Natural Gas Trumps Coal as Fuel for Electricity Generation

Bloomberg reported that a statement from the US Energy Information Administration indicates that coal’s contribution to electricity generation will drop 37 percent this year. Further, coal will not recover the bulk of the share of electricity generation that it has lost to natural gas, according to Moody’s Investors Service.

As quoted in the market news:

“Coal will regain a bit of market share as natural gas prices recover somewhat, but most coal-to-gas substitution to date will be permanent,” Anna Zubets-Anderson, a Moody’s vice president and senior analyst, wrote in the report. Production from shale has boosted gas inventories and coal has faced more scrutiny from environmental regulators.

The Energy Department forecast in its Short-Term Energy Outlook Aug. 10 that coal’s contribution to electricity generation will drop to 37 percent this year, down from 42 percent in 2011 and 49 percent in 2007. Gas’s share will climb to 31 percent from 25 percent in 2011.

Click here to read the full Bloomberg report.