Schrag on shale gas and Exxon in favour of a CO2 tax

Daniel Schrag is a geology professor at Harvard, currently working on ways to mitigate future climate change on President Obama's Council of Advisors on Science and Technology. His latest paper, available here, on shale gas and climate change, is well worth reading. I'll begin by quoting the abstract:

Abstract: Shale gas is a new energy resource that has shifted the dominant paradigm on U.S. hydrocarbon resources. Some have argued that shale gas will play an important role in reducing greenhouse gas emissions by displacing coal used for electricity, serving as a moderate-carbon “bridge fuel.” Others have questioned whether methane emissions from shale gas extraction lead to higher greenhouse gas emissions overall. I argue that the main impact of shale gas on climate change is neither the reduced emissions from fuel substitution nor the greenhouse gas footprint of natural gas itself, but rather the competition between abundant, low-cost gas and low-carbon technologies, including renewables and carbon capture and storage. This might be remedied if the gas industry joins forces with environmental groups, providing a counterbalance to the coal lobby, and ultimately eliminating the conventional use of coal in the United States.

The only point I'd have any disagreement with here is whether shale gas is forcing out renewables. During the US shale gas boom, we've also seen record penetration of renewable energy. Renewable energy is mainly dependent on political willpower to maintain subsidy. Even with no gas, renewables can't directly compete with coal without some sort of subsidy, or a carbon tax on coal. Some more selective quotes:

Are greenhouse gas emissions from natural gas better than those from coal? The answer would seem obvious. Natural gas has roughly half the carbon content of the average coal per unit energy, thus producing half as much carbon dioxide when combusted for heat or electricity. Moreover, a combined-cycle natural gas plant that generates base-load electricity has a thermal efficiency of roughly 50 percent, which is higher than the newest ultra-super critical coal plants (40 to 45 percent) and much higher than the average coal plant (33 percent) in the United States. Thus, burning natural gas for electricity, when displacing an average U.S. coal plant, results in a reduction in carbon dioxide emissions of nearly a factor of three.

He goes on the shred the Howarth/Ingraffea paper, both on their leakage rate estimates, and on their choice of global warming potential factor. If the more appropriate Global Temperature Potential (GTP, which measures the actual temperature rise due to a greenhouse gas, rather than the radiative forcing, as per GWP) is used, methane emissions are only 7 times as bad as the equivalent amount of CO2 - this is because methane has a much lower residence time in the atmosphere. The GTP of 7 is 15 times lower than that used by Howarth/Ingraffea, meaning that they are out be more than a whole order of magnitude! 

The only problem that Schrag identifies is that the economic boom from shale gas extraction will be sufficient to encourage significant economic growth, creating more CO2 emissions. Of course, many that oppose shale gas want to have their cake and eat it, opposing shale gas on the grounds of CO2 emissions while claiming it won't make a significant economic difference anyway.

More interesting, however, is Schrag's solution to our current problems. Putting a price (or a tax) on carbon would benefit the renewables industry for obvious reasons, but would also benefit the natural gas industry as it would it coal harder than gas, allowing gas to take coal's share of the market. This would be good for the gas companies, and good for the climate. Such a coalition would not be easy to maintain:

Building a coalition between the natural gas industry and the environmental community to support a comprehensive climate policy will not be easy. The oil and gas industries have long had a combative and distrustful relationship with the environmental movement.

However, it seems pretty clear that the environmental lobby has failed to prevent big coal's stranglehold on US energy policy. Perhaps a clash of the titans: big gas vs big coal is what is needed to shift the balance:

By leveraging the finnancial self-interest of the natural gas industry to broaden political support for anti-coal policies, environmental groups can simultaneously use a grassroots campaign to pressure existing coal-fired power plants to shut down. The success of this strategy will determine whether shale gas is indeed good for climate change.

Funnily enough, it looks like Exxon must have been reading this, as they have just come out cautiously in favour of implementing a carbon tax in the US.