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Which Government Policies and Other Factors Have Reduced U.S. Carbon Emissions?

The U.S. was the largest emitter carbon dioxide (CO2) until 2006 when China’s emissions exceeded the U.S.  U.S. CO2 emissions from the consumption of fossil fuels peaked in 2007 and have declined significantly over the past five years.  Refer to the following graph:

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Data Source: EIA MER Table 12.1. Carbon Dioxide Emissions From Energy Consumption by Source

 

Total U.S. CO2 emissions increased continuously since the early 1990’s and peaked at 6023 million metric tons (MMT) per year in 2007.  Increased carbon emissions were primarily due to an expanding economy and population, and increased consumption of coal & petroleum fuels up until the mid 2000’s.  Natural gas consumption was relatively flat during this period.  The development of innovative ‘hydraulic fracturing’ and ‘horizontal/branch’ drilling technologies led to a new boom in natural gas domestic production after 2006.

The reduction in petroleum and coal consumption has been impacted by a number of Federal policies or regulations since the mid 2000’s and the 2007-09 economic recession.  Recent Federal regulations, including the EPAct 2005EISA 2007, and the ARRA 2009 (Energy Efficiency and Renewable Energy Research  and Investment section), have successfully supported the expansion of many renewables and significant energy efficiency improvements.  Besides funding increased R&D of renewables and alternatives to petroleum fuels, these regulations have provided substantial subsidies and loan support for commercial development of clean energy technologies.  In addition, the Federal regulations expanded existing energy programs such as vehicle CAFE fuel efficiency standards and ‘renewable fuels standards’ that mandated biofuels blending.  

Other factors that have impacted and directionally reduced the consumption of coal and petroleum fuels are the U.S. economy and energy markets.  Prior to the 2007-09 economic recession, coal and petroleum consumption were increasing at 0.6% and 1.1% per year respectively (1997-2007).  The EIA AEO 2008 report projected continuous growth in all fossil fuels consumption between 0.5-1.0% per year through 2030.  During 2007-12 the average actual retail market prices of coal and petroleum fuels increased by about 30% and the cost for natural gas declined by 50%; considerably different than the AEO 2008 ‘reference case’ assumptions.  As a result of these net increased fossil fuels market costs, the 2007-09 economic recession and resultant increased unemployment, decreased GDP, and reduced Household’s discretionary income, overall U.S. energy consumption did not grow as projected, but declined 2007-12. 

The economic recession and relatively cheap natural gas had very significant impacts on reduced coal and petroleum fossil fuels consumption since 2007.  The level of these economic recession and market price impacts on fossil fuels consumption is complex and has varied between different U.S. End-Use Sectors.  The following analysis separates the most significant impacts of Federal energy policies, basic market economics, and the 2007-09 economic recession impacts on the consumption of U.S. fossil fuels and associated carbon emissions over the past five years.

Decline of U.S. End-Use Sector’s CO2 Emissions – The U.S. is made up of four primary End-Use Sectors (Residential, Commercial, Industrial and Transportation) that consume primary fossil fuels (coal, petroleum and natural gas) ‘directly’ and ‘indirectly’ by purchasing-consuming electricity from the secondary Power Sector.  The Power Sector consumes the balance of all U.S. primary fossil fuels.  The EIA routinely monitors all primary fossil fuels consumed by all End-Use Sectors and calculates the associated CO2 emissions.  Refer to the following table:

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Data Source: EIA MER Tables 12.1. thru 12.6. Carbon Dioxide Emissions From Energy Consumption: End-Use Sectors.  CO2 quantities are based on the 2007-2012 differences.  “Total Prim. FF” = ‘total primary fossil fuels’. 

During 2007-12 U.S. total carbon emissions declined by 730 MMT/yr. or by 12%.  All four primary End-Use Sectors had large CO2 emission reductions.  The largest reduction of CO2 emissions overall was due to the (secondary) Power Sector (-378 MMT/yr.). 

Factors That Have Reduced the Power Sector’s Emissions – The reduction in Power Sector CO2 emissions is due to a number of factors including reduced consumption or demand, expanded renewables power supply, and fuels switching from coal to cleaner and more efficient natural gas.  Analysis of all End-Use Sector’s power consumption (EIA data) found an average demand reduction of about 2% during 2007-12.  This End-Use Sector power consumption reduction appears to be due in part to energy efficiency improvements.  In recent years improvements have been made by increased buildings insulation, and increased major appliances (HVAC, refrigerators, etc.) and electronics (TV’s, computers, etc.) energy efficiencies.  The 2007-09 economic recession also reduced discretionary power demand of most End-Use Sectors.  The Industrial Sector experienced the greatest drop in power consumption overall largely due to the drop in durable goods demand-manufacture during and since the recession.

