Fracking in places like Pennsylvania’s Marcellus Shale pushed gas to the top, helping to keep U.S. carbon emissions at 1992 levels according to federal reports.
(for more on fracking, Pittsburgh and more visit MatthewPitzarella.com)
Low prices for natural gas present challenges for the engineers, scientists and entrepreneurs in the natural gas industry (challenges they certainly seem up for), but those low prices also brought on “near-record low electricity prices” for consumers according to the United States Federal Energy Regulatory Commission’s (FERC) Office of Enforcement Division of Energy Market Oversight’s latest report. This also presents challenges for the men and women who work in the incredible coal industry as well.
According to the authors:
“Overall in 2016 there were record low natural gas prices and near record low electricity prices. Although natural gas production fell for the first time since 2005, flat demand due to above average winter temperatures at the start of the year and high natural gas storage inventories contributed to the low prices. The low natural gas prices further incentivized gas-fired generation in 2016, and for the first time in history, natural gas’ share of total electricity generation output overtook coal’s on an annual basis.”
The report touches on at how natural gas producers have responded to lower prices, by investing less dollars into new wells and thereby producing less gas, along with other interesting market dynamics at play:
“During 2016, U.S. natural gas production fell 2.5 percent, averaging 72.3 Bcfd, the first year-over-year drop since large scale shale production began in 2005. However, as oil prices recovered beginning in the first quarter of 2016, natural gas production rose 11 percent in the oil and natural gas liquids rich Bakken Shale in North Dakota, Marcellus and Utica shales in Pennsylvania, West Virginia, and Ohio, and Permian Basin in Texas and New Mexico. These gains were offset by an estimated 14 percent drop in conventional production, and by production declines in the Eagle Ford Shale in Texas, the Haynesville Shale in Texas and Louisiana and the Niobrara Shale in Colorado and Wyoming.
Natural gas production from the Marcellus and Utica shales accounted for 30 percent of the U.S. total in 2016, due to the prolific nature of these formations, relatively low production costs, and proximity to the large Northeast markets. In addition, new pipeline infrastructure reduced bottlenecks allowing additional gas to reach the demand centers. Total U.S. production is poised to rebound slightly in 2017, driven by a projected 26 percent increase in oil and gas exploration and production investment in North America from 2016 levels.”
This analysis comes on the heels of another report from the International Energy Agency or IEA indicating a “striking drop in carbon pollution in the US, where emissions fell back to what they were in 1992” according to Environment Correspondent Pilita Clark of the Financial Times:
“This is a very welcome development,” said Fatih Birol, IEA executive director. “It appears we now have the first signs of an established trend of flat emissions as a result of natural gas replacing coal in major markets and renewables becoming more and more affordable.”
To read the full IEA document check out their posting “IEA finds CO2 emissions flat for third straight year even as global economy grew in 2016.”
“With the appropriate policies, and large amounts of shale reserves, natural gas production in the United States could keep growing strongly in the years to come. This could have three main consequences: it could boost domestic manufacturing, supply more competitive gas to Asia through to LNG exports, and provide alternative gas supplies to Europe. US and natural gas prospects will be explored in details in the next World Energy Outlook 2017.”