From the Financial Times:
“The shale gas boom in the U.S. has led to a big drop in carbon emissions, as power generators switch from coal to cheap gas. According to the International Energy Agency, U.S. energy-related emissions of carbon dioxide, the main greenhouse gas, fell by 450m tons over the past five years – the largest drop among all countries surveyed.
Fatih Birol, IEA chief economist, attributed the fall to improvements in fuel efficiency in the transport sector and a “major shift” from coal to gas in the power sector. “This is a success story based on a combination of policy and technology – policy driving greater efficiency and technology making shale gas production viable,” Mr Birol told the Financial Times.
Gas is fast becoming the new fuel of choice for the US power sector: in the past 12 months, coal generation has slumped by 19 per cent while gas generation has increased by 38 per cent, according to U.S. Department of Energy figures. A gas-fired plant produces half the CO2 emissions of a coal-fired one.”
MP: So let’s sum up some of the many economic and environmental benefits of the shale gas revolution:
1. Residential, commercial, industrial and electricity-generating customers of natural gas have saved $250 billion over the last three years because of abundant, low-cost gas.
2. Hundreds of thousands of jobs have been created in natural-gas related industries, both directly in the gas drilling activities, and indirectly in the industries supporting natural gas drilling like companies producing steel piping, drilling equipment, fracking sand, etc.
3. Cheap, abundant natural gas has sparked a manufacturing renaissance in energy-intensive industries like chemicals, fertilizers, and steel.
4. In the process of creating thousands of jobs and saving natural gas customers billions of dollars, the shale revolution has also significantly reduced carbon emissions as electricity producers have switched from dirty coal to clean, cheap natural gas.
Sure seems like a win, win, win situation – an energy stimulus program that didn’t require any taxpayer support and wasn’t even part of any intentional energy policy from Washington. As Scott Grannis pointed out on his blog, “We have only just begun to see the impact of this incredible development on the U.S. economy’s ability to grow.” And at his talk tonight at the Heritage Foundation for the Prosperity Caucus, Tyler Cowen suggested that we have probably under-estimated the positive effects of the energy revolution on the U.S. economy. The changing energy landscape will definitely continue to provide significant benefits to the U.S. economy for decades to come. Welcome to the Shale Revolution.
HT: R.J. Kuehl