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Published on April 2nd, 2012 | by Zachary Shahan


Don’t Believe the (Natural Gas & Anti-Clean-Energy) Hype

April 2nd, 2012 by  

Now, I think everyone knows that coal is going down. It’s too expensive. Especially if you take its health costs into account. But some (i.e. the US Energy Information Agency) don’t seem to have a clue as to how fast it is going out, and and many also don’t seem to have a clue what is going to replace it, or are trying to change the course of history through propaganda and lobbying (something like what Germany went through a decade ago, perhaps).

Coal’s Rapid (Yet Slow?) Decline

Coal power consumption in the US will this year reach its lowest level since 1996, according to new EIA estimates. But, somehow, despite coal’s share of energy generation in the US falling from 44% in 2010 to 42% in 2011 to a predicted 40% in 2012, the EIA’s annual energy outlook released in March predicts that coal will only fall to 39% by 2035. Why would coal not keep declining (more than 0.043% a year)? Natural gas and several sources of renewable energy are already cheaper and more flexible. The idea (or US EIA projection) that coal would only drop another percentage point in the next 23 years is absurd.

Change in US energy generation of different energy sources from 2010 to 2011, based on statistics from the US EIA presented below. (Figures in thousand MWh.) Source: CleanTechnica

Natural Gas Filling the Gap? Not Really..

Now, a lot of folks will tell you with complete conviction that it’s primarily natural gas replacing coal, due to natural gas’s (artificially) low price these days. A lot of people will tell you this. But guess what — in 2011, renewable energy increased its share of the energy generation pie much more than natural gas did. Here are some 2011 stats (again, actually from the EIA’s own March 2012 monthly report):

  • Coal decreased 113,025,000 MWH in 2011 (1,847,290K in 2010 to 1,724,265K in 2011)
  • Nuclear decreased 16,743,000 MWh in 2011 (806,968K in 2010 to 790,225K in 2011)
  • Natural gas increased 28,898,000 MWh in 2011 (987,697K in 2010 to 1,016,595K in 2011)
  • Renewable energy increased 92,791,000 MWh in 2011 (427,276K in 2010 to 520,067K in 2011)

In other words, more than 3 times as much renewable energy generation was added (net) compared to natural gas generation! (And remember, there are 3 reasons natural gas won’t be so cheap and competitive with clean energy for long.)

Now, to get even more absurd, this same report predicts that renewable energy will account for 16% of US energy generation in 2035… despite the country already being at 12.6% in 2011 and having an annual growth rate of over 20%. Crazy. Again, does this remind you of something?

Thanks to commenter RobS on this post for bringing up many of the points above.

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About the Author

Zach is tryin’ to help society help itself (and other species) with the power of the word. He spends most of his time here on CleanTechnica as its director and chief editor, but he’s also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as a solar energy, electric car, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada.

Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don’t jump to conclusions.

  • Brillopad44

    You obviously have missed the most important point. Solar and wind are 4 times as expensive as coal/ nat gas. Why do you think Germany is stopping subsidies for solar. Newsflash. It’s to expensive. Why are solar companies gong bankrupt. Newsflash. No one will buy their product without massive govt subsidies. I’m a senior. Many seniors cannot afford increasing energy costs we must pay to susidize super expensive solar and wind. Charles Newton

    • Your comment is basically just full of myths.

      Wind is the cheapest form of new electricity in many places. Solar is at grid parity in many places now. This is without subsidies. And this is without taking into acct the $500 billion / year coal costs the US in health costs.

      Germany cut its subsidies for an entirely diff reason. search “germany solar” on our site and you’ll find many posts on this.

      Also check out:



  • Pingback: A (Non-)Loan Guarantee Non-Scandal with Another Solar Company ($2 Billion Conservative Media Mistake) - CleanTechnica()

  • alf

    >> Alf, I don’t think you are familiar with the industries or their place in the global market at all. read up on it — it’s a given because it’s a given. <<

    Give me a break. I'm trying to make a point about "what many people actually believe about the industries", completely independent of what I believe, or any other obvious realities. Is that really such a difficult abstraction to pick up on?

