How the recession reshaped U.S. electricity production

November 24, 2010


Electricity generation in the United States fell 4.1 percent in 2009, the biggest drop in 60 years, according to a new report from the U.S. Energy Information Administration.

The survey offers a snapshot of the impact the recession had on energy markets and shifts in the power supply as coal costs rose and natural gas prices plummeted. Industrial demand for electricity, for instance, dropped by 9.1 percent in 2009 to the lowest level in 22 years.

Expectations that Congress would pass legislation to impose a cap on greenhouse gas emissions may have also encouraged a move away from carbon-intensive electricity production, the report stated.

Electricity produced from coal-fired power plants fell by 11.6 percent in 2009 from the previous year while generation from natural gas increased by 4.3 percent, according to the report.

“In 2009, annual average natural gas wellhead prices reached their lowest level in seven years,” the report said. “Increased supply due to the availability of shale gas, coupled with mild winter temperatures and higher production, and storage levels, and significant expansions of pipelines capacity also worked to put downward pressure on natural gas prices.”

As Southeastern states switched to natural gas, coal’s share of the nation’s electricity production fell to its lowest level since 1978.

That may have been bad news for coal companies but there was an environmental payoff in a 34 percent drop in emissions of the pollutant nitrogen oxide and a 24.7 decline in sulfur oxide emissions from coal-fired power plants. Overall, NOx and SOx emissions fell 28.1 and 23.8 percent, respectively.

Federal stimulus funding for renewable energy, meanwhile, helped boost wind energy production by 33.5 percent, bringing wind’s share of U.S. electricity generation to just under two percent.

Overall, renewable energy generation from wind, solar and biomass grew 14 percent last year.

But as coal operators have found, continuing low natural gas prices — currently around $3.77 per million BTU — will affect the competitiveness of solar and other clean energy sources.

“If you have natural gas at $12 bucks and petroleum prices at $150 bucks (a barrel), a lot of renewable energy make sense,” Theodore F. Craver, Jr., the chief executive of Edison International, told me in a recent interview. “That is the biggest signal that puts the whole equation into question. Because the relative cost of many of the technologies out there is so much in excess of standard traditional way of producing electricity.”

Photo: Todd Woody

One comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

[…] SayBloombergBooming US Gas Industry Becoming an American Energy ExporterHuffington Post (blog)Reuters Blogs (blog) -Bloombergall 102 news […]

Posted by Sunraynews | Top US news | Report as abusive

Ahhhhhh, man’s going to save the world, again.

Seen any studies on the future effect of sucking the energy out of the atmosphere with windmills? See First Law of Thermodynamics! I haven’t.

And how will these local energy drains affect global wind patterns and temperature? I haven’t seen studies on that, either.

I imagine that a wall of windmills in California, not to mention building them on 1/3rd of China, will cause several globally (at least to humans) harmful changes.

Seems as ignorant as thinking electric cars reduce greenhouse gases, when, in actuality, they merely SHIFT the pollution source from car exhaust to coal fired power plant’s increased exhaust (greater load to charge the car batteries).

Posted by RobA | Report as abusive

[…] the moment, the cost of electricity is lower than it was at this time last year for most consumers. The average price per kilowatt hour […]

Posted by Smart Investing Daily – The Best ETF for Your Portfolio « Jared A Levy | Report as abusive

Unemployment Benefits: The 99ers…

Thank You ! I have added a trackback to your Article on my Website :)…

Posted by | Report as abusive