US CO2 Emissions Drop to 1990 Levels

Monday Morning Report, July 9, 2012

For US energy-related carbon emissions, fuel switching from coal to natural gas has dramatically lowered a critical greenhouse gas emission. By the end of the year, USA's 2012 emissions will have fallen below 1990 levels.

America's carbon emissions may drop back close to 1990 levels this year, according to data in the Energy Information Agency’s (EIA) latest Monthly Energy Review. The reductions in greenhouse gas were not perceived to be possible a few short months ago. The emergence of shale gas makes a reality of many things recently thought impossible. Shale gas production has slashed carbon emissions and saved consumers more than $100 billion per year.

America's energy related carbon emissions dropped approximately 7.5%, during the first three months of 2012 compared to the same period of 2011. And first quarter 2012 emissions are approximately 8.5% lower than emissions in the first quarter of 2010. Total energy carbon emissions were 5,473 million tons in 2011 and last year fell below the 1996 mark of 5,501 million tons.

The first quarter 2012 reduction of 7.5% makes it possible that this year emissions will fall back essentially to the 1990 level of 5,039 million tons.

The 1990 level of carbon emissions is an important measuring stick, as it is often used as a critical data point for judging progress in reducing a nation's carbon emissions. The California Air Resources Board (CARB) uses 1990 levels as its benchmark for creating regulations and Cap-and-Trade program under AB 32.

Significant reductions from electric power production as a result of fuel switching from coal to gas, rising renewable energy production, and increased efficiency all have a role to play in reducing emissions. Increased supply in shale gas and the historically low natural gas prices are the key driver of falling carbon emissions, especially in the last 12 months. In May, gas surpassed coal at 32% of the electric power generation market, ending coal's 100 year reign on top of electricity markets. Let's remember the speed and extent of gas's rise and coal's drop: coal had 52% of the market in 2000 and 48% in 2008.

Apart from power production, reductions of carbon emissions from the transportation sector since 2007 are pushing down US Carbon emissions. First quarter 2012 transportation emissions declined by about 0.6%, compared to the same period in 2011. Rising fuel efficiency and some switching to lower carbon fuels are the main causes of falling transportation emissions.

For the EIA Monthly Energy Review, please click here.