Natural Gas Overtakes Coal For First Time Ever As Biggest U.S. Electricity Source

Natural Gas Overtakes Coal

For the first time ever, natural gas has overtaken coal as the primary source of U.S. electric power generation earlier this year. For years this milestone has been in the making, as the price of gas has fallen, and new regulations have increasingly made coal riskier for power generators, and the power gen industry switches from coal to gas.

SNL Energy, a research company, said in a new report utilizing data from the Energy Department that approximately 31% of electric power generation in April came from natural gas, and 30% from coal.

The U.S. drilling boom that began in 2008 has increased domestic natural gas production by 30% and rendered the U.S. the world’s largest O&G producer.

U.S. coal production is forecast to decline by 7.5% this year, according to the EIA. Meanwhile, U.S. coal mining firms’ shares and bonds have steeply fallen.

In 2009, the Financial Times reports that there were 593 coal-fired power plants in the U.S. But by 2013, this was down to 518, with a total summer capacity of roughly 303 gigawatts.

Since that time, the shift away from coal has picked up steam. During 2014, U.S. coal capacity fell by about 3.3GW, and the EIA forecasts it will shrink by an additional 12.9GW this year.

Further, the surviving coal plants are being run less frequently, the FT reports. In April, U.S. coal plants generated 42.8% of their capacity, down from 51.3% in April 2013. The paper says they switched places with gas-fired combined cycle plants, which generated 47.5% of their capacity in April 2015, up from 40.4% in the same month of 2013.

Article Written by: Gary Searles