The major factors that have impacted Power Sector generation mix are expanded renewables power supplies and fuels switching.  Refer to the following table:

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Data Source: EIA MER Table 7.2a. Electricity Net General: Total (All Sectors).  ‘TWH’ = Terawatt-hour.  Biomass includes wood and bio-wastes. 

During 2007-12 substantial amounts of coal and petroleum were displaced by natural gas and renewables such as wind and hydroelectric power.  Although Solar PV grew by over 600% during the past five years, its contribution towards total U.S. power generation today is still very small (0.1%).  Of total added renewables power increases 2007-12, wind power clearly is the most significant. 

Government Policies and Economic Factors Impacts – Many Government energy regulations or policies and general economy factors have affected the Power Sector’s primary energy consumption and generation since 2007.  These include expanded ‘baseload’ renewable power (hydroelectric, biomass, and geothermal), ‘variable’ renewable power (wind & solar PV) and fuels switching to natural gas (NG).  In addition, declining total power demand has significantly contributed to reduced Power Sector carbon emissions over the past 5 years.  Refer to the following table:

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Data Source: EIA MER Tables 7.2a, 7.6, Tables 12.1 thru 12.6.and Tables 2.2 thru 2.6. 

Analysis of EIA data indicates the Power Sector’s coal consumption has been substantially reduced due to a combination of natural gas fuels switching, reduced power demand, and being displaced by baseload and variable renewables power.  While coal-to-natural gas fuels switching is clearly the largest source of Power Sector reduced carbon emissions (45%  of the total), followed by reduced demand (27%), variable wind power has also made very significant progress over the past five years in reducing Power Sector emissions (almost 25% of the total).  The major influencing factors on power generation mix changes are due to: the free market development of natural gas production, a combination of efficiency improvements and the recent recession, and Federal and State policies that have strongly supported expansion of wind power generation capacity.

All primary End-Use Sectors have also been impacted by fuels switching, increased energy efficiency, the 2007-09 economic recession, and various Government energy policies.  Unlike the Power Sector, determining or separating the affects of most Government energy efficiency policies from the economic recession impacts is extremely complex and generally not feasible to accurately estimate based on available data.  For these reasons, with the exception of the RFS2 (renewable fuels standard) and fuels switching, separating the actual energy efficiency improvements from the economic recession impacts was not initially attempted.  Refer to the following table:

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Source: EIA data used in the previous tables, plus MER Tables 3.7a,b,c, and Tables 6.2, 10.1 and 12.5.  Note: the RFS2 biofuels impact on net carbon emissions is based on the renewable energy contribution only.  

Analysis of available data indicates that following the reduced carbon emissions from the Power Sector, the combination of ‘increased energy efficiency + 2007-09 economic recession’ appear to have the second greatest impact on total reduced U.S. emissions.  Arguably, the vast majority of the Transportation Sector’s reduction in ‘Increased Efficiency + the 2007-09 Recession’ carbon emissions was due overwhelmingly to the existing CAFE standards (-206 MMT/yr.) over the past five years. Assuming most Transportation Sector carbon emission reductions are due to the CAFE regulations, reduces the total sum of ‘increased energy efficiency + 2007-09 recession’ to -87 MMT/yr. or about 12% of the total U.S. reduced emissions 2007-12.

Government Policies and Other Factors That Have Most Reduced U.S. Carbon Emissions – Based on the previous data and analysis the most significant policies and factors that have impacted U.S. carbon emissions have been identified.  Refer to the following bar chart:

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Data Sources: The previous tables and associated EIA MER data.  ‘Hydro/bio/geo’ = hydropower/biomass/geothermal. 

Coal-to-natural gas fuels switching is clearly the largest contributing factor towards reduced total U.S. carbon emissions over the past five years.  Assuming the Transportation Sector’s reduced petroleum consumption is only due existing to CAFE standards makes this Government policy the second largest factor towards reduced carbon emissions.  As previously described, separating other Government policies impacts from the economic recession’s impacts on U.S. carbon emissions is complex and difficult to accurately determine.  A very rough estimate of the split between ‘energy efficiency improvements and the economic recession’ impacts could possibly be a ration of 50:50.  This rough estimate indicates that the impacts of Government policy energy efficiency improvements could essentially be equal to the ‘added wind power’ benefits (or about -94 MMT/yr. each). 

Following the very significant carbon emission reduction impacts of ‘added wind power’ capacity over the past five years, the impacts of other Government policies such as ‘RFS2 biofuels’, ‘added hydro/bio/geo’ and ‘added solar power’, appear to be relatively small.

