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October 30, 2013
A natural gas field in Wyoming (credit: SkyTruth) The current natural gas boom will not provide a drastic reduction in carbon dioxide (CO2) emissions, according to a recent study from Stanford University’s Energy Modeling Forum . There are environmental benefits to burning natural gas rather than coal, namely the elimination of harmful air pollutants such as sulfur dioxide and nitrogen dioxide. And natural gas does emit less CO2 than the burning of coal, but the potential for natural gas deployment to lead to drastic CO2 emission reductions is overstated, primarily due to the fact that natural gas will also displace a portion of renewable energies, such as wind and solar.
Experts from private industry, government and academia examined several different energy-economy models, and concluded that CO2 emissions will grow at similar rates between 2010 and 2035 regardless of the extent of natural gas deployment. These findings are largely due to the fact that inexpensive natural gas will out-compete carbon-neutral renewable energy. While a few of the models predict a modest reduction in CO2 thanks to natural gas, additional policy action would still be necessary to drive emissions down further. The researchers also modeled the effect of a $25 per ton carbon tax and found that in each model, the impact of such a measure would be dramatic.
Although the natural gas boom will provide a boost to the U.S. economy, the effects will also be more modest than expected, both to the economy overall and to job creation. The Stanford study predicts that hydraulic fracturing (fracking) for natural gas will increase GDP by $70 billion a year for the next several decades, which represents only 0.46 percent of the U.S. economy. As for job creation, the oil and gas sector represents less than 1 percent of U.S. employment.
Even end consumers aren’t sure to benefit from lower natural gas prices. Consumer pricing is dependent on a variety of factors, including government policies as well as how sensitive consumption is to price signals. Cheaper natural gas may lead to more applications for it, which would increase demand and put upwards pressure on prices.
Abundant natural gas will also have the effect of discouraging energy efficiency and conservation, further negating the benefits of switching from coal to natural gas. The Paris-based International Energy Agency (IEA), an energy advisory group to 28 developed nations, found that the U.S. natural gas boom will de-incentivize energy-efficiency spending. While the United States has greatly increased its energy efficiency in the past decade, the IEA warns that cheap natural gas will “make it more difficult to sustain and increase ratepayer spending levels as consumers see the energy efficiency surcharge on bills growing even as commodity costs are going down.”
Author: Jessie Stolark
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