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The Influence of Shale Gas on U.S. Energy and Environmental Policy
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1028-3625
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EUI RSCAS; 2011/52; Loyola de Palacio Programme on Energy Policy
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JACOBY, Henry D., O’SULLIVAN, Francis M., PALTSEV, Sergey, The Influence of Shale Gas on U.S. Energy and Environmental Policy, EUI RSCAS, 2011/52, Loyola de Palacio Programme on Energy Policy - https://hdl.handle.net/1814/18775
Abstract
The emergence of U.S. shale gas resources to economic viability affects the nation’s energy outlook
and the expected role of natural gas in climate policy. Even in the face of the current shale gas boom,
however, questions are raised about both the economics of this industry and the wisdom of basing
future environmental policy on projections of large shale gas supplies. Analysis of the business model
appropriate to the gas shales suggests that, though the shale future is uncertain, these concerns are
overstated. The policy impact of the shale gas is analyzed using two scenarios of greenhouse gas
control—one mandating renewable generation and coal retirement, the other using price to achieve a
50% emissions reduction. The shale gas is shown both to benefit the national economy and to ease the
task of emissions control. However, in treating the shale as a “bridge” to a low carbon future there are
risks to the development of technologies, like capture and storage, needed to complete the task.