New York - The US passed another historic marker in its energy revolution this year. In February, US transportation emitted more carbon dioxide than the fossil-fuel-heavy power sector for the first time since 1978. Overall, the US has seen a 25 percent drop in carbon-dioxide emissions since 2008, the Department of Energy said, a function of the rise of natural gas and smarter energy use.
Why this should happen now is a function of several different market forces. First, low gasoline prices have encouraged Americans to drive more, increasing CO2 pollution from tailpipes. Second, natural gas has eclipsed coal as the leading fuel for electricity producers. That development, reinforced by Environmental Protection Agency regulation, has led to a historic bust for US coal, which is a much more carbon-intensive fuel than natural gas.
Yes, gasoline is cheap. Yes, natural gas is killing coal. Yes, renewable energy is ramping up. These are the defining events of energy markets in recent years. But it leaves us with the question, now that the U.S. has a new, or at least emerging, energy mix, how did the old one get that way to begin with? The larger arc to this story goes back more than 50 years, when the oil embargo began a grand rethinking of energy infrastructure.
What the data show is the final lifting of the hangover from the 1970s energy crisis, when the oil shocks forced America to stop using oil for power. Oil made up a larger share of US energy use before the late 1970s because it was more commonly used as a fuel in electricity generation, peaking around - you guessed it - 1978 or so. Coal took up much of the slack, and pumped up CO2 emissions along the way.
This chart shows how the key sectors of the US energy economy have produced their electricity since 1949. Note the decline in oil during the late 1970s, and the subsequent rise of coal and nuclear power.
With the global Paris Agreement on climate change set to take effect, and leading businesses increasingly taking energy-and-climate matters into their own hands, the shifting US energy mix isn't just interesting trivia - it's a report card the rest of the world is scrutinising to see if the globe's economic leader is setting an example to follow.
BLOOMBERG