Natural Gas Tops Coal As Leading Source Of U.S. Electric Power

Low gas prices and stiff EPA regulations have accelerated the retirement of coal-burning power plants across the Midwest. Economic pressures may soon force Texas utilities to follow suit.

Coal burning power plant in Limestone County

New data from the U.S. Department of Energy reveals that, earlier this year, natural gas overtook coal as the top source of U.S. electric power for the first time ever. Research company SNL Energy analyzed the data, which revealed that natural gas drove 31 percent of all U.S. electric power generation in the U.S. in April, compared to 30 percent derived from coal.

It’s a dramatic shift from just five years ago, when coal accounted for twice as much power generation as gas.

“April is kind a low-price period of the year for natural gas,” says Steve Piper, SNL Energy’s associate director of energy fundamentals. “Coal is especially vulnerable to displacement, and given the trends in retirements of coal-fired generation and the economics, I guess you could say it was probably right about due.”

The development follows years of low gas prices, along with EPA regulations that make coal more risky for power generators. Those regulations have sped up the retirement of coal-burning power plants across the Midwest. Many of those regulations have yet to take effect in Texas, as the state continues negotiations with the EPA on how to implement the new rules.

“At the same time,” Piper says, “the economics of cheap natural gas in Texas are displacing some coal plants, and they will come under increasing pressure.”

Texas leads the U.S. in natural gas production, according to the U.S. Energy Information Administration. The state is also the nation’s largest consumer of coal. 

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