At the turn of the century, environmentalists and “Big Oil” appeared to be moving toward one another. With the world anticipating a global climate change agreement, companies like Shell and BP made large-scale investments in renewables. Shell was running the world’s largest solar power–producing plant in Germany in 2004. BP had not only invested billions of dollars in renewable energies and low-carbon technologies, it also redesigned its logo to resemble the sun and even declared in 2000 that its name stood not for British Petroleum but “better people, better products, big picture, beyond petroleum.” Big Oil was no doubt motivated to explore cleaner energy sources in part by “the end of easy oil,” whereas greens saw a future reliant on fossil fuels as environmentally unsustainable. Environmentalists and Big Oil did not necessarily agree on the problem, but they seemed in consensus on the prescription: the need to develop alternatives to fossil fuel energy.
Alas, this moment of unusual alignment was short-lived. The majors largely sold off their renewable energy investments several years later, consolidating efforts behind finding and producing fossil fuels.1 Some explained, quite simply, that—at the time—the renewables business was not profitable.2 Faced with a global recession, industrialized countries shied away from policies that would have slapped a price on carbon. Instead of fretting over the need to seek out more difficult-to-extract oil in more difficult-to-operate countries, the oil and gas industry was suddenly able to access huge quantities of unconventional oil at commercial prices in countries with low political risk. That prospect pulled the economic rug out from under the consensus to develop alternative fuels. Soon thereafter, an abundance of unconventional oil found in the United States eased the fears of Americans formerly worried about increasing reliance on foreign fuels.
No assessment of the interaction between energy and geopolitics today would be complete without considering the relationship between the new energy abundance and efforts to tackle one of the greatest transnational challenges of the times: climate change. Although great scope for debate remains, a serious effort to disentangle rhetoric from reality at least allows us to draw some preliminary answers to some pressing questions. First, fears that the new energy abundance will blow a hole in efforts to address carbon emissions—at least for now—are exaggerated; if anything, the evidence suggests that there have already been modest benefits to the climate from more shale gas production. Second, with additional support and direction from policymakers worldwide, the new energy abundance could be an important part of the global effort to address climate change. Finally, taking the need to address climate change seriously does not need to come at the expense of encouraging the oil and—particularly—gas boom in the United States and elsewhere; in fact, too much disregard for climate and the environment could have a boomerang effect on America’s newfound oil and gas prowess.
The New Energy Abundance and Carbon Emissions
Before assessing areas of larger debate, it is useful to address some common misperceptions about unconventional oil and its carbon footprint. One form of unconventional oil—oil sands—is associated with higher emissions, about 17 percent greater than most other conventional crudes.3 These higher emissions are largely due to the greater energy required both to extract and to process this oil. It is, however, useful to keep in mind that oil sands—while accounting for close to two-thirds of Canada’s oil production and for about one-third of all types of unconventional oil—only constitute about one-fortieth of overall global oil production.4 Extra-heavy oil and oil shale—two other unconventional oils—also are associated with higher emissions, but they constitute an even smaller amount of global oil production.5
By contrast, the production of tight oil—which accounted for more than half of all types of global unconventional oil production and half of U.S. crude oil production as of 2017—involves significantly lower emissions than those associated with oil sands.6 The reasons are threefold. First, tight oil is extracted through fracking, a far less energy-intensive process than that used for oil sands, which are produced either by what is essentially mining or by heating the viscous resources to high temperatures while it is still in the ground. Second, tight oil in the United States (the only place besides Argentina and Canada where it is being produced commercially as of 2017) is what is known as “light oil,” meaning that it needs minimal refining before it can be used as gasoline or other end products by consumers.7
In fact, emissions associated with tight oil are similar to and, in many cases, lower than those associated with conventional oil production. Some research outfits have calculated that tight oil actually emits less carbon than the lighter, conventionally produced crudes from Nigeria and elsewhere; it is these imports to the United States that tight oil has tended to displace.8 Stanford professor Adam Brandt, although focusing on the frequent flaring of natural gas produced alongside oil, makes essentially the same point when he says, “if flaring were controlled, the Bakken [tight oil] crude would have lower emissions than conventional crude.”9
