and “soft” costs don’t add up to more than $0.05/kWh today is already a bit surprising to me, but this low cost seems to be about as low as it can go, and hardly beats wind power in many locations.

The point I’m taking awhile to get to is this: what if natural gas wasn’t exceedingly low? My guess is that we’d have a lot more wind power and a lot more rooftop solar power. Would it have replaced coal as much as natural gas has? I don’t know. In the end, did we get a win with low natural gas prices and a cut in emissions? I don’t know — I can only hope so.

Here’s another big “what if” is about the future: As noted above, natural gas can’t go much lower. But renewable energy can, because its fuel costs are zilch, and a lot of the cost is still in the technology, which can become much more efficient. Here are some more apt comments from that reader mentioned above:

On the horizon for solar PV are more efficient cells.
http://upload.wikimedia.org/wikipedia/commons/4/42/Efficiency_chart_rev_05-2012.png  Which will lower the cost of solar.

For wind there are larger windmills and ocean based both of which will reduce the cost per kwh further.

10-12 years in the future we have nanotechnology. At which time the cost of solar will fall rapidly and so will the cost of energy storage.

By 2030 the entire fossil fuel industry will be on its death bed as new technologies make the old way of generating energy obsolete.

Furthermore, high “soft” costs from a nascent solar industry are being chipped away at fast, further bringing down solar costs.

So, here’s hoping that renewable energy grows fast enough to increase emissions reductions. And let’s hope staggering heat waves and drought wake people up to the threat of global warming.

Oh yeah, and if we simply had a price on carbon that made the cost of electricity from coal and natural gas reflect their true costs (or at least get somewhere closer to them), what a different story it would be today! (15% reductions since 2006? 20%?)

And what a different story it could be tomorrow!