Dive Brief:
- New EPA regulations targeted to cut U.S. CO2 emissions 30% by 2030 can most effectively be achieved, according the U.S. Energy Information Administration (EIA), by substituting electricity generated from combined-cycle natural gas plants, renewables, and nuclear for the coal plants that accounted for almost 40% of energy-related CO2 emissions in 2012.
- EIA’s Annual Energy Outlook 2014’s base case scenario, which did not consider the new EPA regulations’ state-specific and electricity market-specific targets and guidelines, predicted a 12% increase in U.S. electricity sector emissions in 2025 as a shift to natural gas-generated electricity causes the fuel's emissions share to grow from 24% to 27%.
- The Annual Energy Outlook 2014’s GHG10 scenario, which assumes a $10 per metric ton 2015 fee on emissions, projected CO2 emissions to be 16% lower in 2025, and the GHG25 scenario, which assumed a $25 fee and high oil and gas resources, put emissions 49% lower.
Dive Insight:
EIA assumes natural gas would lower emissions 40%, an assumption disputed by those who include the methane emissions from production and delivery in the calculation.
The EIA scenarios' assumptions do include New England’s Regional Greenhouse Gas Initiative and California’s Assembly Bill 32 CO2 emissions reduction programs and all finalized environmental rules, such as the Mercury and Air Toxics Standard.
The EIA scenarios predict 2040 electricity sector CO2 emissions can be cut from between 36% and 82%, depending on many assumptions, and concludes “the electric power industry is typically the most cost effective sector to achieve reductions in response to economy-wide CO2 fees…”
Use of natural gas would increase in 2015 with the EIA-postulated CO2 fees but level in the 2025 to 2030 period when nuclear and renewables become a bigger part of the mix due to increasing fees. Without CO2 fees, the high oil and gas resources scenario results in higher emissions because of the increased use of cheap natural gas in preference to nuclear and renewables.
