Emission Trends Associated with Natural Gas Supply

The CO2 associated with natural gas supply reported by local distribution companies (LDCs) varies due to fluctuations in weather, the relative price of natural gas compared to other fuels and the prevailing economic conditions. The annual CO2 reported for natural gas supplied by LDCs has ranged between a low of 709.5 million metric tons (MMT) in 2012 and a high of 826.2 MMT in 2022 and is directly proportional to the quantity of natural gas supplied. The total volume of natural gas supplied increased by 10.2% in 2018 and by 0.6% in 2019. In 2020, natural gas supplied decreased by 5.8% percent, but rebounded slightly in 2021. However, the CO2 reported in 2021 was 31.6 MMT lower than the 2019 high of 822.5 MMT. The increase in natural gas supplied in 2018 and 2019 was primarily due to economic growth, relatively low natural gas prices resulting from high levels of natural gas production, and greater reliance on natural gas to fuel power plants. [1, 2, 3] The lower annual CO2 emissions reported for 2020 is due to a reduction in demand by residential, commercial (which includes restaurants, hotels, and schools), and industrial consumers. Natural gas supplied to residential, commercial, and industrial customers in 2020 decreased by 6.7 percent, 10.1 percent and 5.9 percent, respectively, compared with 2019, despite the lower natural gas prices. [3] The decrease in natural gas consumption by residential users is likely due to milder winter weather in January - March 2020 and November – December 2020, while the lower consumption in the commercial and industrial sectors is likely caused by plant closures caused by the COVID-19 pandemic. [4] Natural gas consumption by the electric power sector increased by 4 percent in 2020. In 2022, natural gas consumption increased across all sectors, with the largest increases occurring in the commercial and residential sectors, where consumption increased by 6.7% and 5.2% respectively. [8]  

Increases in the residential and electricity sectors in 2022 were 5.2% and 7.9% respectively. [8] The average natural gas price for residential customers increased from $12.18 per thousand cubic feet in 2021 to $14.75 in 2022. [5] Natural gas consumption in the electricity sector has increased each year since 2018 and is due in part to low gas prices and the retirement of coal-fired power plants. Although natural gas consumption by the electricity sector decreased slightly in 2021.[8]. Natural gas consumption by the electricity sector grew by 19.3 million cubic feet in 2021 from the 49.7 million cubic feet consumed in 2020 and may be due to higher natural gas prices in 2021. The average natural gas price paid by power plants in 2021 was double the price in 2020. [2, 3, 5, 6, 7].

The reported CO2 for 2011 and 2012 are also affected by changes in the default emission factors. The default emission factor for natural gas supplied was revised in 2013 to a value about 1% less than the default emission factor used in years prior to 2013. For an LDC that uses the default emission factors, the total CO2 value reported in 2013 and subsequent years is 1% lower than what would have been reported if the emission factor had not been updated. Since many LDCs use emission factors developed using their own data, the overall impact on CO2 for the sector is small. However, the total CO2 for the sector is lower for 2013 and subsequent years than would have been reported if the emission factor had remained unchanged.

[1]     U.S. Department of Energy, Today in Energy, U.S. Natural Gas Production, Consumption, and Exports Set New Records in 2019, October 5, 2020. Available at: https://www.eia.gov/todayinenergy/detail.php?id=45377.

[2]     U.S. Department of Energy, Today in Energy, In 2019, the United States Produced and Consumed Record Volumes of Natural Gas, July 10, 2020. Available at: https://www.eia.gov/todayinenergy/detail.php?id=44336.

[3]     U.S. Department of Energy, Today in Energy, In 2020, U.S. Natural Gas Prices were the Lowest in Decades, January 7, 2021. Available at: https://www.eia.gov/todayinenergy/detail.php?id=46376

[4]     U.S. Department of Energy, Today in Energy, U.S. Natural Gas Consumption was Lower in 2020 in All Sectors Except Electric Power, March 10, 2021. https://www.eia.gov/todayinenergy/detail.php?id=47076

[5]     U.S. Department of Energy, U.S. Energy Information Administration, Monthly and Annual Natural Gas Prices. Available at https://www.eia.gov/dnav/ng/ng_pri_sum_dcu_nus_a.htm.

[6]     U.S. Department of Energy, Today in Energy, More than 100 Coal-fired Plants have been Replaced or Converted to Natural Gas Since 2011, August 5, 2020. Available at: https://www.eia.gov/todayinenergy/detail.php?id=44636.

[7]     U.S. Department of Energy, Today in Energy, In the past 20 years, natural gas has displaced most coal-burning generation in Pennsylvania, January 26, 2023. Available at https://www.eia.gov/todayinenergy/detail.php?id=55319

[8] U.S. Department of Energy, U.S. Energy Information Administration, Natural Gas Consumption by End Use. Available at https://www.eia.gov/dnav/ng/ng_cons_sum_dcu_nus_a.htm

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