The Details

After 2008 witnessed a US emissions fall of almost 3% (due mostly to oil demand decreasing in response to higher prices), all fossil fuels are contributing to this year’s emissions drop. Coal has the biggest drop, now estimated to be ~6.9% due to lower industrial demand and low-priced natural gas replacing some coal in the electricity sector. Oil demand is revised downward from June to a fall of 3.3% for the year. And natural gas was revised downward to a consumption level 2.3% below 2008. All of these drops translate into energy-related emissions that are 4.3% below last year.

1990 Levels Not Far Away

Such a drop would make 2009 emissions just ~6.5% above 1990 levels and already 7.5% below 2005 levels. It would make 1990 emissions levels within reach by 2015 and the Waxman-Markey goal of 17% below 2005 achievable by 2017 (rather than 2020) by just reducing emissions 1% per year going forward.

Room for Further Reductions in 2009

And I believe the EIA may still underestimate 2009 reduction in fossil fuel energy demand. Its prediction that oil demand will fall 3.3% is slower than the current consumption decrease rate above 5%. And coal demand is also falling faster than 8% so far this year (rather than the ~6.9% EIA predicts). Continuing current demand trends could send emissions down more than 5% in 2009.

Looking Ahead

The EIA predicts some rebound in energy demand in 2010, but only a fraction of this year’s drop. In fact, the .8% expected recovery in electricity demand in 2010 could be provided in full by wind, solar, and geothermal rather than switching the fossil fuel plants back on.

Bottom line: US greenhouse gas emissions are falling quickly in 2009 and bringing us within close reach (a few years) of 1990 levels. This fact means that the Senate can comfortably promote Waxman-Markey’s goal of 17% below 2005 levels by 2020 or even strengthen it back to 20% below 2005 levels by 2020. We need their leadership to get climate legislation to the President’s desk. Renewable energy and efficiency are ready to simultaneously drive economic growth, create jobs, and lower our nation’s emissions. I will keep you updated on progress as it happens.

Onwards in the Sustainable Energy Transition-

Crude oil supplies continue to look questionable as the recovery from Ike is very slow. The Mineral Management Survey reported that only 7% of Gulf oil production has been restored. This opens the prospect of another 6 million barrel fall in inventories to ~185 million barrels and puts the low levels at the beginning of the year within striking distance.

The other development I’d like to explore today is an article on a recent report projecting extremely swift growth for the solar industry. Nomura Securities’ puts together a Top 10 ranking of solar producers each year, with this year marked by a rapid rise of Chinese manufacturers as Japanese firms slow production on the scarcity of poly-silicon feedstock. Their report cites massive expansion plans by firms such as Sharp and Showa Shell Solar to levels greater than 1 GW each in 2010 and 2011, respectively. They predict rapid solar production growth ~60% per year to continue for several years, making the solar market of 2013 a 20 GW market similar to the wind power market of 2007. If they are right, solar and wind can significantly chip away at the electricity market share of fossil fuel competitors.

But such expansion will require a more competitive price for solar to come to fruition. The report predicts solar price reductions partly due to a continued market shift within the solar industry to thin-film panels which require less poly-silicon, from thin-film’s current ~10% share to ~50% by 2013. I’ll definitely be rooting for such quick growth, as they would help make our dreams of climate stability much more achievable.

Onwards in the sustainable energy transition-

The situation for natural gas continues to mirror that of oil. It is very high compared to last year, but has fallen significantly since early July. The weekly natural gas report was in line with the recent trend of rising inventories on the back of increased domestic production that offsets import reductions from both the global LNG market and the pipelines of Canada. Supplies look to be below last year’s levels by ~10% though they should be ample to handle an average winter.

If the dollar continues to strengthen we could see a bearish trend develop further. But if you are planning your driving schedule for the year ahead, I would recommend not banking on pump prices falling much below $3.50 and actually anticipating the potential for new record prices if this winter is an especially cold one. Efficiency is always a great hedge, whether it means carpooling, weatherizing one’s home, or using the bicycle for more daily trips. Let’s keep making progress in the Sustainable Energy Transition.