Is Natural Gas A Free-Market Solution to CO2 Emissions?

From the AP: We have gotten lucky. The cheap price of natural gas has resulted in a free-market-caused reduction in CO2 emissions for the US:

"the U.S. Energy Information Agency, a part of the Energy Department, said this month that energy related U.S. CO2 emissions for the first four months of this year fell to about 1992 levels."

...

"The boom in gas production has come about largely because of hydraulic fracturing, or fracking. Large volumes of water, plus sand and chemicals, are injected to break shale rock apart and free the gas."

This has surprised a number of climate scientists, including Michael Mann

"Michael Mann, director of the Earth System Science Center at Penn State University, said the shift away from coal is reason for "cautious optimism" about potential ways to deal with climate change. He said it demonstrates that "ultimately people follow their wallets" on global warming."

...

"Mann called it "ironic" that the shift from coal to gas has helped bring the U.S. closer to meeting some of the greenhouse gas targets in the 1997 Kyoto treaty on global warming, which the United States never ratified."

However, this is not a long term solution:

"while natural gas burns cleaner than coal, it still emits some CO2. And drilling has its own environmental consequences, which are not yet fully understood."

...

" leaks of methane from natural gas wells could be pushing the U.S. over the Kyoto target for that gas."

"Environmentalists say that the fluids [from hydraulic fracturing] can pollute underground drinking water supplies and that methane leaks from drilling cause serious air pollution and also contribute to global warming. The industry and many government officials say the practice is safe when done properly. But there have been cases in which faulty wells did pollute water, and there is little reliable data about the scale of methane leakage"

And what the free market gives, it can also take away:

"Coal and energy use are still growing rapidly in other countries, particularly China, and CO2 levels globally are rising, not falling. Moreover, changes in the marketplace - a boom in the economy, a fall in coal prices, a rise in natural gas - could stall or even reverse the shift. For example, U.S. emissions fell in 2008 and 2009, then rose in 2010 before falling again last year."

...

"Jason Hayes, a spokesman for the American Coal Council, based in Washington, predicted cheap gas won't last.

"Coal is going to be here for a long time. Our export markets are growing. Demand is going up around the world. Even if we decide not to use it, everybody else wants it," he said."

So we should be skeptical the market will ultimately provide a solution to the issue of harmful emissions. This switch was merely luck. People aren't switching to natural gas because it is cleaner. They are doing it because it is cheaper. And it does not necessarily have to be the case the cheapest source of energy is also the cleanest. And natural gas may also be a double edged sword on the road to better renewable energies:

""Installation of new renewable energy facilities has now all but dried up, unable to compete on a grid now flooded with a low-cost, high-energy fuel," two experts from Colorado's Renewable and Sustainable Energy Institute said in an essay posted this week on Environment360, a Yale University website."

However, natural gas may still an excellent short term solution to the problem:

"Even with such questions, public health experts welcome the shift, since it is reducing air pollution."

...

"Power plants that burn coal produce more than 90 times as much sulfur dioxide, five times as much nitrogen oxide and twice as much carbon dioxide as those that run on natural gas, according to the Government Accountability Office, the investigative arm of Congress. Sulfur dioxide causes acid rain and nitrogen oxides lead to smog."

...

"Wind supplied less than 3 percent of the nation's electricity in 2011 according to EIA data, and solar power was far less. Estimates for this year suggest that coal will account for about 37 percent of the nation's electricity, natural gas 30 percent, and nuclear about 19 percent."

...

"Despite unanswered questions about the environmental effects of drilling, the gas boom "is actually one of a number of reasons for cautious optimism," Mann said. "There's a lot of doom and gloom out there. It is important to point out that there is still time" to address global warning."

In addition, clean and/or renewable energies face fundamental problems if they want to be the sole provideers of energy in the US. It isn't always windy. It isn't always sunny. What can we do about nuclear waste? We need something that will fill in the gaps where clean and/or renewable energies fail. Natural gas my be that fill.

For a more thorough analysis, see Brad Plumer's post on Ezra Klein's WONKBLOG.