    Btw: I was involved in the solar industry in the 70s.

    • RobS

      Your confusing risk of the industry as a whole with the risk profile of individual companies. Niche industries attract many small operators, as these industries transition to mainstream most of the individual companies fail leaving a few consolidated efficient operators. The motor vehicle industry is a perfect example, in their early days there were more than a hundred small US car companies with essentially equal shares of the industry. As it grew this fell until the big three represented over 95% of the domestic industry.

      From a fund managers point of view it is irrelevant if the industry as a whole is growing into a behemoth, all that matters is trying to determine who will come out as the big players. A few years ago most would have said BP but they have essentially abandoned their solar aspirations.

      I don’t think the fund managers believe the industry is going to shrink to nothing, I think they think the majority of start ups will shrink to nothing and they are probably right, if they can pick the winners they old make a fortune but if they pick wrong they lose their shirts.

      • Well-explained. Thanks for that. Have to keep that auto industry example in mind.

      • alf

        >> I don’t think the fund managers…
        Exactly.. That is what you **think**. And you can feel free to continue to “think” whatever you want.. I’m not confusing anything..

        • RobS

          Why don’t you respond to the point I made rather then the phrasing. My point is that the fund managers are dead right to be apprehensive about renewable energy stocks, in an evolving industry most will fail as most car manufacturers failed as cars grew into a mainstream industry. That is a natural process of attrition and consolidation of niche small players into major industry players. None of that says anything about whether the industry as a whole will grow, stagnate or die out just that individual players even in a very successful industry represent an almost unassesable risk.

      • alf

        Ok.. Lets try this.. I’ve become quite wealthy investing in the stock market and know a few professional money managers, but maybe I’ve just been lucky and I’m actually a “slightly confused commenter” (thanks zack!)..

        So I tracked down a couple of statements from an interview with Rona Fried, who is the founder and CEO of sustainableBusiness.com.
        I would give you a link, but this is paid-for content. The first quote is almost exactly my point, and what I believe.

        “It’s remarkable that fossil fuel interests and conservatives have been able to convince about half of Americans to believe what they say. Here’s my challenge: Go to the most conservative fund manager and show him/her these financials, without showing the name of the company. Ask this question: Would you short a company that’s making $1.95 EPS a year, growing 35% a year with 100 million shares outstanding that’s only trading at .70 book value? I guarantee you, his/her answer would be: Are you out of your mind? Then, tell him it’s a solar company. The answer I’d expect is, Oh yea, they’re going to zero.”

        “I think Wall Street has created an atmosphere where the buzz and belief is that solar companies are no damn good. Even though all evidence is to the contrary, when everyone around you says something’s terrible, it’s hard to buck that trend, especially when those people are your bosses and the TV news outlets you depend on, like CNBC.”

        • Bob_Wallace

          I think business, in general, has created a myth in which Republicans and everything they stand for are good for business…

          “Since 1929, Republicans and Democrats have each controlled the presidency for nearly 40 years. So which party has been better for American pocketbooks and capitalism as a whole? Well, here’s an experiment: imagine that during these years you had to invest exclusively under either Democratic or Republican administrations. How would you have fared?

          As of Friday, a $10,000 investment in the S.& P. stock market index* would have grown to $11,733 if invested under Republican presidents only, although that would be $51,211 if we exclude Herbert Hoover’s presidency during the Great Depression. Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years.”

          This cuts off at October, 2008. There are some interesting graphics on the page.


          When President Obama came to office in January 2009 the S&P 500 was 832. Last week it closed at 1398. That’s a 68% increase.

          Yes, a lot of it is recovery, but the previous president rode the market and economy into the ravine. That administration certainly didn’t do a good job at making businesses successful.