The carbon intensity of unconventional oil aside, two entirely reasonable people can make completely contrary arguments about the relationship between the oil and gas boom and carbon emissions and climate change. Common sense, for example, suggests that if the price of oil were lower, people would use more of it, a point supported by two contrasting scenarios of the future created by the U.S. Energy Information Agency in 2017. One scenario, the “High Oil and Gas Resource and Technology Case,” imagines that the United States produces dramatically more oil overall, and more tight oil in particular, in both 2020 and 2050.10 This higher production leads to lower prices than would otherwise exist and does result in greater usage of oil across the decades examined. The implications for carbon emissions are not surprising. In both the reference (or “most likely”) scenario and the high-resource scenario, emissions from the energy sector are lower in an absolute sense in 2020 and 2050 than they were in 2011 due to greater efficiency and the use of more climate-friendly fuels.11 But the high-resource case involves 3 percent greater carbon emissions in 2050 than the reference one due to greater consumption.12 The data on the extent to which the low oil prices of 2014–16 have spurred consumption growth are both limited and mixed; while the world as a whole saw faster demand growth in 2015 and 2016 than in the two years before the price crash, in the United States, one year saw robust demand and the other much more modest demand.13
Another likely impact is that the downward pressure on the price of oil will make it more difficult for alternative fuels to be competitive in transportation. The Paris-based International Energy Agency concluded in a 2013 study that until technology advances, few other fuels will be cost competitive so long as oil remains below $90 a barrel.14
For these reasons, some people will conclude that addressing climate change is easier in a high oil price environment with the threat of scarcity, rather than one of abundance and lower prices. Nevertheless, it is worth remembering that high oil prices also brought with them strong arguments to pursue other technologies that were less carbon friendly than oil. Throughout the mid-2000s, when the price of oil was high and climbing, the U.S. Congress introduced several bills offering greater support for technologies that could convert coal-to-liquids despite the fact that diesel and jet fuel made from coal emit twice as much carbon as oil.15 One such effort was the Coal to Liquid Fuel Energy Act of 2007—cosponsored by 14 U.S. Senators, including Senator Barack Obama—which would have provided government loan guarantees to projects advancing these technologies.16 Enthusiasm for coal-to-liquids was not limited to the United States, but included South Africa and China; Beijing reportedly sought to ramp up its efforts to turn coal into liquid fuel by twenty-fold between 2010 and 2020.17 Generally viewed as only being commercial if the price of oil is around or above $60, coal-to-liquids efforts may have taken off had the new energy abundance not squelched talk of such pursuits.18
We have more facts to draw upon when assessing the impact of the boom in shale gas (as opposed to tight oil) on carbon emissions. In the United States, the trends are clear. The advent of shale gas enabled the United States to bring down its emissions to their lowest absolute level in twenty years.19 Between 2005 and 2015, U.S. CO2 emissions related to the energy sector declined by 12 percent.20 In 2015, U.S. per capita CO2 emissions were as low as they have been at any point since the early 1960s.21 As made clear by the International Panel on Climate Change—an organization considered by many anti-fracking activists to be the gold standard—fracking was “an important reason for a reduction of GHG [greenhouse gas] emissions in the United States.”22 The IEA agreed, declaring in 2013 that, “The decline in energy-related CO2 emissions in the United States in recent years has been one of the bright spots in the global picture.23 One of the key reasons has been the increased availability of natural gas, linked to the shale-gas revolution.”
Why was this the case? The boom in cheap, plentiful American natural gas changed the economics of power plants. Due to the shale gas bonanza, the Henry Hub price of natural gas in the United States dropped from roughly $15 per mmbtu in 2005 to approximately a fifth of that price ten years later.24 Utilities did what made simple economic sense: They switched from fueling their power plants with coal to firing them up with natural gas, which has only half as many emissions associated with its use.25
Given the relative newness of the unconventional boom, there is not yet enough data to conclude definitively whether the consumption effect or the substitution effect will have a bigger impact on overall emissions. But we do have some basis for insight—at least for the question of unconventional gas, if not unconventional oil.
Several studies have sought to clarify the vexing question of whether the boom in unconventional gas is a blessing or curse for climate change. After a series of complex computations and modeling efforts, Richard Newell and Daniel Raimi, then both of Duke University, concluded that increased shale gas supply has a positive effect on climate by lowering greenhouse gas emissions in the U.S. economy as a whole.26 But their study suggests this decrease is extremely small (1.4 percent), a negligible amount compared to the reductions required to avert climate change. Lower emissions that result from less coal usage are largely—although not completely—offset by the displacement of renewable and nuclear energy and greater overall energy consumption. Interestingly, depending on which figures are used to calculate just how much methane is released into the atmosphere during natural gas production—still a subject of great debate—these results could move in either direction.