Future Federal Energy Policies Should Build on Past Successes – Based on the above analysis domestic natural gas production and consumption is clearly the most important factor, closely followed by CAFE standards, to reducing total U.S. carbon emissions.  Unlike most other clean energy supplies supported by various Government policies, natural gas production has recently increased to historic highs generally without significant Federal Government support.  Not included in this analysis are the impacts of recent and planned EPA regulations that will severely restrict the use of future coal power generation.  Both these actions will substantially increase the need for added future increased natural gas consumption and power generation.  Further increased wind power generation capacity will also definitely help displace existing coal power capacity in the future, but this increase in variable-renewable power supply will also soon require increasing levels of intermediate/peaking backup natural gas power capacity in order to maintain existing power grid reliabilities.

Increased CAFE standards will be critical to future U.S. reduced carbon emissions.  The recent new standards will further help reduce future Transportation Sector’s petroleum consumption.  These latest standards still need to be further increased beyond 2025.  CAFE standards have the duel advantage of reducing both U.S. carbon emissions and improving energy security by reducing the need for oil imports.  

Wind power past successes should also continued to be built on in the future.  This may require some combination of continued subsidies that should be phased out based on a ‘fixed’ schedule, and possibly adopting some form of a Federal ‘renewable power standard’ in the future.  To be reasonably successful the Federal Government should change their past-current random, non-specific approach to supporting future wind power expansion.  One possible option would be to update and fully complete a past study that covered developing a strategy to achieve 20% wind power, and make this more fully detailed plan the basis for a future expanded wind power energy policy or ‘renewable power standard’ and associated Government support.

Other (non-wind/solar) renewables should also be supported in future Government energy policies.  Renewables such as hydropower, biomass (wood & bio-waste) power and geothermal have the advantage of reliably producing electric power and directly displacing baseload coal power.  This reduces the growing need to intermediate/peaking natural gas power required for increased penetration of variable wind/solar PV power generation into existing power grids.

The current RFS2 renewable biofuels regulation should be critically re-evaluated.  Current ethanol and biodiesel is produced almost totally from corn and soybean feeds-stocks and consume about 80% fossil fuels during overall cultivation-production stages compared to the finished biofuel.  Until huge (cellulosic/algae) technology breakthroughs and innovations become an actual and reasonably economic reality, future expansion of RFS2 mandates appear to be very inefficient-wasteful towards reducing U.S. carbon emissions.

The combination of future priorities to further reduce U.S. carbon emissions, the EPA’s planned shutdown of substantial coal power, and the need for backup natural gas power as wind power levels increase will only add to the importance and need for further substantial increases in domestic natural gas production and consumption in the future.  The Federal Government needs to critically re-evaluate its recently developing regulatory policies that tend to put up barriers, rather than supporting future domestic natural gas production increases; and in an environmentally responsible manner.  This policy change consideration-evaluation should also include opening up Federal on-/off shore reserves to new natural gas future production.

John Miller's picture

Thank John for the Post!

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Discussions

J Elliott's picture
J Elliott on Apr 17, 2013 9:13 pm GMT

Your analysis shows that the U.S. has reduced its carbon dioxide emissions primarily by reduced consumption of fossil fuels and increased natural gas consumption.  Consumer behavior appears to be most influenced by cheap natural gas and power costs, more expensive gasoline and diesel, and the chronically slow recovery from the economic recession.  With the exception of natural gas aren’t the obvious solutions to further expanding these successful reductions in carbon dioxide emissions to further increase the costs of gasoline and diesel by imposing large carbon taxes on these fossil fuels, and continue to suppress the economy’s growth?

John Miller's picture
John Miller on Apr 17, 2013 10:35 pm GMT

JE, the combination of natural gas fuels switching, CAFE and efficiency + recession impacts account for 83% of the total reduction of U.S. annual average carbon emissions 2007-12.  This means that renewables only accounted for 17% of reduced carbon emissions.  The challenge to continuing this trend will be increased as the economy fully recovers from the 2007-09 economic recession and the U.S. GDP growth rate returns to normal levels of 3-4% per year (vs. about 2% in recent years).  All forms of energy consumption could increase back to the 1% per year level due to the ‘rebound effect’.  As far as establishing high carbon taxes on motor fuels to further discourage consumption, the new energy consumption tax impacts could suppress the economy and put it back into another recession if carried out too aggressively.  Motor fuels prices affect the costs of nearly all goods and services provided and consumed within the country.  Since 1970 the U.S. has been subjected to six economic recessions.  Half of these recessions were initiated by energy related causes (Arab OPEC oil embargo 1973-75, Iranian Revolution 1980-81 and Oil (Price) Shock 1990-91).

