Richard Nevell and Daniel Raimi have an excellent article in Environmental Science & Technology on “Implications of Shale Gas Development for Climate Change”. Based on the analysis, the authors conclude that increased shale gas extraction will not itself have significant effects on U.S. greenhouse gas emissions in the coming decades:

These results suggest that increased natural gas production is likely to have a small effect on aggregate U.S. GHG emissions. The climate benefits that are achievable through substitution for coal in the electricity sector are significant, but unlikely to substantially alter the aggregate GHG trajectory in the absence of GHG reduction policies. At the same time, a relatively high level of methane emissions from natural gas systems is unlikely to dramatically increase the trajectory of GHG emissions.”

Specifically, the authors estimate that in a scenario with high natural gas production, cumulative emissions from 2010 to 2040 outside transportation would be 1.4% lower than in the reference case. That’s not a lot. While replacing coal with natural gas in the electricity sector produces gain, overall energy use increases and partially offsets these gains. Moreover, the electricity sector is but one part of the economy. Since natural gas does produce carbon dioxide emissions, it is not as though coal were replaced by zero-carbon energy, such as solar or winnd power.

The main implication of shale gas is that it may reduce the cost of climate policy. Both in the electricity sector and elsewhere, natural gas is one fuel that can be substituted for coal and oil. If the federal government imposes a price on carbon or directly regulates emissions, shale gas may reduce the economic cost.

A critical aspect of the problem is the fate of the coal not burned in the United States. The authors acknowledge that current research does not tell us a whole lot about the effects of possible coal exports on global greenhouse gas emissions, as “Additional research on the global market effects of increased U.S. coal exports is needed to shed more light on this issue.”

This article is an important reminder that, despite advances in renewable energy and all the talk about the “shale gas revolution,” the reality is that we must price or regulate carbon, as EDF’s Gernot Wagner in an excellent blog post. I would also emphasize the importance of restricting exports of coal, as reducing the supply of coal will drive prices up and prompt substitution.

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