The IEA sought to make a comparable assessment at the international level. In a 2011 report, Are We Entering a Golden Age of Gas?, it compared expected global emissions in 2035 with emissions that would emerge in a scenario in which there was even more extensive global gas development.27 Natural gas displaces coal worldwide, with nearly half of the coal displaced coming from China. But, similar to the other studies focused on the United States, the net benefit in terms of overall emissions reductions is small, because of a decrease in the deployment of renewable and nuclear energy and an overall rise in energy consumption.28
The key takeaway is that the boom in shale gas can be an ally in the battle to combat climate change. But several steps are required in order to ensure that natural gas plays this positive role. Richard Newell, now the president of Resources for the Future, has underscored what is needed for natural gas to “be part of the climate solution, not part of the problem.”29 Perhaps most important, it is essential that natural gas substitute for coal.30 While this occurred seamlessly in the United States, the market does not necessarily ensure this will always be the case. With abundant natural gas, policies such as a carbon tax or a cap and trade system allowing companies or governments to trade allowances in carbon emissions, if designed correctly, can be cheaper to realize and can help ensure that it is coal—not renewables or other alternative energies—that lose out from a surge in natural gas.31 Ultimately, technologies such as carbon capture and storage will be essential if natural gas and other fossil fuels are to remain part of the global energy mix over the longer term;32 most scenarios depicting a global energy system where the threat of catastrophic climate change has been averted envision a “zero emissions” power sector.33
In Tension but Not Necessarily in Opposition
In sharp contrast to the mood at the turn of the century, when Big Oil and environmentalists found common cause, there is an emerging political strain in the United States that perceives a zero-sum game between nurturing the unconventional boom in American oil and gas and protecting the environment and combating climate change. There are some places where the two are in obvious tension—such as with the question over whether Federal lands should be open to oil and gas development. But, in general, an approach that sees the two as completely in opposition—and overwhelmingly prioritizes energy development over climate and the environment—is not only misguided, but carries real risks to U.S. interests generally and even to the unconventional boom specifically.
One of the greatest benefits of the rapid expansion of American oil and gas production has been in the realm of geopolitics. The shale boom and the consequent decrease in U.S. carbon emissions was essential to America’s ability to re-exert leadership at the global level on climate change. The fact that President Obama could approach China with a proven track record of decreasing emissions helped lubricate a U.S.–China climate agreement in November 2014; this bilateral accord was a springboard to the agreement forged at the Paris meeting of the United Nations Framework Convention on Climate Change thirteen months later.34
In the months that followed, 175 of the 193 UN member states signed the agreement and pledged specific steps to lower their own carbon emissions. Not only did this turn of events provide China and America a rare platform for cooperation, but it generated significant soft power for the United States. In playing this catalytic role on an issue of importance to so many countries in both the developed and developing world, the United States affirmed its interest and its ability to lead globally. These geopolitical gains are at risk since President Trump decided to formally withdraw the United States from the convention. Even if technology and civic activism enable America to decrease its emissions outside the climate agreement, the United States will have still lost the soft power it gained as its champion.
More tangibly, backtracking from the Paris agreement might—perhaps surprisingly—actually have a dampening effect on America’s unconventional boom. Although other countries have pledged to abide by the agreement even in the absence of U.S. leadership, concerns remain that other large emitters such as China, India, and Brazil will walk back their efforts to rein in carbon emissions. Should they do so, the world would consume more coal and almost certainly less natural gas; as discussed earlier, future global demand for natural gas in part depends on the seriousness with which the world approaches the question of climate change. This shift toward a less climate-friendly approach could dampen the expected surge of U.S. LNG, the export of which is completely consistent with the Trump Administration’s efforts to bolster oil and gas production and the number of jobs associated with it. Howard Rogers, a scholar at the Oxford Institute for Energy Studies, demonstrates that should demand for natural gas in Asia be less than anticipated in the five years out from 2017, the market would balance in one of three ways, including the curtailment of U.S. LNG exports.35
Those seeking aggressive deregulation in the interest of promoting the oil and gas boom should also keep some other risks in mind. While some regulations of the industry can and should be removed, the industry also needs to maintain a “social license” to operate. This license is not just a formal law or regulation, but is the trust and confidence of the communities in which the companies produce energy. In Europe, companies have essentially lost, or never gained, the social license for fracking and, as a result, European shale gas development is at a virtual standstill. Even in the United States, proposals to severely restrict or ban outright fracking—or the development of infrastructure to transport oil and gas—are on the rise.
