ENERGY PRICE CARTELS

Energy Price Cartels

Energy Price Cartels

Outline

Natural gas is the cleanest fossil fuel-it produces less than half as much carbon pollution as coal. Recent technology advancements make affordable the development of unconventional natural gas resources. This creates an unprecedented opportunity to use gas as a bridge fuel to a 21st-century energy economy that relies on efficiency; renewable sources, and low-carbon fossil fuels such as natural gas.

Despite the potential energy; economic, and security benefits of natural gas, the recently House-passed American Clean Energy and Security Act, H.R. 2454, does not include enough opportunities to expand its use. The Center for American Progress and the Energy Future Coalition therefore propose a number of policies that would increase the use of natural gas and low-carbon energy sources while providing additional protection for our climate and communities.

Capturing the new natural gas opportunity

The recent development of technology that enables the affordable development of significant shale gas reserves in the lower 48 states could fundamentally alter the U.S. energy system and playa larger role in helping to more rapidly and cost-effectively speed the transition to a low-carbon economy and reduce global warming pollution. The Energy Information Administration estimates that the United States has approximately 1,770 trillion cubic feet (tcf ) of technically recoverable gas, including 238 tcf of proven reserves. The Potential Gas Committee estimates total US. gas resources at 2,074 tcf. It is estimated that "technically recoverable unconventional gas" including shale gas accounts for nearly two-thirds of American onshore gas resources. At the current production rates, "the current recoverable resource estimate provides enough natural gas to supply the US. for the next 90 years:'

These gas findings in Arkansas, Louisiana, Michigan, New York, North Dakota, Ohio, Pennsylvania, Texas, and elsewhere have increased proven reserves of US. natural gas by 13 percent, and driven potential reserves even higher.

Natural gas is "by the far the cleanest burning" fossil fuel, and produces slightly more than one-fifth of all US. energy. Oil and coal combined comprise about two thirds of all energy consumption. Their combustion produces substantially more global warming and other conventional pollution than natural gas. Combusting natural gas to make electricity produces about half of the global warming pollution of coal, and one-third of petroleum burned in cars. Given its domestic abundance and its lower pollutant levels, natural gas should playa larger role in our energy mix.

Enhancing the role of natural gas is valuable for many reasons. Tens of gigawatts of highly efficient natural gas generation capacity were installed over the past two decades but only about two-fifths of this capacity is used at any given time. At little to no additional cost for infrastructure, natural gas generation can be easily substituted for existing coal-fired capacity without any new plant or transmission construction. In some parts of the country; a C02 price of as little as $7 to $14 per ton would provide sufficient incentive to give priority to dispatch of gas-fired electricity into the grid over that of ...