Coal-Generated Electricity Falls to 39-Year Low

by | Jun 7, 2012

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The share of electricity generated from coal-fired power plants dropped to 34 percent in March, the lowest level in at least 39 years, the US Energy Information Administration said.

Coal generation decreased 29 billion kilowatt hours from March 2011 to March 2012, while natural generation increased 27 billion kilowatt hours during the same period. The fall in coal’s share of total net generation came amid historically low natural gas prices and the warmest March ever recorded in much of the United States.

Natural gas prices were near 10-year lows this winter, causing generators in states such as Ohio and Pennsylvania to increase their dispatch of natural gas-fired plants, EIA said. Newer natural gas-fired plants operate are more efficient than older, fossil-fired units, which increases the competitiveness of natural gas relative to coal, EIA said.

The shift to cleaner-burning fuels like natural gas has helped public power systems reduce carbon dioxide emissions 2.4 percent since 2001, despite a 9.4 percent increase in power generation, according to a May report by Target Rock Advisors.

ExxonMobil, which increased its stake in shale gas more than two years  with its $41 billion purchase of XTO Energy, recently predicted that natural gas will overtake coal by 2025 to become the second most widely used source of energy worldwide.

The need for natural gas resources is greatest in regions like the Asia-Pacific, where energy demand is projected to grow by more than 50 percent over the next three decades, Exxon said.

To date, North America has been the proving ground for unconventional gas development and the results have been encouraging, confirming the potential of this resources, Exxon Chairman and CEO Rex Tillerson said in a recent speech at the 25th World Gas Conference in Malaysia.

Tillerson said Exxon is studying plans to export liquefied natural gas from the United States, Reuters reported. The US has approved only one LNG export project. Fourteen more LNG projects have either filed for approval or are under consideration.


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