Thus far, successful statewide bans on fracking have largely been limited to areas where little fracking has yet occurred or where resources are not believed to exist in commercial quantities. Maryland, for example, prohibits fracking although developers have shown little interest in the state. By contrast, New York sits atop part of the prolific Marcellus shale formation, but has never allowed the practice. Yet over the course of 2015 and 2016, a raft of proposals surfaced across the country that, if implemented, would place significant curbs on fracking.36 A large increase in fracking prohibitions—particularly in resource-rich states or on the national scale—would severely undercut the new era of U.S. energy abundance.
The industry could lose its social license to operate in a variety of ways. Fracking has in many ways already tried the patience and risk tolerance of some American communities. Just ask the residents of Sparks, Oklahoma, whose Saturday night on November 5, 2011, was interrupted by an earthquake—later attributed to the disposal of waste water from fracking—that registered 5.6 on the Richter scale.37 Or solicit the views of Hugh Fitzsimons, a bison rancher in Dimmit County, Texas, who attributes the two-thirds drop in his well water that occurred from 2009 to 2012 to the large volumes of water used for fracking operations in neighboring counties.38 Or you may wish to talk to Mike Lozinski, an air traffic controller in Denver, who complains that the noise from local fracking operations has disturbed his sleep so fundamentally that he is sometimes no longer capable of doing his job safely.39 Or even chat with the residents of Pavillion, Wyoming, who in 2010 were told by the Federal government not to shower without proper ventilation while it investigated concerns that fracking had caused serious water contamination.40
Even as the benefits of the energy boom to the United States have mushroomed, public discomfort with fracking has increased. Many question whether any amount of regulation can make the practice safe. Others, such as “Keep It in the Ground” environmental groups, seem less interested in this question, focusing instead on stopping the production of fossil fuels regardless of the alternatives. They have grown in strength and prominence, successfully influencing policymaking and public opinion at both the national and subnational levels.
A Goldilocks Solution?
Fortunately, the tradeoff between advancing America’s oil and gas abundance and protecting the environment and addressing climate change is not as stark as some in both the Trump Administration and the environmental community contend. There is certainly room to remove some regulations on oil and gas production and to support the construction of oil and gas infrastructure that will help increase production and benefit the economy more generally—without assuming that these steps need to come at the expense of the environment.41 In other instances, new technologies and practices may provide the answer to legitimate environmental concerns surrounding fracking.
Yet even with advances in technology, certain regulations will be important to maintain. Advocates for oil and gas industries should think of these regulations as dual-purpose: They both protect the environment and help companies maintain the social license to operate. Happily, such regulations need not be “job killers.” In fact, a number of initiatives have identified a set of best practices and measures that can help ensure the development of tight oil and shale gas in a responsible, sustainable way. Concerns that the implementation of these best-practice measures will undermine the economic competitiveness of the boom are also understandable, but not well founded.42 The work of Michael Porter of Harvard Business School demonstrates that embracing such best practices would increase the costs of developing these resources by only a nominal amount.43
Americans will continue to differ on the question of what is the appropriate amount of regulation and even whether the states or the Federal government is the desirable entity to legislate and enforce regulations. But we should all stop viewing a desire to nurture the energy boom and to protect the environment and address climate change as pursuits in total opposition to one another. Yes, there are places where the two will be in tension. But in many other domains, they have complementary objectives.
Certainly, a drive to keep oil and gas in the ground or to obstruct any and all pipelines could backfire, especially if the alternatives are coal and the transport of oil through riskier means like railways.44 Similarly, oil and gas development with little consideration for the environment or climate change carries costs and risks—from diminishing America’s soft power to potentially curbing LNG exports to risking the loss of the social contract companies require to operate. Moreover, whereas some deregulation creates more space for economic activity, other regulations have in the past spurred significant innovations and helped keep U.S. businesses competitive abroad.45 In a world increasingly cognizant of the importance of meeting its energy needs while protecting its environment, America’s global companies will not only be focused on domestic requirements, but will also keep one eye on the need to meet standards in their foreign markets.46
What America needs now is not the zeal of either extreme, but the moderation of a Goldilocks solution. Such an approach is not as farfetched as American political discourse might make one think. It is not only in the realm of academia or think tanks where such compromises can be envisioned. Several U.S. companies, including ExxonMobil and General Motors, have voiced support for a carbon tax.47 Some environmentalist groups—such as the Environmental Defense Fund—have dedicated themselves to working with industry to find mutually agreeable solutions. For those interested in finding a Goldilocks solution, the building blocks are in place.48
1In 2016, some majors began once again to make investments in renewable energy, although such investments were very small in relation to their overall capital budget. See Joe Ryan, “Big Oil Unexpectedly Backing Newest Non-Fossil Fuels,” Bloomberg, May 10, 2016, https://www.bloomberg.com/news/articles/2016-05-10/big-oil-unexpectedly-backs-newest-non-fossil-fuels.
