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A new analysis of US carbon dioxide (CO2) emissions received wide media attention last week. Preliminary findings from the Rhodium Group showed that after three years of decline, US CO2emissions had the largest single-year jump in two decades last year with an increase of 3.4 percent.

The news prompted some observers to question the role of natural gas in helping to drive future emissions reductions. “New GHG Findings Clash With Industry Defense of Gas As a Climate Strategy,” wrote InsideEPA. Utility Dive called the report a worrying reversal for utilities, “raising questions about whether its recent formula for emissions reductions has outlived its usefulness.”

However, there is a key element of this story that has not been covered, one which I will dig into here. In looking at the data from 2018, it becomes clear that the primary reason for the increase in carbon dioxide emissions in 2018 is increased energy use associated with weather and economic growth. Natural gas played a considerable role in meeting these increased energy needs, and it is important to note that overall emissions are still 11 percent below 2007 levels. This begs the question: What would our CO2 emissions look like without natural gas helping to meet our growing energy needs?

What happened in 2018?

Simply put: Temperatures were significantly colder in the winter and considerably warmer during the summer. As a result, Americans used more energy, which caused CO2 to increase year-over-year.

Even as the ball dropped, we saw the makings of a brutal winter. The New Year opened with a bomb cyclone and record cold temperatures in dozens of cities. Based on heating degree days, a measure of heating requirements, January through March of 2018 was 14 percent colder than 2017. These frigid temperatures were felt across the US for longer than usual, making, April, typically the beginning of spring in many areas, the coldest in two decades for the continental US.

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Degree days are a measure of heating and cooling requirements. The higher the value, the more intense the heating or cooling requirements. Increases from 2017 to 2018 suggest significantly higher heating and cooling requirements. Source: NOAA

As a result of this nation-wide chill, heating demand spiked. The US set a single-day record for natural gas use as Americans tried to keep their homes and businesses warm. Residential sector energy consumption increased by 15 percent and residential CO2emissions climbed 14 percent for the period of January through April in 2018 when compared with one year prior.

Similarly, the summer was much warmer than usual. The US posted 15 percent more cooling degree days from May through August compared with the same period in 2017. As a result, cooling requirements spiked. During the same period, electric power generation was 4.5 percent higher than 2017, and natural gas use for electric power set monthly records in July and August.


Economic growth also contributed to rising emissions

Meanwhile, economic growth was strong. The Bureau of Economic Analysis showed strong economic growth in the second and third quarters. More people were driving, flying on airplanes, shipping more goods and industrial activity was up.

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As a result, US petroleum consumption climbed as consumers and businesses used more diesel and jet fuel. (Gasoline demand is projected to have declined slightly.) The Energy Information Administration’s short-term outlook forecasts that petroleum CO2emissions increased two percent in 2018.


The US power sector’s CO2 emissions increased, but structurally it continues to decarbonize

The US likely used a record amount of electricity in 2018 according to initial projections from the US Energy Information Administration. Total retail sales of electricity reached an all-time high because of economic growth, a larger building stock, and the weather. As a result, the US power sector’s CO2 emissions increased.

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The US likely used a record amount of electricity in 2018.
Source: Energy Information Administration, Short-Term Energy Outlook

The US power sector has gone through an unprecedented level of change during the past decade. The increased use of natural gas, renewables deployment, and the retirement of coal-fired power generation has contributed to steady declines in the carbon intensity of this sector.

Moreover, that didn’t change in 2018. Natural gas and renewable generation increased year-over-year, both regarding new power plant capacity and in total electricity generated. The US also retired a record amount of coal-fired power generation capacity, about 15 gigawatts.

Preliminary data through September shows that the carbon intensity of the US power grid—the amount of CO2 released divided by the amount of electricity generated—declined 3.1 percent in 2018.

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Source: Energy Information Administration, AGA Calculation

US power sector CO2 emissions would have been much higher in 2018 if it weren’t for the structural improvements in electricity generation during the past decade, namely the increased use of natural and renewables as a replacement for coal.

How much higher? To answer this question, we can look at the grid of the past and apply it to today. For example, we can take the carbon emissions intensity of the US power grid in 2008 to the amount of electricity generated in 2018 to get a sense of how much higher emissions would have been.  In this alternate 2018—where we are using more coal, and less natural gas and renewables—the US power sector CO2 emissions are 36 percent higher.

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The building sector

In its analysis, the Rhodium Group called buildings and industry “The Forgotten Sectors,” often ignored in clean energy and climate policymaking. Are building emissions lagging the rest of the economy? Disaggregating different components of the building sector is helpful in sorting out the underlying trends.

If we look only at residential buildings, we see very divergent trends by fuel. Specifically, electricity CO2 emissions increased significantly until 2009, at which point that has started to decline.

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Source: Energy Information Administration

Natural gas, however, has been flat for decades. The reason is that residential natural gas customers have been leaders in energy efficiency and CO2 emissions reductions.

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The average residential natural gas customers’ CO2 footprint has cut in half since 1970, a result of improvements to building and appliance energy efficiency, consumer conservation, and the impact of utility energy efficiency programs. This fact is made even more remarkable given the median single-family household is nearly 1,000 square feet larger than in 1973. As 30 million more households today are natural gas customers, the result has been largely flat CO2 emissions from residential natural gas consumption for four decades.

How do we continue to reduce the building sector’s carbon footprint?

This progress is good, but how do we continue this success? How do we continue to reduce emissions from consumers and help bring down overall emissions in the buildings sector?

A recent analysis from Enovation Partners suggests that natural gas technologies can contribute more to emissions reductions, and at lower cost. In the study, the consulting group identifies and assessed more than 100 emerging natural gas end-use technologies that could contribute materially to GHG reductions. They found a greenhouse gas reduction potential of 25 to 40 percent on a customer basis. Steeper reductions were possible with more advanced technologies and the integration of renewable natural gas.

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Source: Enovation Partners

Integrating efficient natural into long-term resource planning can help achieve continued emissions reductions in the building sector. We need to continue to increase consumer access to high-efficiency natural gas appliances; advance research, development, and deployment of next-generation natural gas technologies; and develop renewable natural gas. Industry efforts and public policy will be key to meeting these objectives.

Conclusion

Preliminary data suggests US carbon dioxide emission increased in 2018, a result of weather-driven energy demand and economic growth. If we dig into the data, there are still many hopeful signs of progress on US carbon dioxide emissions reductions. Among these areas are a decline in CO2 emissions intensity in the power sector and steadily decreasing CO2 emissions per residential natural gas customer. We find that natural gas continues to play a key role in reducing US CO2 emissions. Moreover, importantly, integrating efficient natural as solutions into long-term resource planning can help achieve continued emissions reductions in the building sector.

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