Current CO2 concentration in the atmosphere

The challenge of natural gas

The Economist has a decent piece up about natural gas fracking, Shale gas: Fracking great.

I say only “decent” because it underplays the side effects of fracking, like ground water contamination, the spread of who-knows-what chemicals, etc., but it does end with this graf:

By itself, switching to gas will not reduce emissions to anything like the levels required to avoid a high risk of serious climate change. This will take much crunchier policies to boost renewable-energy sources and other clean technologies—starting with a strong price on carbon emissions, through a market-based mechanism or, preferably, a carbon tax. Governments are understandably unwilling to take these steps in straitened times. Yet they should plan to do so; and in the coming years cheap gas could help free cash for more investment in low-carbon technologies. Otherwise the bonanza would be squandered.

Which leads me to a point I’ve been trying to hammer home for some time: Natural gas is the biggest single climate challenge facing the developed countries, just as coal is the biggest single challenge in the developing countries. (Oil is a big deal in both places, because of existing infrastructure in one camp and quickly developing and growing infrastructure in the other.)

In both developed and developing countries we’re seeing the same basic dynamic play out: We have access to a cheap fuel that we shouldn’t be extracting and burning, but we can’t (yet) find the maturity and self-restraint to stop ourselves. We can’t even take the obvious steps needed — like imposing a price on carbon emissions or ending subsidies for fossil fuel use — that would force economic actors to value appropriately the future impacts of burning fossil fuels now. So we continue to accelerate towards the cliff edge in our fossil fueled vehicles, ignoring the pleas of scientists and environmentalists in the back seat telling us that this drunken joy ride will most certainly not have a happy ending unless we take some pretty drastic action.

This is economics in its most bare knuckle and brutal form, a classic conflict between the hemispheres of our collective brain, with the left side saying we should plan for the future and not sabotage it, and the right falling in love with the endless parade of shiny objects available now for a low, low price (negative externalities and batteries not included).

Which, in turn, brings me back to an example of terminology, in this case from economics, causing more harm than good when it’s used in discussions with lay people. I’m talking about the habit of referring to the lack of a market price on carbon emissions as a “market failure”. The strict definition of the term — a market not delivering the optimal well being of all participants for any given set of available goods and services — is so detached from reality as to be useless. We are surrounded by examples of market failures in the form of people not getting enough to eat or needed medical care while others are buying McMansions and room-size SUVs, to cite perhaps the most obvious example. The problem is not that the market’s lack of producing a spontaneous price on carbon emissions is or isn’t an example of “market failure”; by the accepted definition, it clearly is. The difficulty arises when people who are not steeped in the terminology hear “market failure” and leap to conclusions about how one should fix it. Some will no doubt see this as yet another chance to complain about “government interfering in the free market” and try to campaign for even less regulation in a country, like the US, that should have learned its lessons long ago about giving the invisible hand too much room to make a fist and take a swing at people. (Savings and Loan mess, ENRON, or mortgage implosion, anyone?) And others will simply assume that all we need is some minor tweaking around the edges to “fine tune” the market. This is nonsense. We desperately need a price on carbon emissions, as it’s the surest way to tilt the marketplace away from emitting carbon and toward cleaner technologies.

Of course, in a country like the US, where we’re bombarded by media ad campaigns for “clean coal” and “clean natural gas”, and proposing anything as simple and (dare I say it) fair as James Hansen’s flat carbon tax with 100% per capita refund, would be political suicide, this is all, in effect moot. We seem determined to hang on to our business as usual practices right up to the moment when reality rips them from our sweaty hands in the form of an EF5 hurricane devastating Miami or Houston (or Washington DC or New York City or …) or a piece of ice the size of Spain breaking off of Antarctica. Still, we have to start somewhere, and turning away from a further embrace of cheap fossil fuels would be an excellent and necessary first step.

10 comments to The challenge of natural gas

  • disdaniel

    “gas is…green”

    and my farts don’t stink

    sorry Ed D. I know the quote is not what you are saying

  • Joan Savage

    I agree natural gas is a huge issue to overcome.

