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-

ACES Act caps US greenhouse gas emissions

The passed bill would establish a cap-and-trade system to achieve lower US emissions levels by allowing institutions to trade their emissions permits so that the most efficient reduction projects are executed. This market-based incentive is estimated to be cheaper than mandating all institutions to lower emissions the chosen percentage without regard to each institution’s costs. The cap, beginning in 2012, is set for 2020 emissions to equal 17% below 2005 (or ~4% below 1990) and then 2050 emissions at 83% below 2005 (~80% below 1990). The original bill draft called for 20% below 2005 by 2020 but was relaxed as a compromise to shore up support among legislators from coal states.

The sharp drop in emissions during 2008-09 already has emissions at 6% below 2005 levels, so 17% below seems unaggressive to me. I hope advances in solar, wind, and efficiency help persuade legislators to lower the cap at least back to 20% below 2005 during the bill’s continued development or after it becomes law.

Electricity Emissions Continuing to Plunge

The EIA just published its preliminary estimate for March electricity generation, and the numbers are even more climate-friendly than last month. The most notable change is the large substitution from coal to natural gas due to the recent lower prices for natural gas. Coal use fell 14.5% from March 2008 while natural gas consumption increased 5%. More good news for the climate were a 1.2% increase in hydroelectric power generation, a .3% increase for nuclear, and a 4.8% decrease for petroleum liquids.

Year-to-date, 2009 coal consumption for electricity is down a whopping 10.2% (much more than the EIA projection of ~2.5%, as I wrote last week would probably occur). Natural gas use for electricity has fallen .8%. US emissions could fall as much as 5% in 2009 (to 7.5% below 2005 levels) if current trends continue. But for now, I’ll stick with the more conservative projection that they will fall more than 3%.

Here’s to swift passage of climate legislation to ensure emissions continue falling during our economic recovery in the 2010s.

Onwards in the Sustainable Energy Transition-

The Details

The EIA expects oil consumption to fall 3% in the US to a little more than 18.8 million barrels per day. Most of the reduced demand is projected to come from lower use of distillates (mainly diesel) and jet fuel. For coal, the EIA predicts consumption to fall ~2.6% based on much lower industrial and coke plant demand and a substitution to natural gas for electricity generation. Even after taking up some slack from coal, natural gas consumption is expected to fall 1.9% (.1% further than estimated in April). Adding all these decreases together produces emissions that are 3% lower than in 2008.

Room for Further Reductions

I see room for emissions to fall even further than 3% as petroleum demand is currently more than 5% below last year (not just 3%) and substitution from coal to natural gas may drive a huge drop in coal demand of 4+% (compared to their ~2.6% estimate).

Some Background on Natural Gas Substitution of Coal

The report included a supplement on coal-to-natural gas substitution which helped me understand the situation more clearly. Since natural gas power plants are more efficient (less heat needed per kWh generated), natural gas prices that are higher than coal prices by 33% or less are often competitive. While most coal demand is guaranteed through long-term contracts, as much as 10-20% of some regional electricity markets can switch from spot market coal to spot market natural gas purchases. A natural gas price of $4 per MMBtu is more economical than a coal price of $3.25 per MMBtu in many efficient combined cycle natural gas plants.

Bottom Line: US greenhouse gas emissions from energy are now predicted by the EIA to decline faster than the swift fall of 2008. For us to continue this trend in 2010 and beyond, we must base our economic recovery on efficiency and renewable energy deployment (through federal climate legislation and a Renewable Electricity Standard).

I’ll keep you updated as progress is made-

The projected slide in US GDP got deeper than their January report, at 2.7% rather than 2%. This translates into lower energy consumption and lower combustion of fossil fuels. US petroleum use is expected to fall ~2.4% (.46 million barrels per day (Mbd)) in 2009, less than half of the 5.8% (1.2 Mbd) drop in 2008 when prices were so high. But consumption declines accelerate for coal and natural gas, dropping ~1.3% for both in 2009 compared to a .5% drop and small growth in 2008, respectively.

Carbon Dioxide Emissions

The latest estimates based on EIA energy consumption data are that US carbon dioxide emissions dropped ~2.8% in 2008. And emissions look poised to fall more than 2% again in 2009. Such a drop would put 2009 emissions at less than 10% above 1990 levels, putting 1990 levels within reach by 2016, if not before. Emissions would need to fall an average of 1.3% per year to accomplish such a goal, made possible in large part by cutting our use of expensive foreign oil.

The path would need to be paved by efficiency upgrades along with solar and wind deployment to provide the new electricity needed in 2010 and beyond to power an economic recovery in America. The current stimulus package appears ready to make such a trajectory reality. Let’s make it happen!

Based on my estimates that US greenhouse gas emissions will fall in 2008 by more than 1.5% (derived from US EIA Short Term Energy Outlook data), 2008 emissions are ~14% higher than in 1990 (6.16 Gt net carbon dioxide equivalent emissions vs. 5.41 Gt). To reduce emissions to the 5.41 Gt level in 2020 we will need to reduce emissions an average of 1.1% per year. Obama/Biden and McCain/Palin, please keep that number in mind. We can make the sustainable energy transition a relatively smooth one by starting with a 1.1% per year reduction in 2009. This is a big change from the 1990s when our emissions grew ~1.6% annually, but in line with continued progress in the 2000s since our emissions have essentially flat-lined over the last eight years (thanks largely to higher fossil fuel prices).

What would such reduction look like? There are many routes to -1.1%, but a strategy that co-mitigates our dependence on foreign oil would focus on lowering oil consumption. A scenario that seems plausible would be to reduce oil demand by 2% per year, coal by .5% per year, and to allow only tiny growth in natural gas use of .2% annually. By 2020, such oil demand reduction would free us from our current dependence on precarious imports from Mexico, Norway and Russia (geologically declining production) as well as Venezuela and Iraq (where politics and above-ground factors threaten production). It would require an acceleration in fuel efficiency progress (gaining market share for plug-in hybrid electric vehicles along with improvements in bike/ped and transit infrastructure should do the trick). Filling the gaps of lower oil and coal consumption would be a mix of efficiency and wind, solar and geothermal energy substitutes. Other scenarios that would work include faster reductions in oil consumption (this year we reduced demand by more than twice the 2% rate) or allowing coal to grow but making it CCS coal (where the carbon is captured and stored — this technology may be available by the second presidential term or soon afterward). Success at the end of the first term would put US emissions at ~5.95 Gt carbon dioxide equivalent in 2012 and then ~5.7 Gt by the (potential) second term finale in 2016.

In sum, the sustainable energy transition does not have to be a scary prospect for the next president. It can be started by reducing greenhouse gas emissions by just 1.1% per year (a rate slower than this year’s 1.5+%) and doing so can simultaneously help solve our crippling dependence on foreign oil, create jobs in renewables and efficiency, and put our economy in the enviable position of driving global technological progress in the multi-trillion dollar energy sector. Getting started in 2009 helps provide some insurance in case further study and experience shows that NASA scientist Jim Hansen is right that we need to keep GHG concentrations below 450 parts per million (from today’s ~385 ppm) to prevent runaway melting of Greenland and western Antarctica in the decades ahead.