Which Government Policies and Other Factors Have Reduced U.S. Carbon Emissions?
- Apr 18, 2013 2:00 am GMT
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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:
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 2005, EISA 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:
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:
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:
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:
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:
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.