2See, for instance, Lord John Browne, Executive Chairman of L1 Energy and former CEO of BP, “The New Energy Environment” (seminar, Harvard Kennedy School of Government, Cambridge, MA, March 10, 2016).
3Richard K. Lattanzio, “Canadian Oil Sands: Life-Cycle Assessments of Greenhouse Gas Emissions,” Congressional Research Service, March 10, 2014, 2, www.fas.org/sgp/crs/misc/R42537.pdf. Some studies calculated this percentage to be significantly lower. See, for instance, IHS Cambridge Energy Research Associates, Oil Sands, Greenhouse Gases, and US Oil Supply: Getting the Numbers Right (Cambridge, MA: IHS CERA, 2010), https://cdn.ihs.com/ihs/cera/Oil-Sands-Greenhouses-Gases-and-US-Oil-Supply.pdf.
4International Energy Agency, World Energy Outlook 2016 (Paris: OECD Publishing, 2016), November 16, 2016, 136, http://www.iea.org/newsroom/news/2016/november/world-energy-outlook-2016.html.
5See Adam R. Brandt, “Converting Oil Shale to Liquid Fuels: Energy Inputs and Greenhouse Gas Emissions of the Shell in Situ Conversion Process,” Environmental Science & Technology 42, no. 19 (2008): 7489–95, http://pubs.acs.org/doi/pdf/10.1021/es800531f; Stefan Unnasch et al., Assessment of Life Cycle GHG Emissions Associated with Petroleum Fuels (Portola Valley, CA: Life Cycle Associates, LLC, February, 2009), 61, www.newfuelsalliance.org/NFA_PImpacts_v35.pdf.
6Global unconventional numbers are from International Energy Agency, World Energy Outlook 2016, 136. As for the United States, tight oil production constituted 53 percent of U.S. oil production as of January 2017. “Table: Oil and Gas Supply,” Annual Energy Outlook 2017, U.S. Energy Information Administration, https://www.eia.gov/outlooks/aeo/data/browser/#/?id=14-AEO2017®ion=0-0&cases=ref2017&start=2015&end=2018&f=A&linechart=ref2017-d120816a.23-14-AEO2017~ref2017-d120816a.8-14-AEO2017~ref2017-d120816a.10-14-AEO2017&ctype=linechart&sid=ref2017-d120816a.10-14-AEO2017~ref2017-d120816a.8-14-AEO2017~ref2017-d120816a.23-14-AEO2017&sourcekey=0.
7Jesse Esparza et al., “Argentina Seeking Increased Natural Gas Production from Shale Resources to Reduce Imports,” U.S. Energy Information Administration, February 10, 2017, https://www.eia.gov/todayinenergy/detail.php?id=29912.
8For instance, see IHS Energy, Comparing GHG Intensity of Oil Sands and the Average US Crude Oil (Calgary, IHS, May 2014), 11, https://www.ihs.com/products/energy-industry-oil-sands-dialogue.html?ocid=cera-osd:energy:print:0001.
9Brandt is quoted in Tona Kunz, “Analysis Shows Greenhouse Gas Emissions Similar for Shale, Crude Oil,” Argonne National Laboratory, October 15, 2015, https://www.anl.gov/articles/analysis-shows-greenhouse-gas-emissions-similar-shale-crude-oil. A more recent study concludes that life cycle greenhouse gas emissions in the Bakken are comparable to other crudes because flaring is “largely offset at the refinery due to the physical properties of this tight oil.” Ian J. Laurenzi, Joule A. Bergerson, and Kavan Motazedi, “Life cycle greenhouse gas emissions and freshwater consumption associated with Bakken tight oil,” Proceedings of the National Academy of Sciences, 113, no. 48 (2016): 11, http://www.pnas.org/content/113/48/E7672.full.