  • Bob_Wallace

    alf – restarting up here…

    I just don’t agree with you. I do agree that the fossil fuel industry would love to stop renewables and does what it can to slow the transition, but I don’t think they are being particularly successful.

    Here’s what I’m going on…

    Legislation has been introduced in some conservative, heavily Republican states which was designed to curtail wind farms. It failed.

    Recently Republican governors from conservative states have been campaigning for more federal support for wind.

    Some of the most conservative states (Texas, Oklahoma, for example) are installing massive amounts of wind generation. Tennessee is running a HVDC line from East Tennessee to Oklahoma in order to import Oklahoma wind.

    Chevron is the world’s largest supplier of geothermal electricity.

    Warren Buffett and very large financial corporations are investing billions in wind and solar. (Buffett has invested $8 billion in the last three years.)

    It’s not just the US, but around the world wind and solar are being installed at accelerating rates. Multiple countries have set impressive goals for the percentage of their power from renewables.

    It’s too late to stop renewables. It’s too late to slow them down in any but the most backward places.

    Solar prices are dropping so rapidly that solar has reached grid parity in large parts of the world. Especially if you are paying retail/end-user prices. You can install solar panels and pay them off with electricity bill savings over a few years and then enjoy decades of free electricity.

    If fossil fuel interests are smart they will start moving their capital away from fossil fuels. They have lost the game….

    • Bob_Wallace

      Here’s some more – 2002 numbers are what I found quickly, but I think they’re fine for back of the envelop discussion.

      The utility sector of the US economy is only 1.9% of the total economy. It is totally dwarfed by wholesale trade, manufacturing, retail trade, health care, etc.

      The utility sector employs only 0.6% of the US workforce.

      The transportation sector accounts for a smaller percentage of the economy than utilities and employees 3.3% of the US workforce.


      I just don’t think your claim that “the fossil fuel industry is the most powerful and influential entity that has ever existed” holds up. Professional, scientific and technical services is a larger sector.

      • ThomasGerke

        But not all economic sectors are equally significant & influencial. Energy is essential for all economic activities. It does have a significant role and the conventional energy corporations love to play the game in which their business model is key to growth, prosperity, …

        In Germany the argument of controlling “rising energy costs” is the current favourite when it comes to reasons to slow the progress of renewables.
        Conventional energy corporations are very capable of shielding their interessts by pretending that they are the patron of industry. Unfortunatly some influencial industry association fall for this (sometimes due to conflicting interessts).

        Nobody likes rising costs… but it seems nobody cares about coal being 300% more expensive than 12 years ago.

        They are influencial, they got an incredibly long supply chain around half the world with all sorts of interessts & businesses depending on them.
        They are not all powerful, but they are the most powerful economic sector, because right now we all depend on their service… and their service made us dependend on a thousends of miles long supply chain that is controlled by them.

        • Bob_Wallace

          ” the most powerful economic sector”

          I don’t think so. Much of the utility industry is made up of local/regional utility companies. There’s no one big building with a great big building on top of which resides someone who can throw a switch and plunge us all into the dark.

          All utilities are ~2% of the total economy. I can’t see the fossil fuel portion of that small fraction carrying the weight that the financial industry has, for example.

          We’re talking about coal which has fallen from 56% to 39% of the US grid supply. The 61% of the grid supply that is not coal is not going to join up with coal.

          Furthermore, coal operations are not going to cease operation in order to bring the country to its knees. Realistically if they tried something like that they would have uniformed folks with guns encouraging them to rethink their plan.

          And we’re talking about oil, which can’t stop the development of EVs/batteries. We’re likely short years from the point at which EVs will start to dominate vehicle sales. Oil does not have the ability to get legislation passed to stop EV development. Certainly not in China.

          The horse is out of the barn. The only thing that will stop EVs would be that none of the battery technology now coming out of the labs works. The EV/battery industry is too diverse, spread across too many countries to stop.

