Stanford Report Shows Hydraulic Fracturing Opponents Are Still Wrong

For years, opponents of hydraulic fracturing have argued that expanding shale development would be “game over” for the planet.  ‘Gasland’ director Josh Fox has dramatically proclaimed that “fracked gas is the worst fuel you can develop with respect to climate change,” while the Sierra Club has called shale gas a “recipe for climate disaster.” Cornell University activist Anthony Ingraffea said natural gas developed from shale is a “gangplank to more warming.”

But last week, Stanford University’s Energy Modeling Forum (EMF) released report showing that shale gas development does not spell climate disaster, and will in fact help reduce air pollution and pump $70 billion per year into the economy. Eager to jump on the climate story, anti-fracking folks such as Joe Romm of Climate Progress typed up a post declaring that a “major study projects no long term benefits,” while John Upton of Grist wrote, “Fracking won’t fix the climate.”

Romm and many others missed the forest for their own planted trees, because by not projecting a climate catastrophe (more on that later), the EMF report actually debunked one of the most common talking points among activists.

Not only that, but EMF also made an important conclusion with respect to air pollution: “the average emission damages decline by $1 billion (2010 dollars) each year for sulfur dioxide and by $0.25 billion each year for nitrogen oxides” (p. 9).

For context, the Natural Resources Defense Council has declared that hydraulic fracturing sites “can emit dozens of toxic air pollutants, including benzene, toluene, formaldehyde, and more,” which “pose health risks ranging from asthma to neurological conditions to cancer.” Earthworks put it this way: Oil and gas facilities “are allowed to release hundreds of tons of air pollutants on an annual basis, including VOCs, hazardous air pollutants, NOx, particulate matter, carbon monoxide, sulfur dioxide and hydrogen sulfide.”

Could it be that the groups making such explosive charges are doing so merely to instill fear, and not based on a credible risk to public health? Perish the thought!

Emissions and economic growth

Regarding greenhouse gas emissions and future shale development, the EMF study’s results were mixed. The authors noted that natural gas use “will decrease total downstream emissions,” but that other factors (such as economic growth) could offset those reductions. The study thus does not conclude natural gas is a panacea (few would claim that anyway), but it also demonstrates why allegations of “climate disaster” are without merit.

It’s also important to note that numerous organizations that have found significant decreases in U.S. greenhouse gas emissions, reductions that are attributable to the increased development and utilization of natural gas.  Just this week, Energy Information Administration (EIA) found that energy-related carbon emissions declined 3.8 percent in 2012, which means that emissions are at their lowest levels since 1994.  The single biggest reason for the decline in CO2 emissions from electricity production, according to EIA, was the use of natural gas.

Of course, EIA’s study follows a report earlier this year by the International Energy Agency (IEA), which also noted a 3.8 percent drop in U.S. CO2 emissions in 2012, even as emissions everywhere else in the world increased by 1.4 percent.  As IEA explained, “One of the key reasons has been the increased availability of natural gas, linked to the shale gas revolution.”

A number of reports have also found a dramatic and rapid reduction of air pollutants of all kinds thanks to natural gas: the Pennsylvania Department of Environmental Protection found that over 500,000 tons of air emissions have been eliminated from the state’s air, while the Breakthrough Institute found that natural gas and the “associated surge in fracking have dramatically reduced emissions across Pennsylvania.”

When EMF addresses economic impacts, the authors conclude that shale development will generate $70 billion per year, or about $1.1 trillion dollars over the entire modeled time period. As Energy Tomorrow pointed out, that’s more than the entire motion picture industry, which contributes about $60.2 billion.

Other studies have concluded that the impact from shale is actually much larger. A report by McKinsey and Company ranks energy (including shale) as the biggest “game changer” available, finding that “the shale boom could add as much as $690 billion a year to GDP and create up to 1.7 million jobs across the economy by 2020.”

More recently, IHS CERA found that by 2020 shale development will create 3.3 million jobs, provide over $125 billion in federal and state tax revenue, and more than $468 billion in annual GDP contributions.

And it doesn’t stop with GDP and jobs: IHS CERA also found that, thanks to shale development, families will save $2,000 a year in their energy bills by 2015 and $3,500 a year by 2025.

It only makes sense that $3,500 a year energy cost savings per family would help provide an economic boost all around, while cheaper energy will allow businesses to create thousands of new jobs across all sectors of the economy.

EMF expressed some concerns about the “game changing” aspect of shale development, because the growth will be “concentrated in a few important sectors” and “concentrated in a small share of the total economy” (p. 7-8).  But seen in the context of these other studies, it’s hard to imagine that tens if not hundreds of billions of value added to the economy (along with hundreds of thousands of jobs) won’t have a big impact, nor will it just impact the oil and gas sector.

Having their cake and eating it too

What this EMF study (and the reaction among shale critics) shows is that opponents want to have it both ways: they suggest shale will lead to a “climate disaster,” but they also suggest a study completely contradicting them actually validates them. And these are the people who constantly say “the science” is on their side!

The bottom line is that even a pessimistic outlook for shale development shows tens of billions of dollars added to the U.S. economy, and no material impact on total greenhouse gas emissions. That’s good news not only in terms of understanding shale development, but also for the entire U.S. economy and the environment we all cherish.

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