10In the “High Oil and Gas Research and Technology Case,” the United States produces 14 percent more oil overall (crude plus NGLs) and 25 percent more tight oil in 2020 than in the EIA’s reference case. These numbers jump to 53 percent more oil overall and 90 percent more tight oil in the high-resource case than in the reference one when one looks out to 2040. “Table: Oil and Gas Supply,” Annual Energy Outlook 2017, U.S. Energy Information Administration, https://www.eia.gov/outlooks/aeo/data/browser/#/?id=14-AEO2017®ion=00&cases=ref2017~lowprice~highrt&start=2015&end=2020&f=A&linechart=highrt-d120816a.23-14-AEO2017~ref2017-d120816a.23-14-AEO2017~ref2017-d120816a.8-14-AEO2017~highrt-d120816a.8-14-AEO2017~ref2017-d120816a.10-14-AEO2017~highrt-d120816a.10-14-AEO2017&ctype=linechart&sid=highrt-d120816a.23-14-AEO2017~ref2017-d120816a.23-14-AEO2017~ref2017-d120816a.8-14-AEO2017~highrt-d120816a.8-14-AEO2017~ref2017-d120816a.10-14-AEO2017~highrt-d120816a.10-14-AEO2017&sourcekey=0.
11See U.S. Energy Information Administration, Annual Energy Outlook 2017 (Washington, DC: U.S. Department of Energy, 2017), https://www.eia.gov/outlooks/aeo/data/browser/#/?id=17-AEO2017®ion=1-0&cases=ref2017~highrt&start=2015&end=2050&f=A&linechart=ref2017-d120816a.40-17-AEO2017.1-0~ref2013-d102312a.41-17-AEO2013.1-0~highrt-d120816a.40-17-AEO2017.1-0&map=highrt-d120816a.3-17-AEO2017.1-0&c.
12“Table: Energy-Related Carbon Dioxide Emissions by Sector and Source,” Annual Energy Outlook 2017, U.S. Energy Information Agency, https://www.eia.gov/outlooks/aeo/data/browser/#/?id=17-AEO2017®ion=1-0&cases=ref2017~highprice~lowprice~highrt&start=2015&end=2050&f=A&linechart=ref2017-d120816a.43-17-AEO2017.1-0~highrt-d120816a.43-17-AEO2017.1-0&map=highprice-d120816a.3-17-AEO2017.1-0&ctype=linechart&sid=highrt-d120816a.43-17-AEO2017.1-0~~~~ref2017-d120816a.43-17-AEO2017.1-0~~~~~&sourcekey=0.
13See “Global Liquid Fuels,” Short-Term Energy and Summer Fuels Outlook, U.S. Energy Information Administration, April 11, 2017, https://www.eia.gov/outlooks/steo/report/global_oil.cfm; International Energy Agency, Oil Market Report (Paris: OECD/IEA Publishing, 2017), https://www.iea.org/media/omrreports/tables/2017-03-15.pdf.
14Pierpaolo Cazzola et al., “Production Costs of Alternative Transportation Fuels: Influence of Crude Oil Price and Technology Maturity,” International Energy Agency, 2013, 9, www.iea.org/publications/freepublications/publication/FeaturedInsights_AlternativeFuel_FINAL.pdf.
15This method is officially called the Fischer-Tropsch process. It was developed by Germany during World War II as the country struggled to maintain adequate access to oil. For more information on coal to liquid technology, see James T. Bartis, Frank Camm, and David S. Ortiz, Producing Liquid Fuels from Coal: Prospects and Policy Issues (Santa Monica, CA: RAND Corporation, 2008), http://www.rand.org/pubs/monographs/MG754.html.
16“Coal-to-Liquid Boondoggle: A Risky Solution to America’s Energy Woes,” Washington Post, June 18, 2007, www.washingtonpost.com/wp-dyn/content/article/2007/06/17/AR2007061700945.html; “S. 154 (is)-Coal-to-Liquid Fuel Energy Act of 2007,” U.S. Government Publishing Office, https://www.gpo.gov/fdsys/pkg/BILLS-1105154is/content-detail.html.
17“Accelergy Unveils Pilot Plant and Signals Move Into Chinese Market,” Business Wire, June 29, 2011, www.businesswire.com/news/home/20110629006179/en/Accelergy-Unveils-Pilot-Plant-Signals-Move-Chinese.
18This in $60 in 2007 dollars. Bartis, Camm, and Ortiz, Producing Liquid Fuels from Coal: Prospects and Policy Issues.
19Christopher Martin, “U.S. Carbon Emissions Falling to Two-Decade Low in Coal Shift,” Bloomberg, April 9, 2015, www.bloomberg.com/news/articles/2015-04-09/u-s-carbon-emissions-falling-to-two-decade-low-in-coal-shift.
20“U.S. Energy-Related Carbon Dioxide Emissions, 2015,” U.S. Energy Information Administration, March 16, 2017, https://www.eia.gov/environment/emissions/carbon/.