          The most that oil companies can do is to create a lot of noise like we heard over “Volt battery fires!!!” and “Tesla batteries bricking!!!”. They can slightly slow the river, but they can’t stop it. Once the word got out about the bogus battery fire issue Volt sales snapped right back up.

          Too many of the real decisions about where we get our electricity comes from large utility companies who don’t own coal mines. Large companies like Duke Power make their decisions based on price and at this point wind makes a lot more sense than building new coal plants. Same is just about true for installing solar rather than building gas peaker plants.

          • ThomasGerke

            I don’t say that it’s impossible to get stuff done. Compared to Europe, the power market is actually more open for change in the US, as it is quite “balkanized”. When you look at the world largest utilities there aren’t any american ones in the same league with E.On, EDF or RWE. Their reach is far greater than electricity… for example RWE once also owned “American Water”, providing millions of americans with water.

            Non the less, even small utilities do own a chunk of the chain that supplies them. When you got a coal power station it is wise to own a part of the coal mine aswell… that increases the ability of value creation. This commitment makes one also biased against renewables, because they become coal suppliers in the form of electricity.

            But you are right. They are not all powerful and their buisness model will go down. I am just saying that they are powerful foes that are incredibly well conected to government & the media and superbly organized. It takes some extra awareness or frustration within the public, to liberate themselves from defending the interessts of the fossil fuel industry.

          • Bob_Wallace

            Powerful foes. With that I totally agree. Foes with lots of close friends, especially in the media.

            And to a great extent they have captured one of our two political parties. It’s essentially impossible to be nominated in the Republican party unless you take an anti-science, anti-fact stand.

            The industries that benefit from the Republican anti-science holdings are coal, oil, and natural gas. I can’t think of another unless it’s the funeral industry….

          • Recent advances in battery research show that it will likely only be a few more years before electric car costs can be reduced and range increased significantly. Just like the explosive growth of solar power, once that line of economic parity is reached, growth will greatly increase.

        • Many of the claims against renewable energy are simply false. Opponents claim Germany has suffered huge costs because of renewable energy, but when one looks at the German charge for renewable energy, it is 3.5 cent/kwh. Average electric prices in the US have historically risen average of 3.5 % each year. German power lines are mostly underground, instead of the mass of overhead power lines we have here. Running power underground instead of overhead costs 3 times as much. Germany has the value added tax, which accounts for external costs that in the US, are unfairly pushed off onto the rest of society. This also distorts the comparisons of the cost of electricity between the US and Germany.
          Installing renewable energy pays off in later years when the lack of fuel costs overshadow the installation costs, so the Germans will be realizing the fruits of their investment while we are still suffering increasing fuel costs. The investment they make will lower electric costs over time.

      • jeffhre

        Aren’t a large portion of the “Professional, scientific and technical services,” dedicated to serving not only the energy and transportation sectors, but the real estate, finance and other industries that also support the energy and transportation sectors?

    • alf

      >> but I don’t think they are being particularly successful.
      I’m sorry bob, you and I are fighting for the same team, and I love your constant cheer-leading, but I’m thinking that is possibly the most naive statement that anyone has ever sent my way. I’ve been following Geo-politics, environmental policies, advancements in technology, renewable energy markets and other related stuff for like 35 years now. In the game that I’ve been watching all that time, it is the 4rd inning and the score is:
      fossil fuel industry – 176
      renewable energy – 5
      and we just scored all 5 of those runs in the bottom of the 4th inning. I actually believe that the momentum is changing and we are going to eventually win this game, but the fossil fuel industry has been seriously kicking our ass for the whole 35 years that I’ve been watching it.
      @ThomasGerke is making some of the other points I wanted to make so I will leave it at that…

      • It is pointless to compare industries over a time span where one of the competitors ( renewables) has not been competing. Wind has just been going in a couple decades, and only the last 10 years have seen refined models with high efficiency and reliability. Solar has only had off grid use until about 2005, and has achieved grid parity in many locations in the last few years. The economics of wind and solar are now in a place where the next decade of growth will be huge compared to the last, as wind and solar are now better than competitive.