Rick Engebretson's picture
Rick Engebretson on Apr 18, 2013 12:18 pm GMT

The best Federal carbon and economic policy for over 80 years has been developing and protecting water resources. The Western US would be a different environment without visionaries of the past.

It is very sad to see loss of vision, context and scale, awareness and grattitude. Conflict between preservation and plunder is not new.

We don’t see what works until it is broken. The US has been working pretty well with food, energy, technology, environment, population, consumption levels. Fracturing the bedrock to flush prehistoric fluids is a Pandora’s box.

John Miller's picture
John Miller on Apr 18, 2013 4:13 pm GMT

The development of food, energy, technology, populations, etc. has relied primarily on fossil fuels over the past 80 years.  Over the past 80 years the U.S. has relied on an average of over 80% fossil fuels, with the largest source of renewables being hydropower and biomass (primarily wood and bio-wastes until recent years).  The mix of fossil fuels changed from primarily coal to cleaner and more economical petroleum during the 1930-50’s and now more towards cleaner burning and domestically plentiful natural gas.  Technology innovations have substantially reduced the harmful emissions from petroleum and natural gas over the years and made the use of these energy supplies the most efficient for doing useful work (producing food, fueling most technologies, etc.).  Nuclear was the next most successful low carbon energy source, which exceeded the largest renewable, hydropower, in the 1980’s and the total of all renewables in 1990.  Only by maintaining existing hydropower capacity over the years and the recent expansion of biofuels and wind power, have total renewables exceeded nuclear power in 2011.

With the exception of hydropower and wood/waste based biomass energy, other renewables have been very slow in their development (technology challenges and economics barriers).  Today, the most feasible means to replacing higher carbon intensity coal and possible significant petroleum (including ICE applications) is to produced and use natural gas during the interim until other non-fossil fuels energy sources become a feasible, economically sustainable and commercially available reality.

Nathan Wilson's picture
Nathan Wilson on Apr 19, 2013 2:45 am GMT

John, thanks for a great article.

Regarding how the government should continue to support wind power, I think the government should only single-out technologies for support when they are truely nascent, which on-shore wind is not.

‘renewable power standard’ is similarly too narrow.  If low carbon power is what we want, we should implement a “low carbon electricity standard”.  That way, regionally appropriate power mixes can be implemented, and we can push far beyond the 20-30% carbon-free targets that are affordable with wind.

John Miller's picture
John Miller on Apr 19, 2013 3:10 am GMT

Nathan, thanks for the feedback.  My reason for suggesting that the Government develop a feasible or number of feasible designs for greater penetration of wind power into existing power grids is to provide some reasonable direction on where and how large new wind farms should be located-installed in the longer term around the country.  As you are aware, the overall transmission & distribution systems will be a significant part of the ultimate carbon-free solutions and will likely make up a very large percentage of the required capital costs.  Analysis of some existing and recently proposed wind farms indicates that the locations are less than optimal and will have less than maximum capacity factors.  Besides increasing the level of needed backup power (natural gas, nuclear or baseload renewables; hydro, geothermal, etc.), the less than ideal installation locations increase installed costs significantly more than would be required if the wind farms were located in more ideal regions around the country.

We have lots of challenges ahead to substantially grow low/no carbon energy supply in the future.  Let’s keep diligently working the issues towards the optimal solutions.

Nathan Wilson's picture
Nathan Wilson on Apr 19, 2013 4:17 pm GMT

That’s a good point.  In my region of the country (Oklahoma), wind farm planning has been relatively easy and successful.  The NREL maps show better resources toward the (sparcely populated and flat) western part of the state, so my utility (OG&E) and transmission authority (SPP) strung power lines in that direction, then bingo, that’s where developers put the wind farms.  In Texas also, I believe the state government/PUC has designated COMPETITIVE RENEWABLE ENERGY ZONES to help guide wind farm developers and transmission planning.

But, I have seen photos of other regions where bad wind farm placement has destroyed scenic landscapes (ocean-front or ridge-top), so maximizing capacity factor is not the only thing to consider.

Wind power from the heartland can be transmitted to the east coast for less than the cost of local production (and much less than the cost of off-shore wind).  But the needed transmission lines have a large critical mass, anything less than a 10 GWatt commitment and it’s not worthwhile.  Utilities are not eager to commit, since they know that it is cheaper to keep burning fossil fuel, and are unsure whether ratepayers are willing to pay extra for clean energy.

Peter Lang's picture
Peter Lang on Apr 22, 2013 11:41 am GMT

John,

Thank you for this interesting article.

