At the height of the Global Financial Crisis in 2008, when Democrats swept the House, Senate, and presidency, half of all electricity generated in the US came from coal, while only one-fifth came from gas. In a little more than a decade, those shares had nearly inverted—a process that amounts to the single largest source of greenhouse gas emission reductions in the US to date. Although federal regulations like the Clean Air Act reinforced this process, this paper argues that the most important drivers of this transition were technological and economic change: horizontal fossil-fuel drilling techniques, or “fracking,” in combination with significant improvements to the efficiency of combustion turbines, changed the economics of electricity generation.
This paper focuses on the US power sector’s very first energy transition—“the dash for gas”—in three regions where it was most prominent: Texas, the Pennsylvania-New Jersey-Maryland Interconnection (“PJM”), and the Southeast. The paper considers if, why, and how governmental institutions may have influenced the transition. All three of these regions saw a marked (though uneven) transition from coal to gas, suggesting the dominance of external factors, like technical innovation, broader policies outside the power sector, economics, and even geography). Even so, regional institutional differences within the power sector remain important. While Texas and states in PJM largely “deregulated” their electricity sectors, unbundling generation from transmission and distribution, and joined Regional Transmission Organizations (RTOs) that operate competitive wholesale real-time “spot” markets for power, none of the states in the Southeast have joined an RTO, and most have retained traditional rate-regulation of vertically-integrated utilities as their primary governance model. As a result, the timing of each region’s transition differs slightly, and each region uses gas turbines differently to meet electricity demand—facts which significantly affect the possibilities for a wider transition to carbon-free electricity.