No such thing as a free lunch?
The shale gas boom has produced an unexpected freebie for the United States: lower carbon dioxide emissions. The boom in shale gas production has allowed natural gas to replace coal on a substantial scale for electricity production (see my previous post). And since natural gas produces one-half the CO2 emissions of coal, that has led to a surprising decrease in US emissions between 2011 and 2012.
In the first 6 months of 2012, US emissions were down 6 percent from the same period in 2011. That is quite dramatic!
See all the numbers from the EIA report here.
You can see the same trend in this graphic from EDGAR, as well. EU emissions are also down, consistent with the EU's concerted efforts to reduce CO2 emissions under the EU Emissions Trading Scheme (ETS). In the US, however, the reduction is market-based, rather than mandate-based. The US currently has no federal policy to tax or cap carbon emissions. (Unfortunately, China is not following the trend, as you can clearly see below.)
Some even predict that, given the increasing shift from coal to natural gas, the US could see its carbon emissions drop to near 1990 levels (a common benchmark for climate change abatement) by the end of the year!
Reaching 1990 levels would be a historic moment and would bring attention to natural gas as a potential "bridge" technology to reduce carbon emissions in the short-term while we further develop renewable energy for the long-term.
It seems that with natural gas, the US has indeed found a "free lunch."