    Although you say “we can’t (yet) find the maturity and self-restraint to stop ourselves” it’s not quite that simple. People on limited income aren’t able to come up with double or triple their usual utility bill to convert from cheap gas to all-electricity.
    The 1%/99% demographics that have led to activism has an implication for who can – and can’t – afford to do the right thing on their own. Locally, one can buy 3.5 joules (gas) for the cost of one joule (sustainable electricity).
    Consequently, the cost of a flat carbon tax might be passed along to those who can least-afford it.
    Maybe we need something like rationing coupons that allows each individual to expend 4 metric tonnes of carbon dioxide a year (a little lower than the global average) and after that, pay a tax on the overage. Hard to implement but slightly fairer on the poor. Rather Jonathan Swift-ian. Just a concept.

  • Lou

    Joan,

    Yes, I would contend it is that simple. The poor can’t pay to do what’s in their and everyone else’s best interest? Then it’s up to those of us who aren’t poor to help them pay for it. I consider that part of the maturity aspect of the mental sea change we need to make.

    I would love to see numbers showing that a typical US household, which relies on a mix of fuels plus electricity would see their yearly utility bills double or triple by going all electric. By enforcing strict regs on the efficiency of new appliances plus subsidizing upgrades (and house insulation and …), we can trim those costs back anywhere from a little to a lot, depending on one’s assumptions. But again, we need the maturity to look at the situation and not see it as “us vs. them”, as the people who fight against doing anything for groups with lower incomes inevitably do, but “us vs. a really big, shared problem”. We’re so close to the ragged edge of disaster that we have no choice but to employ every reasonable tool we have, including conservation, fuel switching, etc.

    I would have no trouble giving lower income groups a higher share of the carbon tax rebates; the idea of them buying food and clothing with carbon taxes collected from people driving Cadillac Escalades would make me smile all day long. The problem is cash flow, a.k.a. timing. If you push up the cost of gasoline and natural gas and electricity with a carbon tax, then how often will the lower economic groups get their rebate? Yearly isn’t good enough, nor is quarterly, and I doubt monthly would be often enough for many. This is the basic problem: We need a high enough carbon tax to force the economy as a whole to get much greener, and quickly, but without crushing lower income groups. Trying to solve that one without creating a nightmarish system that’s easily cheated won’t be easy.

    • Joan Savage

      Natural gas for heating can have its own carbon tax structure, one that could differ from a carbon tax on coal or petrol.

      I’d like to see a tax exemption that rewards limited natural gas consumption. Let’s resist dependence on Escalades, even on taxing them, it’s too much like counting on continuing cigarette taxes.

      Suppose initially the first 400 or 500 therms of household gas use per year were tax exempt, and anything over that got a stiff carbon tax. It could work rather like a household tax exemption on income tax.

      • Ed Reid

        That would provide domestic water heating, throughout the country. It might, however, be pretty rough on the poor in Maine and Minnesota, who have to deal with significant space heating load as well.

        • Joan Savage

          I’m surprised to read your estimate that it would only cover water heating.

          In upstate New York from 2008-2011, our annual household gas use was in the range of 463 to 496 therms per year, and that included all water and space heating combined. The house is insulated, compact, and smaller than the 2,200 square feet of an average US house. We conserve water, which in turn conserves heating it. This experience could translate to the significant percentage of the US population who live in apartments or small rental property.

          It is interesting to get more information from here and there about gas use.

          • Ed Reid

            Typical gas storage water heater NG consumption for a family of four is ~25-30 therms per month. Obviously, family size, hot water use habits, water heater location, etc. can have a significant impact on that number.

  • Ed Reid

    “I say only “decent” because it underplays the side effects of fracking, like ground water contamination, the spread of who-knows-what chemicals, etc.,…”

    It would seem to me that, if there has been documented groundwater contamination, the chemical contaminants would be known from the analyses which documented the contamination.