What impact have natural gas prices had on emissions?
Natural gas has increasingly replaced coal and oil as the fuel used to generate electricity in the region, due primarily to lower natural gas prices. This fuel switching has had a significant impact on regional emissions.
Fuel switching to natural gas has had a major impact on reduced electric sector emissions
The portion of electricity generated by natural gas has increased 45% since 20052, driven by the drop in the price of natural gas, which has declined approximately 50% since 2005. Electricity produced from natural gas emits 56% less carbon dioxide than coal and 46% less carbon dioxide than fuel oil because of the lower carbon content of natural gas and the much higher efficiency of natural gas generating equipment. This fuel switching has been a major factor contributing to reduced power plant emissions, which have decreased 22% between 2000 and 2010.
There is limited opportunity for more emissions savings from fuel conversion
Additional conversion to natural gas will not produce all of the further emissions reductions needed in the power sector. With only 6.9% of electric generation in the region coming from coal and oil today, further emission reductions from more fuel switching are limited. While direct stack emissions from natural gas are much lower than coal and oil, the emissions associated with the production and transport of natural gas must be incorporated into a full assessment of its environmental impacts.
2 ENE’s “RGGI’s Past and Future: Emissions Trends and Potential Reforms” (December 2012). The underlying data is from the U.S. Energy Information Administration (EIA).