The Institute for Energy Research, a generally free market think tank that focuses on energy policy, notes that U.S. carbon dioxide emissions are down 9.1 percent below their 2007 peak. Why? The sluggish economy has reduced demand for energy; high oil prices in recent years have reduced demand for gasoline; low natural gas prices and new EPA regulations that discourage coal-powered electricity generation have led to fuel switching from high-carbon coal to lower-carbon natural gas; and more renewable fuels (hydro, bioethanol, wind, and solar) have displaced a small amount of fossil fuel consumption.
As the IER notes:
In 2011, total carbon dioxide emissions from fossil fuels were 5,472 million metric tons, of which 34 percent was from coal, 24 percent from natural gas, and 42 percent from petroleum. Carbon dioxide emissions from petroleum declined by 2.1 percent in 2011 as a poor economy, high oil prices, and increased use of biofuels resulted in a drop in petroleum consumption of 1.8 percent.
Carbon dioxide emissions from coal also declined, but at a higher rate than petroleum—5.8 percent— as low natural gas prices and EPA regulations have both electric generators and industrial producers switching to natural gas as their fuel of choice. Lower natural gas prices are a result of hydraulic fracturing technology that allows shale gas to be produced very economically in abundant quantities. As a result, carbon dioxide emissions from natural gas increased by 2.4 percent. Since 2006, carbon dioxide emissions from natural gas have increased by almost 12 percent.
But, because the carbon dioxide content of natural gas is about half that of coal, fuel switching from coal to natural gas for electric generation has resulted in lower carbon dioxide emissions from that sector. So, even though the demand for electricity was up in 2011 by 1.2 percent, carbon dioxide emissions from the electric generation sector were down by 4.6 percent. That trend in continuing into 2012 as coal’s share of generation continues to decline.
Due to cheap natural gas, the new EPA regs aren't costing consumers much now, but what happens when/if natural gas prices begin to rise? As the IER notes the U.S. will no longer have the option of generating electricity from coal once those plants have been shuttered or converted to natural gas generation.