WASHINGTON -- The shale gas boom in the United States won't do much to cut carbon dioxide emissions or alleviate global warming. That's because, in addition to killing off coal-fired plants, cheap gas will also edge out cleaner energy sources such as wind, solar and nuclear.
On the flip side, the glut of natural gas from fracking will make the country a bit wealthier and clean up other air pollutants in the decades ahead.
Those are the conclusions of a new report from Stanford's Energy Modeling Forum, which convened 50 experts and 14 different modeling teams to look at how the surge in natural gas production will transform the U.S. economy.
Here are four key findings:
1. The shale gas boom will provide a small boost to the U.S. economy. On average, models predicted that the surge in natural gas production would raise gross domestic product by about $70 billion per year during the next several decades (in current dollars). "Although this amount appears large," the report notes, "it represents a relatively modest 0.46 percent of the U.S. economy."
Why so modest? The surge in natural gas is great for oil and gas companies, and it will help chemical firms that use natural gas as a raw material. Yet these industries are a tiny slice of the U.S. economy, accounting for less than 1 percent of employment. And while cheaper energy costs do benefit consumers, the impact on GDP is fairly minor, all told.
2. The shale gas boom won't do much to solve climate change. In recent years, the glut of natural gas has helped displace coal power in the United States and reduce carbon dioxide emissions significantly. (Burning natural gas for electricity produces about half the carbon dioxide of burning coal.)
Yet many experts in the Stanford study don't expect this trend to continue. That's because cheap natural gas will also displace even lower-carbon sources of energy such as nuclear, wind and solar. What's more, low natural gas prices will discourage efforts to conserve energy and boost efficiency.
As a result, the majority of models expect U.S. carbon emissions to rise slightly between 2010 and 2035, whether shale gas production is low or high.
3. Natural gas will, however, help clean up other air pollutants. Natural gas is considerably cleaner than coal when it comes to other types of harmful air pollution like sulfur dioxide and nitrogen dioxide.
Cleaner air, in turn, will make the country slightly richer by improving health and extending lives. "Average emission damages decline by $1 billion each year (2010 dollars) for sulfur dioxide and by $0.25 billion each year for nitrogen oxides," the study notes.
4. There's a fair bit of disagreement between forecasts. Note that we've mainly been discussing the aggregate conclusions of all these different models. But some of the forecasts do vary significantly.
One key variable is price: Some experts expect natural gas prices to stay roughly flat between now and 2020, going from $4 per thousand cubic feet today to about $4.03 by the end of the decade. Others expect a sharper jump upward to $6.23 per thousand cubic feet by 2020 and even higher thereafter.
The study notes that every $1 drop in the price of a thousand cubic feet of natural gas can boost the economy by about $55 billion.