For the first in the United States, natural gas has become the number one source of electric power generation, leaving coal behind. The popularity of coal has been diminishing for years due to continues decrease in gas prices and tougher regulations to cut pollution that made coal a less desirable and a more risky source of energy for power generators.
According to a research conducted by SNL Energy with the collaboration of the U.S. Energy Department, 31% of electric power generated in the month of April was powered by natural gas, and 30% from coal. A small difference, but one that is expected to grow further apart.
The change in the country’s energy production started in 2008, after companies initiated an astronomical amount of drilling projects, which has increased natural gas in the United States by 30%. The boom in drilling and fracking turned United States into the largest producer of natural gas in the world.
Fracking, or hydraulic fracturing using a more professional terminology, gave energy companies access to large amounts of gas trapped in shale formations deep underground.
Another indication for the decreasing popularity of coal is the bond market. Coal companies raise money through bonds, for new operating and investing expenses like new mines and environmental cleanup projects. Investors are less and less willing to invest in coal however, and as a result, coal bonds have been felling in value every single quarter over the last year.