21“CO2 emissions (metric tons per capita.”) The World Bank, http://data.worldbank.org/indicator/EN.ATM.CO2E.PC?locations=US; “Inventory of U.S. Greenhouse Gas Emissions and Sinks,” Environmental Protection Agency, April 14, 2017, 3-33, https://www.epa.gov/sites/production/files/2017-02/documents/2017_complete_report.pdf.
22Thomas Bruckner et al., “Energy Systems,” in Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change, ed. Ottmar Edenhofer et al. (Cambridge, U.K.: Cambridge University Press, 2014), 527, https://www.ipcc.ch/pdf/assessment-report/ar5/wg3/ipcc_wg3_ar5_chapter7.pdf.
23International Energy Agency, Redrawing the Energy-Climate Map: World Energy Outlook Special Report (Paris: OECD Publishing, June 10, 2013), 28, www.worldenergyoutlook.org/media/weowebsite/2013/energyclimatemap/RedrawingEnergy/ClimateMap.pdf.
24“Henry Hub Natural Gas Spot Price,” U.S. Energy Information Administration, November 2, 2016, https://www.eia.gov/dnav/ng/hist/rngwhhdd.htm.
25See Nathan Hultman, Dylan Rebois, Michael Scholten, and Christopher Ramig, “The Greenhouse Impact of Unconventional Gas for Electricity Generation,” Environmental Research Letters 6 (2011), http://iopscience.iop.org/article/10.1088/1748-9326/6/4/044008/pdf; Ernest J. Moniz et al., The Future of Natural Gas: An Interdisciplinary MIT Study (Cambridge: MIT, 2011), https://energy.mit.edu/wp-content/uploads/2011/06/MITEI-The-Future-of-Natural-Gas.pdf; Stephen P. A. Brown, Alan J. Krupnick, and Margaret A. Walls, “Natural Gas: A Bridge to a Low-Carbon Future?,” (Issue Brief 09-11, Resources for the Future and National Energy Policy Institute, December 2009), www.rff.org/RFF/Documents/RFF-IB-09-11.pdf; Michael A. Levi, “Climate Consequences of Natural Gas as a Bridge Fuel,” Climate Change 118, no. 3 (2013): 609–23, www.cfr.org/natural-gas/climate-consequences-natural-gas-bridge-fuel/p29772.
26Richard G. Newell and Daniel Raimi, “Implications of Shale Gas Development for Climate Change,” Environmental Science & Technology 48, no. 15 (April 22, 2014), http://pubs.acs.org/doi/abs/10.1021/es4046154. Also see Haewon McJeon et al., “Limited Impact on Decadal-Scale Climate Change from Increased Use of Natural Gas,” Nature 514 (October 15, 2014): 482–85, www.nature.com/nature/journal/v514/n7523/full/nature13837.html.
27International Energy Agency, World Energy Outlook 2011 Special Report: Are We Entering a Golden Age of Gas? (Paris: OECD Publishing, 2011), 37–38, www.worldenergyoutlook.org/media/weowebsite/2011/WEO2011_GoldenAgeofGasReport.pdf.
29Richard Newell, in-person conversation with author, Houston, Texas, March 9, 2017.
30Richard Newell also stressed the importance of minimizing the release of methane in natural gas production, as indicated by his study referenced earlier.
31Newell and Raimi, “Implications of Shale Gas Development for Climate Change.”
32For more on carbon, capture, and storage, see Michael Gebert Faure and Roy A. Partain, Carbon Capture and Storage: Efficient Legal Policies for Risk Governance and Compensation (Cambridge: MIT Press, 2017).
33The IEA makes this point in another way in its 2016 World Energy Outlook. “On the one hand, gas is too carbon intensive to take a long-term lead in the decarbonisation of the energy sector. Uncertainty over the extent of leakage of methane, a potent GHG, along the gas supply chain also cast a shadow over the fuel’s environmental credentials. On the other hand, natural gas is the least carbon intensive of the fossil fuels and thus burning gas is a much more efficient way to use a limited carbon budget than combusting coal or oil. Gas is especially advantageous to the transition if it can help smooth the integration of renewables into power systems along the way.” International Energy Agency, World Energy Outlook 2016, 163.
34It is important to note two things, however significant this agreement was in catalyzing further action. First, China agreed to reduce its carbon intensity and to cap total CO2 emissions, but it did not agree to decrease emissions. Second, even if all countries keep to the pledges they made in the Paris Agreement, the effort will still fall short of what is needed to avert “catastrophic” climate change.
