Gas to Overtake Coal This Year

Coal has been the leading source of electric power generation by a huge margin for at least the last 65 years (and probably before, but that’s how far back the Dept. of Energy data series goes). But today the Energy Information Administration announced that it appears natural gas will overtake coal this year as the leading source of electric power generation> Here’s what the DoE chart looks like:

Gas 1

Now, the reason natural gas has overtaken coal is because the price of gas has fallen drastically from ten years ago (from about $14 TCF to less than $2 TCF right now). Thank you fracking. The price comparison just below is misleading, because although coal is still nominally cheaper on a BTU output basis, advanced combined-cycle natural gas plants can generate more electricity than coal for the same BTU output, so gas-fired electricity is actually cheaper than coal electricity in many cases.

Gas 2


Keep two things in mind. First, to repeat—fracking made this happen, which of course Bernie and the environmentalists want to stop. Second, most of this occurred for market reasons, rather than a regulatory diktat from Washington. (There are some regulatory factors at work, but the availability of cheap gas swamps them.)