American Fossil Fuels: Diverging Paths for Coal, Oil, and Natural Gas
From 2000-2022, the United States has seen its carbon dioxide emissions decrease by 16%. During that time, the U.S. economy grew by 35% and population by 19%.
This is an impressive achievement by any measure.
But the impressive reduction hides diverging paths for the three major fossil fuels – coal, natural gas, and oil. Almost all the reductions in the United States are driven by reduced coal use. Emissions from oil use have remained roughly stable, while emissions from natural gas have increased.
Greenhouse gas emissions by fuel in the United States. https://www.c2es.org/content/u-s-emissions/
1. Coal’s decline
Coal’s decline started around the great financial crisis in 2008. One obvious cause was the economic recession, which reduced electricity demand.
For the long run, the growth in fracking for natural gas was more important. Natural gas has a lower carbon intensity than coal. Although fracking in the United States started already after the Second World War, production grew fast in the 2010s.
As natural gas priced decreased, retiring coal infrastructure was replaced with natural gas. Building new coal-fired power plants made little sense, considering that coal no longer had a cost advantage while facing significant pressure from environmental regulations.
This is significant because almost all domestic U.S. coal consumption is for electricity generation. In 2019, under 10% of all domestic coal demand was for industrial or commercial use. The rest was for the power sector.
The results are easy to see. American coal-fired power generation peaked at around two billion megawatt-hours in 2007. At that time, natural gas-fired power generation was under one billion megawatt-hours. In 2023, coal had fallen under 700 million megawatt-hours while natural gas had reached 1.6 billion.
More recently, renewable power generation has added further pressure on coal. The costs of solar and wind electricity have decreased rapidly over time. While these variable sources cannot completely replace coal without major investments in battery storage, transmission infrastructure, and other investments to handle variability, their share in U.S. power generation has grown from less than 1% to 14% between 2000-2023.
2. Two words: oil
Oil is a different story altogether. As I always remind my students, oil is not a substitute for natural gas or coal. Oil is primarily used as a transportation fuel and secondarily in industry. Coal and natural gas are used in electricity generation and industry.
Greenhouse gas emissions by end use in the United States.
https://www.c2es.org/content/u-s-emissions/
American oil demand has been remarkably stable over the past two decades. In the year 2000, the United States consumed about 19.7 million barrels per day. In the year 2023, this number was 20.2 million barrels per day.
In the near future, oil demand will likely stay flat or begin to gradually decrease. As electric vehicles gain ground and mileage continues to improve, demand for gasoline faces downward pressure. However, oil demand will probably not decrease rapidly. Electric vehicles were still under 10% of all U.S. automotive sales in 2024. The second Trump administration has not shown any interest in supporting electric vehicle adoption.
3. The problem for the United States is oil and gas
For the United States, the question of climate change is essentially a question of oil and gas. Coal’s decline will continue. Regardless of climate policy, retirements of coal-fired power plants will continue. They will not be replaced with new coal-fired power generation capacity.
Oil and gas present a more significant dilemma. Beginning with oil, the United States is at the early stages of an electric mobility revolution. Unlike China or Europe, the United States has seen electric vehicle adoption grow only slowly. The United States faces multiple challenges in introducing electric vehicles:
· American automakers are far behind their Chinese counterparts in the mass production of affordable, high-quality electric vehicles. Although Tesla was an early leader, the company has recently faced significant challenges.
· The United States has a low population density compared to China, resulting in “range anxiety” – concerns about battery life and charging infrastructure.
· Policy support has been inconsistent, depending on electoral outcomes.
I believe that the United States will eventually transition from the internal combustion engine to electric mobility, but this transition will be slower than in China or Europe.
Replacing natural gas in electricity generation with renewables will take time. With low natural gas prices, combining solar or wind power with battery storage is not yet commercially viable without subsidies. Other alternatives, such as nuclear power or geothermal, face an uncertain future.
Eventually, industrial innovation will result in oil and gas being replaced in that sector as well. However, these technologies are not yet where renewable power generation, battery storage, and electric vehicles are today. Industrial decarbonization by moving away from oil and natural gas is possible in the coming decades, but this will not be a fast process.
In 2025, the second Trump administration has made it clear that it has no problem with continued fossil fuel use. While President Trump cannot turn back the clock and stop the global progress of clean technology, he can slow down progress in the United States by repealing environmental regulations, stopping the implementation of the Inflation Reduction Act, and favoring fossil fuel through executive action.
The United States was able to reduce its emissions early because of coal’s decline. This was the low-hanging fruit. Now begins the hard work of replacing oil and gas.