John Locke Update / Research Brief

Energy production up and CO2 emissions down thanks to fracking

posted on in Economics & Environment, Energy & Environment
Featured Image

What can possibly unite these two items? Not only do they seem unrelated, but they also seem opposite.

The first is from the U.S. Energy Information Administration. It’s a graph showing how the United States has become the world’s top producer of petroleum and natural gas. We’re even beating Russia and Saudi Arabia. As you can see, that wasn’t the case just a decade ago.

The second item is from the International Energy Agency’s new report out this month on Global CO2 emissions in 2019. Here’s the entry for the U.S.:

The United States saw the largest decline in energy-related CO2 emissions in 2019 on a country basis – a fall of 140 Mt [million tons], or 2.9%, to 4.8 Gt [gigatons].

US emissions are now down almost 1 Gt from their peak in the year 2000, the largest absolute decline by any country over that period. A 15% reduction in the use of coal for power generation underpinned the decline in overall US emissions in 2019. Coal-fired power plants faced even stronger competition from natural gas-fired generation, with benchmark gas prices an average of 45% lower than 2018 levels. As a result, gas increased its share in electricity generation to a record high of 37%.

How is it that these are both true?

  • The U.S. leads the world in producing oil and natural gas
  • The U.S. leads the world in reducing energy-based CO2 emission

Hasn’t everything we’ve been told over the past two decades said that those were impossible? Weren’t we under the impression that those things worked in opposition — that we’d have to choose between one or the other?

Stumped yet?

The answer? Thank fracking.

America’s always had untold amounts of oil and natural gas trapped in shale rock. Getting to them was an age-old question. Cheap, plentiful, domestic oil and natural gas were made possible by the marriage of two old technologies, horizontal drilling, and hydraulic fracturing.

Now, thanks to fracking, plentiful oil has freed the U.S. from massive gasoline price spikes whenever there are troubles in the Middle East. Did you notice what happened at the pumps last month while all the media talking heads were fretting about “World War III” and “war with Iran”? They actually went down.

Now, thanks to fracking, cheap natural gas has become price-competitive to coal for producing electricity. Politicians and policymakers have been trying to make renewable energy sources replace coal, but they can’t. They’re not reliable or dispatchable. Natural gas is.

That’s why research finds that nuclear and natural gas are the most inexpensive, efficient ways to reduce emissions, while solar and wind are the most expensive and least efficient. The IEA report acknowledged price-competitive natural gas gaining more share of electricity generation in the U.S. as coal declined.

We see it at work in North Carolina, too. Look how electricity generation has changed and CO2 emissions have fallen all century in North Carolina.

Now, technological change, consumer preferences, and an expanding service sector are also contributing to lower emissions. But the lion’s share of the credit goes to the change to natural gas in electricity generation.

For all these reasons and more, when you hear the likes of Sen. Elizabeth Warren, Sen. Bernie Sanders, and Rep. Alexandria Ocasio-Cortez speak of banning fracking, you know it’s a very, very bad idea.

 

For more information, see:

Jon Sanders is an economist studying state regulations, that spreading kudzu of invasive government and unintended consequences. Serving as Senior Fellow of Regulatory Studies and also Research Editor at the John Locke Foundation, Jon gets in the weeds of all… ...

Donate Today

About John Locke Foundation

We are North Carolina’s Most Trusted and Influential Source of Common Sense. The John Locke Foundation was created in 1990 as an independent, nonprofit think tank that would work “for truth, for freedom, and for the future of North Carolina.” The Foundation is named for John Locke (1632-1704), an English philosopher whose writings inspired Thomas Jefferson and the other Founders.

The John Locke Foundation is a 501(c)(3) research institute and is funded solely from voluntary contributions from individuals, corporations, and charitable foundations.