<blockquote> The reduction in Power Sector CO2 emissions is due to a number of factors including reduced consumption or demand, expanded renewables power supply, and fuels switching from coal to cleaner and more efficient natural gas.</blockquote>

 I think the contribution of wind and solar power to the emissions reduction may be overstated.

 The second table in the article shows that, from 2007 to 2012, electric power net generation by wind and solar power increased by 110 TWh/yr and emissions decreased by 96 Mt/yr.  That means the analysis assumes these intermittent renewables are 100% effective at reducing emissions.  That assumption is not correct.  The calculations assume that 1TWh of wind and solar generation abates the CO2 emissions from 1 TWh of fossil fuel generation.  However, whereas 1 TWh of wind and solar does substitute for 1TWh of generation by other sources, it is not fully effective at displacing the emissions, for a number of reasons.  There are many papers on this matter and, as many would argue, the stuidies that have analysed empirical data are the more reliable.  Two recent analyses of empirical data are:

 Joseph Wheatley (in press) <i>’Quantifying CO2 savings from wind power: Ireland’</i>

http://docs.wind-watch.org/Wheatley-Ireland-CO2.pdf

 Daniel T. Kaffine, Brannin J. McBee, and Jozef Lieskovsky (2013) “<i>Emissions Savings from Wind Power Generation in Texas</i>”, IAEE, Volume 34 – Number 1

 

http://www.iaee.org/de/publications/journal.aspx

 ForIreland’s EirGrid in 2011, wind generated 17% of electricity and was 53% effective at reducing emissions.  Effectiveness decreases as wind’s proportion of electricity generation increases.  [I think this is a good analysis and good paper on the subject]

 ForTexas, wind generated 4.7% of electricity and was 82% effective at reducing emissions.

 

 The Kaffine et al. abstract says: ”<i>The environmental benefits from emissions reductions in ERCOT fail to cover government subsidies for wind generation. </i>”

 

 It’s interesting to estimate the abatement cost with wind power.  I don’t know the total amount of subsidies so I’ll assume $50/MWh.  The claimed emissions avoided (wind’s share) are about 93 Mt/a; that is by 106 TWh/a of wind generation.  Therefore, the claimed emissions avoided were = ~0.9 t/MWh.  Using these figures the abatement cost is about $55/t CO2, which is more than ten times the EU carbon price.  If wind ius only 80% effectgive (as for Texas ERCOTT), the abatement cost would increase to $70/t CO2.   These rough estimates of the abatement cost are consistent with the Kaffine et al. abstract statement:

 <blockquote>The environmental benefits from emissions reductions in ERCOT fail to cover government subsidies for wind generation. </blockquote>

 

 

John Miller's picture
John Miller on Apr 23, 2013 1:10 am GMT

Peter, thanks for the feedback and added data/references.  I agree the solar and wind contribution may be overstated.  Unfortunately the added detailed data breakdown is not available through the EIA.  As you are probably aware, these renewable power sources require peaking natural gas power backup for varying periods each week.  Even though the net natural gas backup power generation could be zero, the hot standby carbon emissions are significantly greater than zero.

Your estimated carbon costs of up to $70/MT agree very well with some past analysis I did to estimate the full amortized cost of replacing coal with natural gas/wind and a combination of nuclear has been consistently in the $80-$100/MT range.

Peter Lang's picture
Peter Lang on Apr 23, 2013 1:24 am GMT

John,

Thank you.  By the way, the figures of $50/MWh for subsidies for wind energy is a WAG.  I have not idea what it would be in the USA.  I just pulled a round figures for the purpose of illustration. 

Readers my be interested in this recently published, excellent paper by Melbourne engineer and consultant, Graham Palmer.

Household Solar Photovoltaics: Supplier of Marginal Abatement, or Primary Source of Low-Emission Power?” 

http://www.mdpi.com/2071-1050/5/4/1406

Many of the hidden costs of PV he exposes also aply for wind energy.  Using his method I calculate the CO2 abatement cost with PV at $600/tonne CO2.

I K's picture
I K on Apr 23, 2013 11:15 am GMT

What would happen if a subsidy was introduced to connect natural gas to homes that currently do not have natural gas especially in the colder states? 

How much energy does an average american house use for heating? Perhaps 50MWh?

Well that means either 55MWh of natural gas through a boiler or 150MWh of coal via electricity.  So a single conversion sees a reduction in primary energy consumption of 100MWh. you would need to install a 40KWp solar array to achieve the same reduction. So 100k dollars on solar pv or perhaps as little as 1000 dollars on converting an electricity heated house to a gas heated house

 

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