Shale Revolution Helps Drive Electricity Costs to Record Lows

For the second year in a row, “electricity is making up a smaller share of U.S. household bills than ever before,” a fact that can be traced directly to the fact that natural gas has retained its position as the No. 1 electricity generation producer in the U.S. in 2017.

The Business Council for Sustainable Energy, in partnership with Bloomberg New Energy, has released its 2018 Sustainable Energy in America Factbook, an annual report aimed at augmenting “existing, reputable sources of information on U.S. energy,” with a focus on natural gas, renewables and energy efficiency.

And for the second year in a row, the report finds “electricity is making up a smaller share of household bills than ever before,” a fact that can be traced directly to the fact that natural gas has retained its position as the No. 1 electricity generation producer in the U.S. in 2017.

The report finds that Americans spent just 1.3 percent of their incomes on electricity last year and 0.4 percent of their incomes on natural gas, helping drive overall energy expenditures to less than four percent of total household income —right in line with the record lows reported last year.

The report states:

“Consumers devoted a smaller share of their spending towards electricity than at any time ever recorded, while the total share of household expenses dedicated to energy costs also hovered near an all-time low. Power and natural gas prices remain subdued across the country, and contract prices for wind and solar continued to plunge.”

“… Greater energy efficiency and the continued availability of cheap fuels likely contributed to keeping electric costs a modest part of total consumer expenditures. Spending on natural gas also remained muted, as consumers directed just under 0.4% of their outlays to this resource, similar to 2016 levels.”

The report finds that average national retail electricity prices have declined 5.8 percent on average since peaking in 2008. Natural gas’ share of the electricity generation mix increased from 22 percent to 32 percent during that time frame, while record production made possible by shale development has pushed prices down roughly 60 percent.

As the report notes:

Natural gas has become increasingly affordable for consumers. Retail prices for the commercial sector averaged just $88/mmcf in 2017, down 42% over the past decade and near the recent trough observed in 2016. Gas prices for the industrial sector have followed a similar trajectory but continue to undercut commercial rates, averaging just over $44/mmcf in 2017.”

The report also finds that U.S. power sector greenhouse gas (GHG) emissions have fallen to their lowest levels since 1990, including a 4.2 percent drop from 2016 levels in 2017. As the below graphic from the report illustrates, power sector carbon emissions are 28 percent below 2005 levels.

Notably, the U.S. Energy Information Administration has previously reported nearly two-thirds of these reductions are attributable to natural gas.

Full post

via The Global Warming Policy Forum (GWPF)

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February 16, 2018 at 02:17AM

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