The decline in coal prices is accelerating with the boom in natural gas and renewable energy sources

The U.S. energy landscape has undergone a remarkable transformation since 2000. The changes reflect broader economic, technological and political trends that have impacted the country’s energy mix.

One area that has experienced significant change is consumption patterns for coal, natural gas and renewable energy sources. This is the story of this transformation.

Beginning of the 21st century: coal domination

In the early 21st century, coal was the dominant energy source for electricity generation in the United States. In 2000, coal consumption was 22.6 quadrillion British thermal units (BTU), reflecting its widespread use in power plants across the country. This was primarily a reflection of the relatively low cost and availability of coal in the US

Natural gas consumption was also significant at 23.3 quadrillion BTUs, but it was used primarily for heating and industrial processes. Soon, however, it would become a rapidly developing fuel for generating electricity. Renewable energy, including hydro, wind, solar and biomass, contributed a modest 5.7 trillion BTUs.

Mid-21st century: increased interest in natural gas

The mid-2000s saw a significant increase in natural gas consumption, fueled by advances in hydraulic fracturing and horizontal drilling techniques that released vast reserves of shale gas. By 2005, natural gas consumption was 22.7 quadrillion BTUs, but was close to breaking even.

Coal consumption remained relatively stable, reaching a slight peak in the mid-2000s before gradually declining. Renewable energy sources have begun to gain popularity, mainly due to increased investment in wind and solar energy.

The end of the 21st century and the beginning of the 21st century: the transition to cleaner energy

In the late 21st century and early 2010s, there was a significant shift towards cleaner energy sources. This period saw a sharp decline in coal consumption, dropping to 20.8 quadrillion BTUs by 2010, as environmental regulations tightened and the economic benefits of natural gas became apparent.

Coal, natural gas, renewable energy sources in 2000–2023. Data source: EIA. ROBERT RAPIER

Natural gas consumption reached 24.7 quadrillion BTUs in 2010, driven by lower carbon emissions and cost-effectiveness. Renewable energy continues to grow, reaching 7.6 trillion BTUs in 2010, helped by federal and state incentives, technological advances and falling costs.

Mid-2010: accelerated decline of coal and increase in renewable energy sources

The trend towards cleaner energy sources accelerated in the mid-2010s. By 2015, coal consumption had plummeted to 15.7 quadrillion BTUs, while natural gas consumption continued to rise, reaching 28.3 quadrillion BTUs. Renewable energy sources have seen significant growth, with consumption rising to 10.0 quadrillion BTUs, driven by significant increases in wind and solar power capacity.

End of 2010 and beginning of 2020: dominance of natural gas and renewable energy sources

From the end of 2010 to the beginning of 2020, the dominance of natural gas and renewable energy sources in the US energy mix was consolidated. By 2020, coal consumption had fallen sharply to 10.7 quadrillion BTUs, reflecting the ongoing decommissioning of coal-fired power plants and the shift to cleaner energy.

Natural gas consumption reached 32.6 quadrillion BTUs in 2020. Natural gas played a role both as firm power (energy on demand) and a role in balancing intermittent renewable energy sources.

Renewable energy sources have experienced extraordinary growth, with their consumption reaching 12.1 quadrillion BTUs in 2020, highlighting the significant contributions of wind, solar and biomass energy.

Latest trends: continuous development of natural gas and renewable energy sources

In 2023, coal consumption increased slightly and natural gas consumption rose to a record high of 36.5 quadrillion BTUs. Renewable energy consumption reached a record high of 14.7 quadrillion BTUs in 2023, reflecting ongoing investments in renewable energy infrastructure and the growing role of wind and solar power in the national power grid.

Conclusions

Between 2000 and 2023, there was a dramatic transformation in the U.S. energy landscape. Coal consumption decreased by 13.0 quadrillion BTUs, while natural gas consumption increased by 13.4 quadrillion BTUs. During this period, renewable energy consumption increased by 8.4 trillion BTUs.

However, it is important to note that these comparisons are not apples to apples. When burning coal or natural gas for energy, most of the energy (60% to 70%) is lost through conversion to electricity in the form of heat. However, this does not apply to renewable energy sources. It can therefore be concluded that a BTU of coal or natural gas consumption is not directly comparable to a BTU of renewable energy consumption when the medium in question is electricity.

On the other hand, renewable energy is not continuous power. Natural gas can completely replace a coal-fired power plant. Renewable energy sources are better suited to serving marginal demand in a decentralized way. As a result, renewables and natural gas work well together, resulting in a huge decline in coal consumption this century.

These trends are expected to continue as technological advances, economic factors and policy initiatives drive further efforts to reduce greenhouse gas emissions. The U.S. energy sector is prepared for a future in which renewable energy sources will play a key role, supported by natural gas as a flexible and reliable energy source.

Robert Rapier

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