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Haley Zaremba

Haley Zaremba

Haley Zaremba is a writer and journalist based in Mexico City. She has extensive experience writing and editing environmental features, travel pieces, local news in the…

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Are America’s Drilling Hotspots Preparing For A Pivot To Renewables?

  • A new projection from the United States Energy Information Administration, however, shows a clear win for renewables in the coming years – and waning natural gas usage. 
  • The EIA expects that regions of the country with the largest increases in renewable capacity, will experience the largest reductions in natural gas generation.
  • Solar, wind, and hydro-power are becoming increasingly competitive with fossil fuels, and their use is going to keep on growing. 

Thanks to the United States shale revolution of the last decade or so, natural gas has become an increasingly cheap and abundant source of power in global energy markets. Many world leaders and industry heads have also touted the plentiful fuel source as a cost-effective stepping stone away from more emissions-intensive fossil fuels such as coal and gas along the road to decarbonization. That view, however, has sparked much debate among policy-makers, shale execs, and environmentalists as the need to combat climate change grows more urgent.

Green energy plans are being ironed out around the globe on the heels of the COP26 climate summit, which finally took place in Scotland late last year after being postponed due to the novel coronavirus pandemic. The classification of natural gas as a clean or “bridge” fossil fuel for the global green energy transition is an important sticking point. While many think that it will be a critical stop-gap to avoid major energy crises as we phase out coal and gas, others argue that relying on natural gas is a crutch that will fatally compromise the effort to curb global greenhouse emissions enough to avoid the worst impacts of climate change.

Oil and gas giant T. Boone Pickens sums up the pro-gas argument on his website, saying: "Natural gas is not a permanent solution, it is a critical bridge fuel to immediately slash our oil dependence, buying us time to develop new technologies that will ultimately replace fossil fuels in transportation. Natural gas is the critical puzzle piece RIGHT NOW." On the other hand, recent reporting has shown that natural gas really isn’t the green-ish fossil fuel we once thought it was. “Results indicate we’ve underestimated the methane impacts of fossil fuel extraction by up to 40 percent,” National Geographic reported in 2020. While methane, the second-most abundant greenhouse gas, remains in the atmosphere for a relatively short amount of time, its greenhouse effect is 80 times more potent than that of carbon dioxide over a 20-year period.

President Joe Biden has pledged to regulate methane emissions – a historic first for the United States – and the recently signed Infrastructure Bill includes a Green Energy. Natural gas defenders have spilled much ink about the threat the Biden administration poses to the natural gas industry, American jobs, and U.S. energy security, while environmentalists have criticized the Infrastructure Bill for kowtowing to the fossil fuel industry through “green-washing” initiatives like carbon offsetting.

Related: Drone Attacks And Invasion Fears Send Oil Prices Soaring

A new projection from the United States Energy Information Administration (EIA), however, shows a clear win for renewables in the coming years – and waning natural gas usage. The EIA’s January Short-Term Energy Outlook (STEO) forecasts that “electricity generation from renewable energy resources such as solar and wind will reduce generation from fossil fuel-fired power plants over the next two years.” between 2021 and 2023, the share of energy generated from natural gas is projected to decrease from its current 37% to 34%.

The continued decline in coal production is to be expected, but the decline in natural gas is more newsworthy, considering the massive expansion the sector has seen in the last ten years. The seemingly unstoppable expansion of natural gas in the United States energy fix first reversed its trend in 2021, which could have been seen as a pandemic-era fluke brought on by soaring gas prices. “Although we expect natural gas prices for electric generators to decline, the operating costs of renewable generators will continue to be generally lower than natural gas-fired units,” the EIA reports. “We expect that regions of the country with the largest increases in renewable capacity, such as Texas and the Midwest/Central regions, will experience the largest reductions in natural gas generation.”

While renewable energy production has reliably gotten cheaper and more efficient every year, that trend won’t continue to hold true. However, it’s clear that solar, wind, and hydro-power are now competitive with fossil fuels, and their use is going to keep on growing. 

By Haley Zaremba for Oilprice.com

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  • DoRight Deikins on January 22 2022 said:
    Unfortunately for some who would like it to be all black or white, it's not an either/or proposition. Texas while already a renewable powerhouse (in Feb 2018, it was the first state to produce more than 50% of its monthly electricity from renewables), understands the need for multiple sources of energy - Texans remember the Alamo, Santa Rita #1, and Feb 2021.

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