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An increase in travel along with a surge in demand for electric
power drove US energy-related CO2 emissions to 4.9 billion metric
tons (mt) in 2021, though the total remains 5% below pre-pandemic
levels, according to recent US Energy Information
Administration (EIA) data.
The EIA attributed the increase in CO2 emissions in 2021 to "the
rise in economic activity and energy consumption once the initial
economic impacts of the COVID-19 pandemic began to subside."
EIA said CO2 emissions were still 274 million mt (5%) lower than
their pre-pandemic level of 5.13 billion mt in 2019 and 1.14
billion mt (19%) lower than the 2007 historical peak of 6 billion
mt.
Although EIA noted that US energy-related CO2 emissions were 6%
lower in 2020 at 4.6 billion mt, it said that was the result of
COVID-induced lockdowns.
The EIA highlighted the CO2 emissions increase in a 13 May note
though it had released the estimates as part of its Monthly Energy Review that came
out on 26 April.
The US remains the second-largest global emitter of GHG
emissions, with CO2 taking up the lion's share from transportation
and power generation.
The federal estimates of US energy-related emissions in 2021
correspond with increases projected globally by the International
Energy Agency (IEA) a year ago. IEA said global energy-related
emissions would increase in 2021 with emissions coming from coal,
natural gas, and China and counteracting all the reductions seen
during 2020.
Key culprits: transportation and power
generation
The EIA said the transportation and power generation sectors
were mainly responsible for the emissions hike in 2021.
More petroleum products were consumed in 2021 when people
resumed their traveling either by air or by road with the easing of
COVID-related restrictions. As a result, jet fuel emissions
increased 27%, motor gasoline emissions increased 9%, and emissions
from distillate fuel oil (which is primarily consumed as diesel)
increased 6%.
The scale of the demand increase for oil towards the end of 2021
caught most oil companies unaware, as US Secretary of the Treasury
Janet Yellen recently observed.
As the US economy began revving up its engine, EIA said
emissions from coal-fired generation reported an increase to 1.12
billion mt from the low of 900 million mt seen in 2020.
This reversed the year-on-year declines EIA has been recording
in coal-fired power emissions since 2014 and contrasts with the US
pledge to move away from coal-fired generation as part of net-zero
carbon goals.
Stable coal prices and significantly higher natural gas prices
contributed to greater use of the former in power plants, and
consequently an increase in emissions, it added.
In a 31 December 2021 note, the EIA
reported that the year-to-date delivered cost of natural gas to US
power plants averaged $4.93/MMBtu, more than double the previous
year's price.
In contrast, S&P Global Commodity Insights reported high
sulfur, bituminous coal prices averaging $63.63 per short ton in
2021. This converts to a cost of about $3.20/MMBtu, based on the
coal's heat content.
Phasing out coal-fired generation
In 2022 though, the EIA does not expect coal-fired generation in
the US to return to 2021 levels of providing 23% of total power
generation. Rather, it projects that renewables, driven mostly by
wind and solar installations, will be responsible for 22% of power
generation, while coal will slip a tad to about 22%.
China and India, which are two of the top GHG emitters in the
world, have introduced policies to boost
coal-fired generation despite warnings from scientists about its
contribution to climate change.
In late April, the IEA announced it was convening a
group of energy, finance, and climate leaders to brainstorm
approaches for phasing out coal-fired emissions globally. The
report is scheduled for release in the fourth quarter of this
year.
Posted 13 May 2022 by Amena Saiyid, Senior Climate and Energy Research Analyst
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.