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The future of U.S. natural gas production, use, and trade


Author Info

  • Paltsev, Sergey
  • Jacoby, Henry D.
  • Reilly, John M.
  • Ejaz, Qudsia J.
  • Morris, Jennifer
  • O'Sullivan, Francis
  • Rausch, Sebastian
  • Winchester, Niven
  • Kragha, Oghenerume


Two computable general equilibrium models, one global and the other providing U.S. regional detail, are applied to analysis of the future of U.S. natural gas. The focus is on uncertainties including the scale and cost of gas resources, the costs of competing technologies, the pattern of greenhouse gas mitigation, and the evolution of global natural gas markets. Results show that the outlook for gas over the next several decades is very favorable. In electric generation, given the unproven and relatively high cost of other low-carbon generation alternatives, gas is likely the preferred alternative to coal. A broad GHG pricing policy would increase gas use in generation but reduce use in other sectors, on balance increasing its role from present levels. The shale gas resource is a major contributor to this optimistic view of the future of gas. Gas can be an effective bridge to a lower emissions future, but investment in the development of still lower CO2 technologies remains an important priority. International gas resources may well prove to be less costly than those in the U.S., except for the lowest-cost domestic shale resources, and the emergence of an integrated global gas market could result in significant U.S. gas imports.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 39 (2011)
Issue (Month): 9 (September)
Pages: 5309-5321

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Handle: RePEc:eee:enepol:v:39:y:2011:i:9:p:5309-5321

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Keywords: Natural gas Climate Policy International gas trade;


References listed on IDEAS
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  1. Ruud Egging, Franziska Holz, Christian von Hirschhausen and Steven A. Gabriel, 2009. "Representing GASPEC with the World Gas Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 97-118.
  2. Finn Roar Aune, Knut Einar Rosendahl and Eirik Lund Sagen, 2009. "Globalisation of Natural Gas Markets - Effects on Prices and Trade Patterns," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 39-54.
  3. Stephen P. A. Brown and Mine K. Yucel, 2009. "Market Arbitrage: European and North American Natural Gas Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 167-186.
  4. McFarland, James R. & Paltsev, Sergey & Jacoby, Henry D., 2009. "Analysis of the Coal Sector under Carbon Constraints," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 404-424, May.
  5. Peter R. Hartley and Kenneth B. Medlock III, 2009. "Potential Futures for Russian Natural Gas Exports," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 73-96.
  6. Roberto F. Aguilera & Roderick G. Eggert & Gustavo Lagos C.C. & John E. Tilton, 2009. "Depletion and the Future Availability of Petroleum Resources," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 141-174.
  7. Justine Barden, William Pepper, Vineet Aggarwal, 2009. "The Impact of High Oil Prices on Global and Regional Natural Gas and LNG Markets," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 55-72.
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Cited by:
  1. Brigitte Knopf & Yen-Heng Henry Chen & Enrica De Cian & Hannah Förster & Amit Kanudia & Ioanna Karkatsouli & Ilkka Keppo & Tiina Koljonen & Katja Schumacher & Detlef van Vuuren, 2014. "Beyond 2020 - Strategies and Costs for Transforming the European Energy System," Working Papers 2014.15, Fondazione Eni Enrico Mattei.
  2. Hannah Förster & Katja Schumacher & Enrica De Cian & Michael Hübler & Ilkka Keppo & Silvana Mima & Ronald D. Sands, 2013. "European energy efficiency and decarbonization strategies beyond 2030 : A sectoral multi-model decomposition," Post-Print halshs-00939253, HAL.
  3. Resul Cesur & Erdal Tekin & Aydogan Ulker, 2013. "Air Pollution and Infant Mortality: Evidence from the Expansion of Natural Gas Infrastructure," NBER Working Papers 18736, National Bureau of Economic Research, Inc.
  4. Philipp M. Richter, 2013. "From Boom to Bust?: A Critical Look at US Shale Gas Projections," Discussion Papers of DIW Berlin 1338, DIW Berlin, German Institute for Economic Research.
  5. Enrica De Cian & Ilkka Keppo & Johannes Bollen & Samuel Carrara & Hannah Förster & Michael Hübler & Amit Kanudia & Sergey Paltsev & Ronald D. Sands & Katja Schumacher, 2013. "European-Led Climate Policy Versus Global Mitigation Action: Implications On Trade, Technology, And Energy," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 4(su), pages 1340002-1-1.
  6. Uliasz-Misiak, Barbara & Przybycin, Andrzej & Winid, Bogumila, 2014. "Shale and tight gas in Poland—legal and environmental issues," Energy Policy, Elsevier, vol. 65(C), pages 68-77.
  7. Henry D. Jacoby & Francis M. O'Sullivan & Sergey Paltsev, 2011. "The Influence of Shale Gas on U.S. Energy and Environmental Policy," RSCAS Working Papers 2011/52, European University Institute.


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