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Coal and Gas: A Fracturing Marriage
June 22, 2012 Environment

A few weeks ago the Wall Street Journal ran a piece (I don't have the link off-hand, I am on the road) discussing how the Sierra Club has thrown natural gas under the bus (call it Sierra Clubbed! Update: Chris M. found the link, thanks!). They have a movement bubbling called "Beyond Gas" or something like that. But the Club was/is famous for its "Beyond Coal" movement. And the Beyond Coal movement is looking like it's going to be successful.

Why?

Because of gas. Really.

So, let's do a quick review before I get to the data. The emergence of natural gas has led to a dramatic decrease in electricity costs. The energy equivalent cost of gas is less than $20 per barrel of oil – or about 1/5 to 1/4 of the cost of actual oil (the EIA has the data). In Pennsylvania, electricity bills for an average household have been lowed by over $1,000 (yes, $1,000). Think of how many social programs have delivered that kind of a real benefit especially without making them a direct transfer? And remember that this disproportionately favors lower income households, as energy makes up a larger share of their expenditures than richer households. Beyond this, we explored yesterday the potential for gas to clean up water in areas where coal mining was/is popular.

But perhaps most important, natural gas — largely due to fracking — has led the way in reducing carbon emissions. And seriously, has anything we have done on the policy front over the last 25 years done much to eliminate CO2?  In just 12 years, coal's market share of generation in the US has fallen from 52% to 37% today. Renewables picked up five percentage points in market share while gas has picked up 10. Together, it is estimated that this change has reduced energy related carbon emissions in the US by 18%. It has amounted to a 3% decrease in world carbon pollution. These are huge reductions. The aggregate one billion tons avoided is worth approximately $25 billion according to the damage estimates of carbon emissions via the IPCC.

The shale boom is very responsible for this change. The rapid decrease in the price of coal has led many power companies to shift from burning coal to burning gas – a transition that is far more seamless than converting coal plants to sequestration and capture plants or converting to solar or some other production technique. It's almost unthinkable that shale gas is being demonized like it has been and the "E"nvironmental groups would do themselves, their members, the American public and the world a great favor by making this observation a bit more regularly. If it is true that we want clean, safe, affordable energy, then we ought to celebrate large moves in that direction, particularly as some of the false idols of alternatives are not going to get us there – either environmentally or in the wallet. Coming out against any and every new energy source that comes our way seems to indicate that the problem is not fossil fuels at all, but something else. If you want to maintain the support of "middle America" that tune has to change. I doubt it will.

UPDATE: Just as this post hit the press, I saw this compete hack job. What country has reduced carbon emissions the most since 2005?

"2" Comments
  1. Here's your WSJ link:
    "Review & Outlook: Sierra Clubs Natural Gas – WSJ.com" ( http://on.wsj.com/Llha71 )

  2. My wife and I have made numerous trips to Mansfield, PA, where our two Labrador retrievers have spent weeks at the doggie equivalent of Sandals Resort in order to find love and get bred.  (Heidi, the chocolate Lab, is due to have cute little puppies on July 10.  Anyone want to buy a puppy?) 
     
    The Labrador breeder up there has already had one gas well drilled on her property, and Shell plans to drill two more wells before they frack the ground a mile below her property.  The first well has not despoiled the environment at all — there is plenty of forest, farmland and unfarmed fields to support huge herds of deer and all the Disney animals you can think of.  What the gas well has really done is made our breeder really rich. She plans to sell her place in the cold mountains of PA and move to Wilmington, North Carolina.   Her neighbors have also made a ton of money on advance payments from Shell and on royalties that will be in the tens of thousands of dollars per month for a decade or more.  Yes, eventually the gas will run out and those royalties will stop, but meanwhile  they will become multi-millionaires, something that would not occur if they milked Holsteins twice a day for another decade or two. 
     
    Mansfield is booming.  People in the southern part of the state, being envious about all this wealth going to the dumb farmers in the northern counties, want to tax the producers of the shale gas.  Those taxes would only make some of the shale unprofitable to drill for, taking money right out ot the pockets of the private landowners to the north.  The state, meanwhile, owns vast tracts of gamelands that lie between private farms.  If the state were smart, they would strike a deal with Exxon or Shell or Range Resources.  All of the oil companies drill for shale gas using redundant safeguards against the dreaded pollution of groundwater and streams. 
     
    It's good to see New York considering opening five southern tier counties to gas drilling, but the Marcellus Shale might even extend to Albany County.  How about setting up a drilling rig in front of the state Capitol?  There are plenty of slummy properties in Albany where the property owners could use a few thousand a month royalties, dontcha think?

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