Natural gas overtook coal as the top source of U.S. electric power generation for the first time earlier this spring, a milestone that has been in the making for years as the price of now abundant natural gas slides and new regulations make coal more risky for power generators.
About 31 percent of electric power generation in April came from natural gas and 30 percent from coal, according to a recently released report from the research company SNL Energy, which used data from the U.S. Energy Department. Nuclear power came in third at 20 percent.
A drilling boom that started in 2008 has increased U.S. natural gas production by 30 percent and made the United States the world's biggest combined producer of oil and natural gas. Hydraulic fracturing, or fracking, has allowed energy companies to tap huge volumes of natural gas trapped deep underground in shale formations.
That has driven the price of natural gas sharply lower to levels about a third of what they were just 10 years ago.
Power companies have been installing more natural gas turbines at their plants as they make them more flexible and retiring some older coal-fired facilities. They have long switched between natural gas and coal, depending on commodity prices. However, new regulations that aim to restrict the emission of greenhouse gasses, and the risk that more are on the way, have added pressure to make the switch.
The burning of natural gas produces carbon dioxide and nitrogen oxides, but far less than coal.
The Obama administration next month is expected to complete a so-called Clean Power Plan intended to cut earth-warming pollution from power plants by 30 percent by 2030. Arkansas needs to reduce its carbon dioxide emissions by 44 percent by 2030.
The rule will set the first national limits on carbon dioxide coming from existing power plants and set in motion one of the most significant U.S. actions ever to address global warming. The United States limits emissions of arsenic, mercury and lead pollution from power plants, but there are no national limits on carbon pollution from power plants.
Congressional Republicans have vowed to block the rule and some Republican governors have said their states will not comply.
These regulatory and price changes have begun to play out in usage data.
Federal data show that in April, the amount of electricity generated with natural gas climbed 21 percent compared to April 2014, while the amount generated with coal fell 19 percent.
In April 2010, 44 percent of electric power generation came from coal and 22 percent from gas, according to SNL Energy.
The amount of coal and gas used will continue to vary depending on price.
The U.S. Energy Information Administration said in a May report that it expects the level of coal-generated electricity to rebound as natural gas prices rise later this year and coal-fired plants return from spring maintenance. Overall, the agency expects about 36 percent of total U.S. electricity generation to come from coal in 2015 and 31 percent to come from natural gas.
Natural gas futures rose to a four-week high Monday on speculation that a surge of late-July heat will stoke demand for the power-plant fuel, slowing stockpile gains. Natural gas for August delivery rose 9.4 cents, or 3.4 percent, to $2.864 per million British thermal units on the New York Mercantile Exchange, the highest settlement since June 16. Natural gas sold for more than $12 per million British thermal units in 2008.
The lower price for natural gas has slowed the drilling industry in Arkansas. There were only four drilling rigs exploring for natural gas in Arkansas last week, according to oilfield services company Baker Hughes Inc. There were about 60 rigs in operation in the Fayetteville Shale when drilling peaked in 2008.
Companies operating in north-central Arkansas have continued to take natural gas from aging wells but have moved drilling rigs to other shale formations that contain oil and natural-gas liquids, such as ethane and butane, because they are more profitable than the dry gas abundant in the Fayetteville Shale formation.
Natural gas-fired power plants in Arkansas have more megawatt capacity than coal plants, primarily because of the giant Union Power Station natural gas facility near El Dorado. The Union Power Station has a capacity of 2,200 megawatts. Combined, the 10 natural gas power plants in the state have the potential to generate more than 5,700 megawatts of electricity, compared with the state's five coal plants that can generate more than 5,100 megawatts of electricity.
Three Entergy Corp. subsidiaries have reached an agreement to buy the El Dorado natural gas plant -- Entergy Arkansas will buy a quarter of the plant, Entergy Texas will buy a quarter and Entergy Gulf States Louisiana will buy half the plant.
The Union Power Station plant was the most powerful natural gas-fired facility of its type in North America when it opened in 2003. On a day of average electricity demand, Union Power Station theoretically could light all of Arkansas' 2.4 million homes, a former plant manager said in 2009.
Environmentalists have proposed that some of Arkansas' coal plants be converted to natural gas, but the idea has been rejected by coal plant owners.
In 2012, Southwestern Electric Power Co. was asked to convert the coal-fired Flint Creek plant at Gentry to run on natural gas. But it would be more expensive to convert the plant to burn natural gas than it would be to install scrubbers to help clean the emissions from Flint Creek, said SWEPCO and Arkansas Electric Cooperative Corp., which share ownership of the plant.
SWEPCO's president also said in testimony before the state's Public Service Commission that a new natural gas plant would be 60 percent more efficient than a converted Flint Creek plant.
Information for this article was contributed by Tom Murphy of The Associated Press and David Smith of the Arkansas Democrat-Gazette.
A Section on 07/14/2015
Print Headline: Natural gas tops coal for electric