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EIA says Elevated Natural Gas Prices to Accelerate Coal Production

The U.S. Energy Information Administration said on Tuesday, August 10,20201, that increased natural gas prices might lead to the rise in energy sector carbon dioxide emissions due to the increase in Coal Production consumption. Emissions of Carbon dioxide from the power sector has risen by 7% to 4.9 billion mt in 2021, as reported in the EIA’s Short-Term Energy Outlook. The overall emission of the sector was reduced by 11% in 2020.

Particularly, the expected 2021 increase in Coal generation in the middle of superior natural gas prices is partly to blame for the evident increase in climate-warming emissions. As a result, CO2 emissions related to Coal are anticipated to rise by 17% this year in order to augment as Coal contributes a more significant part of electricity.

EIA says Elevated Natural Gas Prices to Accelerate Coal ProductionSteve Nalley, EIA Acting Administrator, said in a release that in spite of the evident growth in power-related CO2 emissions as the economy of the U.S. starts to recover, they don’t see these emissions getting back to the pre-pandemic levels, at least not anytime soon.

In next year, the agency anticipates the CO2 emissions of the power sector to increase another 1%, with a drop of 7% in Coal share of emissions. Natural gas’ contribution of power generation is in 2021 is likely to turn down from 2020 levels. The agency projects the Henry Hub spot rate to average USD3.71/MMBtu in the coming quarter to settle at USD3.42/MMBtu for the year in comparison with USD2.03/MMBtu in 2020. The EIA projects that the price to fall to USD3.08/MMBtu on average in 2022 as production rises.

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