Utility dash to natgas cuts carbon in US Northeast

NEW YORK, June 25 (Reuters) - Power plants in the U.S. Northeast slashed carbon dioxide emissions during the first quarter of 2009 as they switched to burning clean, cheap natural gas instead of coal, according to report issued on Thursday.

Cheap natural gas prices were more responsible for the emissions cut than the recession, according to the report, released on Thursday by nonprofit group Environment Northeast.

Prices for U.S. natural gas have fallen steadily from a peak over $13 per million British thermal units last July to under $4 per mmBtu as excess production, slumping demand and increased imports push storage fields to their limits.

The report said carbon dioxide emissions from power plants in the 10 Northeast states in the Regional Greenhouse Gas Initiative, the country's first regional market to regulate emissions of the gas, fell about 10 percent during the first quarter 2009 from the same quarter in 2008.

In 2008 annual emissions from power plants in the 10 states were 19 percent below the RGGI cap of 188 million tons, the report said.

"Energy efficiency investments and the economic downturn are also contributing to reduced energy consumption, although lower energy consumption does not appear to be as large a contributor to declining emissions as increased use of low-or no-carbon fuels," the report said.

Derek Murrow, the director of policy analysis at Environment Northeast, said emissions for later in 2009 could still go up if the summer gets hot and increases air-conditioning demand.

But he said the unexpected drop in emissions can be a lesson to U.S. lawmakers hoping to regulate greenhouse gases that such plans "can often be significantly cheaper to implement than originally forecast."

Burning natural gas in power plants emits about half as much of the planet-warming gas carbon dioxide for the same amount of electricity output as burning coal does.

(Reporting by Timothy Gardner; Editing by David Gregorio)