university of pittsburgh school of law 2013 energy law & policy institute david spence august 1,...
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Gas Displacing Coal in Electric Mix Market Effects Shale gas boom Future: relative pricesTRANSCRIPT
University of Pittsburgh School of Law 2013 Energy Law & Policy Institute
David Spence
August 1, 2013
Gas Displacing Coal in Electric Mix
Market Effects• Shale gas boom• Future: relative prices
Regulation: “war on coal”• Climate rules • Other rules
Survival of Rules• Power plant NSPS • existing plants rule?• NAAQS revisions• CSAPR
Gas Displacing Coal in Electric Mix
Market Effects• Shale gas boom• Future: relative prices
19491951
19531955
19571959
19611963
19651967
19691971
19731975
19771979
19811983
19851987
19891991
19931995
19971999
20012003
20052007
20092011
0
0.1
0.2
0.3
0.4
0.5
0.6
Coal
Natural Gas
Non-hydro renewables
Shar
e (1
=100
%)
First horizontal wells fracked in the Barnett Shale
56%
9%
37%
30%
5%
a Data source, US EIA
2005: Nat. Gas Wellhead Price = $7.33/mcf 2012: Nat. Gas Wellhead
Price = $2.66/mcf
Arab Oil Embargo: reduced use of oil and gas for electricity generation
Wider use of mountaintop removal reduces costs of coal mining
Share of Electricity Production for Coal, Natural Gas, and Non-Hydro Renewables, 1949-2012
New generation of EPA rules developed
Coal and Gas Prices, 2004-12
Gas Displacing Coal in Electric Mix
Market Effects• Shale gas boom• Future: relative prices
Gas futures vs. coal futuresNatural gas exports?
Technological change – CCS? UCG?
Gas Displacing Coal in Electric Mix
Market Effects• Shale gas boom• Future: relative prices
Regulation: “war on coal”• Climate rules • Other rules
EPA’s “War on Coal”?GHGs NSPS for new power plantsGHG regulation for existing plants?CSAPR MATS NAAQS revisions (NOx, PM)Once-through cooling rule Coal ash rule
Recent Yale polling on climate change – conflicting signals
SOURCE: Muller, Mendelsohn, and Nordhaus, AER, 2011
SOURCE: Muller, Mendelsohn, and Nordhaus, AER, 2011
FIGURE SOURCE: Skeptical Science“Epstein” refers to Epstein et al., Full Cost Accounting for the Life Cycle of Coal, Annals of the NY Acad. of Science, 2011.
More than any other electric generation fuel, coal does not pay its way.
Gas Displacing Coal in Electric Mix
Market Effects• Shale gas boom• Future: relative prices
Regulation: “war on coal”• Climate rules • Other rules
Survival of Rules• Power plant NSPS • existing plants rule?• NAAQS revisions• CSAPR
Thank you