At BTU Analytics we write many Energy Market Commentary (EMC) pieces on detailed production results in specific plays, today this post will back-off and look at larger trends in the energy markets – specifically how gas and renewables drive US decarbonization trends. First in this post we will look at world fuel consumption compared to US fuel consumption over time. In developed countries, fuel switching in energy markets is continuously changing driven by technology, production costs, and regulation to name a few. However, the over arching trend is cleaner fuels with lower emissions, typically replacing higher emissions fuels over time. Looking at world fuel consumption shows another trend: as aggregate fuel demand rises in emerging economies, most individual fuel types move with the rising tide and increase as well.
While a rising tide, lifts all boats, the data below also shows that every fuel has its day. For example, wood consumption in the U.S. peaked in 1870 and was replaced by coal, a cheaper more bountiful resource at the time. Today in the U.S., coal’s best days may be behind us, as natural gas and renewables are taking coal’s market share for electric generation. Click here to read more about how gas and renewables are influenicng decarbonization.