        • alf

          I watched *live* on television, the speech by president Jimmy Carter, 35 years ago, where he discussed the *critical* importance of our energy policy including renewable energy. (High school students know about this speech). A few weeks later, my dad and I built 2 solar thermal panels in our basement, and put them on the roof. In 1980, President Reagan was elected, and cut the renewable energy R&D budget 85% and eventually eliminated the wind investment tax credit which was pretty much the death of the US wind industry (at the time). Google it!!
          I read comments like yours, and in all seriousness I start to worry that, OMG I’m playing for the Washington Generals and we are up against the Harlem Globetrotters, and we are going to be crushed!
          And here is the thing.. If these industries don’t advance fast enough to advert the worst effects of climate change then we LOSE! That will be the deciding factor.. And anybody here that thinks that avoiding the worst effects of climate change is a “given” or a “sure thing” is living in a freaking bubble!!! I would be willing to bet large sums of money on the prospect that we do NOT avoid the worst effects of climate change, except if I then win the bet, I will not be able to enjoy the winnings.
          I’ve bought some farm land and I’m going to build my own large solar farm on it. This will be my small contribution toward avoiding a potential disaster for our species.

  • Dan Daniel

    I’m glad you are challenging the EIA on their projections. I have reviewed their 20 and 30 year projections and they make absolutely no sense. Not only are the coal numbers inflated, but the numbers around nuclear energy are completely nuts. They act as if Fukashima never happened. The EIA needs to go back to the drawing board and completely rework the premises of their long term energy projections. They need to account for:
    1. Fukashima
    2. New EPA regulations on carbon emissions for new plants
    3. Growing probably of further greenhouse gas regulations at state level
    4. Dramatic declines in the cost of solar PV
    5. Impact of state level portfolio standards (like Califonia’s 33% target)
    6. Declines in cost of wind energy

  • lukealization

    Hmm… I wonder if can challenge myself make a comment here with no numbers, percentages or years in it!

    It’s obviously a very faulty prediction by the EIA. Coal will definitely drop alot more than they expect as it is becoming to expensive to either retrofit the plants for the new clean air standards or they’re being priced out of existence by renewables.

    Natural gas may be making up for a chunk of the lost energy, but just like any commodity, it’s prices will go up as use goes up. The only way to ensure stable prices of energy is to remove the concept of commodities. During the next decade, I’m betting that coal use will continue to decline and natural gas and renewables will pick up what’s been dropped. I’m pretty sure the next few decades afterwards will be dominated by renewable energy.

    I’m not sure about nuclear, while I definitely don’t like it, some months it seems to be being phased out, and others its showing a resurgence.

    • I’m in the same boat on all fronts. On nuclear: logically, it seems it should be phased out (too expensive), but many countries seem willing to subsidize it. Hard to know..

      • Even in those countries where the governments are favoring nuclear power, there are large amounts of anti-nuclear citizens in action. Germany and Italy have both seen government favor for nuclear demolished by citizen demands. Now Japan joins the effort with 3/4 of the population against nuclear power. Nuclear power will not recover it’s former acceptance.

  • Alf

    It is my understanding that the EIA is not actually trying to predict the future but rather they start with the assumption that nothing is going to change policy wise, and no technical break throughs will occur, no black swans, no economic surprises, or climate surprises or unforseen events or outside forces of any kind, and then they extrapolate that into the future. In other words, the least probable thing that might happen, is whatever the EIA projects. At least that is my understanding.
    Having said that, yes, these projections show up everywhere! Constantly!

    • RobS

      But even assuming nothing changes and the trends of the last 5 years continues into the future then we will still reach the EIA projection in 2015 not 2035. It becomes all the more ludicrous if you look at the graphs of predicted growth, the wind and solar ones grow at the current rate until 2014 and then plateau with no explanation of why, and the coal graph plateaus until 2015 and then kicks off on a rise again so that from 2015 it remains at ~40% of total generation. Basically they are saying the rise in renewables is a transient aberration that will settle by 2015. It’s really a little bit bizarre.

