Low US Natural Gas Price Means More Coal Burning in Europe-Shell

From Fox Business

By Selina Williams

The shift in energy flows comes as Europe is trying to reduce its emissions of greenhouse gases to meet climate targets and highlights how North America’s shale gas boom has rewritten the global energy map, in some cases to the detriment of regional energy policy.

Before the shale gas boom, the U.S. power sector predominantly burned coal, which produces roughly twice as much emissions as gas, to generate electricity. But a surge in unconventional oil and gas production has forced U.S. gas prices down to 10-year lows this year, stimulating demand for gas across many sectors.

Ironically, as natural gas demand in the U.S. power sector has increased due to the low prices, demand for coal has strengthened in Europe, where it is cheaper than gas, which is mostly priced against oil.

Since the start of this decade, coal exports to Europe from the U.S. have increased five fold. This has resulted in a reduction of around 23 billion cubic meters of gas being burned in the European power sector this year, Mr. Brown said at Shell’s natural gas strategy briefing.

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