NCPA - National Center for Policy Analysis

Fracking Cuts Greenhouse Gases

March 21, 2012

While the Environmental Protection Agency continues its crusade against emissions by championing renewable energy and regulating automobile manufacturers, the benefits of hydraulic fracturing (fracking) have gone relatively unreported.  The fracking revolution in the United States that will produce enormous amounts of natural gas will also have the net impact of cutting emissions, says Adam Peshek, a research associate at the Reason Foundation.

This reduction, which is yielded indirectly by the implementation of fracking, is achieved by the process' contributions to the efficiency of natural gas production.  Fracking enables miners to produce roughly eight times as much natural gas per well, lowering costs and producing gas at a lower rate.

  • Because fracking has allowed greater access to natural gas trapped in shale rock formations, production has skyrocketed and prices have plummeted.
  • Gas prices dropped from $12 per million British thermal units (MMBtu) in June 2008 to less than $4 per MMbtu in September 2009.
  • During that time, the cost of generating electricity from natural gas plants fell an average of about 4 cents per kilowatt.
  • Gas prices have continued to plummet since then, falling to a historic low of $2.30 MMBtu today.

These lower prices have incentivized electric utilities to switch from dirtier coal to cleaner-burning gas.  This has the aggregate effect of producing more electricity for American consumers while reducing emissions from the sector.

  • Natural gas plants emit roughly half the greenhouse gases that coal-fired plants emit.
  • According to a recent study, the United States emitted nearly 9 percent less carbon dioxide in 2009 than it did in 2008, mostly due to the wider employment of natural gas.
  • Because prices of natural gas have continued to plummet since then as more firms move into the sector, further gains are likely to be realized.

These advances have also resulted in American exports of liquefied natural gas, which means that these reductions in emissions will be realized by America's trade partners as well, while simultaneously helping to correct America's trade balance.

Source: Adam Peshek, "Fracking Cuts Greenhouse Gases," Reason Foundation, March 19, 2012.

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