      • Exactly. I would be curious to talk with one of these folks — hard to even imagine what that would be like.

        • alf

          While you are at it, talk to hedge fund managers. I suspect that many (possibly most) of them will tell you that all solar companies are going to go bankrupt and their stock values are going to zero. And as it turns out, pretty much every solar stock is trading at a value that really only makes sense if that were true.
          So who is right here? I personally believe that solar will be the largest industry on the planet in X years, but apparently there are a lot of people that truly believe that the entire solar and wind industry is going to either totally collapse or shrink to nothing. Are they insane?
          I guess we will see…

          • Bob_Wallace

            Investors do not like uncertainty. It’s pretty clear that a number of solar manufacturers won’t survive long term.

            Some will and will likely become extremely large and profitable.

            It certainly looks to me that we’re going to be installing massive numbers of solar panels over the next 20-40 years.

            But how to pick the winners? Not for the faint of heart and I would guess that current stock prices reflect the uncertainty/inability to predict the future of specific companies more than a measurement of the industry.

            If there was a solar panel non-managed index fund that might be an excellent longer term investment. Some of your money would go to companies that fail, but their business will slide over to the companies that survive and you’ll charge up the profit slope along with them.

          • Exactly. There are numerous companies out there. This is a rapidly changing sector. This is the fastest growing sector of the global economy. It’s hard for anyone to know which companies will come out on top and which will be eaten.

          • Bob_Wallace

            Here’s a list of 169 US computer companies that are now out of business.

            I remember when some of them were major players. I spent close to $100k (2012 dollars) on a DEC machine. Compaq was a major player in desktops.


          • alf

            @bob I think you are missing my point. You and Zachary are making comments that sound like “no one could possibly believe that the solar industry is going to fail… or even not be an earth shattering success”.

            At the same time, the fossil fuel industry is the most powerful and influential entity that has ever existed and they are investing unknown billions of dollars to stop (or severely slow) renewable energy and to affect public opinion. And they have been quite successful at this for many, many years.

            So 1) Nothing is certain if you are up against the most powerful entity that has ever existed and 2) there are certainly a large number of important and successful people that believe the solar and wind industries will fail.

            I’m betting on solar and wind but it is certainly not a sure thing..

          • alf, i don’t think you are familiar with the industries or their place in the global market at all. read up on it — it’s a given because it’s a given.

        • I expect it would be like talking to lobbyists for the large industries that have captured the government.

    • Yeah, that was my impression, but it’s completely irresponsible given how off it is and how much people cite it. 😀

  • Captivation

    The ecologic and therefore economic center of the new world order has passed back to Europe. Once their housekeeping is complete, I expect they will begin to demand that global trade agreements reflect sustainable priorities. That means carbon based economies won’t be able to sell their wares to the world’s wealthiest region. Everything after that is simply a chain reaction that ends ultimately in the end of the fossil fuel economy. When such changeovers happen, the ones who get there first reap the rewards and the ones who arrive last have to struggle just to regain their relevance.

  • Bob_Wallace

    I’ll double check, but I’m pretty sure coal broke below 40% in December, 2011.

    We’ve got a bunch (100+) coal plants scheduled for early closure. Too expensive to retrofit them in order for them to pass the new EPA regulations.

    Rumor is that another 2-3 dozen coal plants are likely to go off line because they are too expensive to operate with renewables eating into their profits.

    We’ve got a handful of coal plants coming on line – plants that were permitted and on which construction started many years ago. I think only one single new coal plant permit has been granted in the last three years.

    Looks to me like the EIA has made a very faulty prediction.

    Now, let’s get more wind and solar on the grid. If the Sun is shining or the wind is blowing then gas gets turned off. Fuel-free generation wins in a free market….

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