35Howard Rogers, “The Forthcoming LNG Supply Wave: A Case of ‘Crying Wolf ’?” (Energy Insight: 4, Oxford Institute for Energy Studies, University of Oxford, Oxford, U.K., February 2017), 8-9, https://www.oxfordenergy.org/wpcms/wp-content/uploads/2017/02/The-Forthcoming-LNG-Supply-Wave-OIES-Energy-Insight.pdf.
36For instance, a contentious place of legislation in Colorado would introduce significant setback provisions that some see as effective bans on fracking. See John Fryer, “oil, gas school setbacks bill clears Colorado House in party-line vote, “Longmont Times-Call, March 29, 2017, www.timescall.com/longmont-local-news/ci_30887589/colorado-house-approves-lafayette-rep-mike-footes-oil.
37John Daly, “U.S. Government Confirms Link Between Earthquakes and Hydraulic Fracturing,” Oilprice.com, November 8, 2011, http://oilprice.com/Energy/Natural-Gas/U.S.-Government-Confirms-Link-Between-Earthquakes-and-Hydraulic-Fracturing.html. Also see National Research Council et al., Induced Seismicity Potential in Energy Technologies (Washington, D.C.: National Academies Press, 2013).
38Kate Galbraith, “As Fracking Increases, So Do Fears About Water Supply,” New York Times, March 7, 2013, www.nytimes.com/2013/03/08/us/as-fracking-in-texas-increases-so-do-water-supply-fears.html?pagewanted=all.
39John Fryar, “Weld County Resident Says Fracking Is Costing Him Sleep,” Times-Call Local News, August 16, 2014, www.timescall.com/longmont-local-news/ci_26350144/weld-county-resident-says-fracking-is-costing-him.
40Abrahm Lustgarten, “Feds Warn Residents Near Wyoming Gas Drilling Sites Not to Drink Their Water,” ProPublica, September 1, 2010, https://www.propublica.org/article/feds-warn-residents-near-wyoming-gas-drilling-sites-not-to-drink-their-wate.
41For instance, deregulation makes sense where federal regulation duplicate state regulation of fracking.
42Some technological innovations will be more expensive to deploy. For instance, David Burnett, a professor at Texas A&M, estimates that producing shale gas with waterless fracking could be 25 percent more expensive. (Waterless fracking, however, is not considered among the “best practices” as the technology is still nascent.) This number, however, is likely to fall as the technologies are perfected—and could seem less burdensome if policy changes increased the now extremely low cost of freshwater in many states. See Patrick J. Kiger, “Green Fracking? 5 Technologies for Cleaner Shale Energy,” National Geographic, March 21, 2014, http://news.nationalgeographic.com/news/energy/2014/03/140319-5-technologies-for-greener-fracking/.
43In a 2016 presentation, Michael Porter demonstrated that complying with the performance standards suggested by the Center for Sustainable Shale Development in the development of an average well in the Marcellus would only cost 1–2 percent of the lifetime revenues of the well. This is less than the average daily price change in the Henry Hub spot price. Michael Porter, “Realizing America’s Unconventional Energy Opportunity” (presentation, GLOBE 2016, Vancouver, March 3, 2016), Slide 12.
44For an interesting preliminary study that concludes the costs of air pollution and CO2 emissions are significantly greater for rail than pipeline, see Karen Clay et al., “Economics and Externalities of Moving Crude Oil by Pipelines and Railroads: Evidence From the Bakken Formation” (presentation, American Economic Association, Chicago, IL, January 8, 2017).
45See “Innovation through Regulation,” Economist, June 2, 2009, www.economist.com/node/13766329.
46See, for example, Trefor Moss, “Ford to Make Electric Cars in China Amid Green Drive,” Wall Street Journal, April 7, 2017, https://www.wsj.com/articles/ford-to-make-electric-cars-in-china-amid-green-drive-1491475032.
47Many companies favor a taxes on carbon in order to provide certainty around investment decisions. Tim Puko, “Big Oil Steps Up Support for Carbon Tax,” Wall Street Journal, June 20, 2017, https://www.wsj.com/articles/big-oil-steps-up-support-for-carbon-tax-1497931202?mg=prod/accounts-wsj#.
48The Environmental Defense Fund openly states that part of its ability to make an impact depends on its partnerships with corporate actors. See “Partnerships: The Key to Scalable Solutions,” Environmental Defense Fund (EDF), https://www.edf.org/approach/partnerships.