Natural Gas to Beat Out Coal in America by 2035

Thursday, January 9th, 2014
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One of America’s leading energy bodies expects natural gas to surpass coal in terms of share of energy production in just over two decades.

The Energy Information Administration (EIA) has significantly revised the figures from its 2013 outlook, which saw coal remaining ahead of gas in terms of share of power generation through 2040.

The 2014 outlook has raised estimates of natural gas production by 11 per cent as a result of the contribution made by continued shale gas development, and now projects that gas will overtake coal in terms of its share of power generation by 2035.

Whereas the 2013 outlook pegged coal’s contribution to power generation at 35 per cent by 2040, as compared to 30 per cent for natural gas, these figures are now almost reversed, with natural gas seen comprising 35 per cent by 2040 and coal’s share falling to 32 per cent.

Gas Chart

In addition to the major impact made by increases in shale gas production, other drivers in natural gas’ early lead over coal will include falling gas prices and efforts by regulators to shut down coal plants while also stymieing expansions in capacity. Installed coal capacity is expected to decline by more per cent 15 per cent over the next three decades, falling from 310 gigawatts in 2012 to 262 gigawatts in 2040.

According to EIA’s figures, coal accounted for 37 per cent of US power generation in 2012, significantly down from its majority share of 52 per cent at the turn of the century. Natural gas accounted for 30 per cent, nearly doubling its share in just over a decade.

The EIA also expects renewable energy and nuclear to jointly account for the same amount of power generation as coal by 2040, with each responsible for 16 per cent of the market. While nuclear will suffer from a slight diminution in market share as expansions in capacity fail to keep pace with the retirement of old plants, total installed capacity is set to remain essentially the same by 2040.

Renewable energy, on the other hand, will maintain strong growth to achieve parity with nuclear power by 2040, contributing to a decline in US carbon dioxide emissions of seven per cent over 2005 figures by the year 2040.

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