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Shale oil and gas booms: Consequences for agricultural and biofuel industries

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  • Taheripour, Farzad
  • Tyner, Wallace E.

Abstract

This paper examines and quantifies the consequences of increases in supplies of oil and gas from shale resources for the US economy and its agricultural and biofuel industries using a computable general equilibrium modeling framework under alternative economic conditions and emissions reduction policies. It shows that increases in supplies of oil and gas from shale resources generate enormous gains for the US economy. The question is do we use it all for higher economic growth or do we allocate part of it for reducing future global warming. This paper shows that we can sacrifice about 43% of the gains to reduce GHG emissions by 27%. Finally, the results of this paper indicate that in the presence of shale resources elimination of biofuel mandates negatively affect biofuels and crop industries. However, the impact is not huge because using shale resources increases national income and that generates a higher demand for food (including livestock product) which eventually prevents a big fall in demand for crops.

Suggested Citation

  • Taheripour, Farzad & Tyner, Wallace E., 2014. "Shale oil and gas booms: Consequences for agricultural and biofuel industries," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170238, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea14:170238
    DOI: 10.22004/ag.econ.170238
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    References listed on IDEAS

    as
    1. Sarica, Kemal & Tyner, Wallace E., 2013. "Alternative policy impacts on US GHG emissions and energy security: A hybrid modeling approach," Energy Economics, Elsevier, vol. 40(C), pages 40-50.
    2. 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.
    3. Taheripour, Farzad & Wally Tyner, 2011. "Introducing First and Second Generation Biofuels into GTAP Data Base version 7," GTAP Research Memoranda 3477, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    4. Brown, Stephen P.A. & Krupnick, Alan, 2010. "Abundant Shale Gas Resources: Long-Term Implications for U.S. Natural Gas Markets," RFF Working Paper Series dp-10-41, Resources for the Future.
    5. McDougall, Robert & Alla Golub, 2007. "GTAP-E: A Revised Energy-Environmental Version of the GTAP Model," GTAP Research Memoranda 2959, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    6. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    7. Burniaux, Jean-March & Truong, Truong P., 2002. "Gtap-E: An Energy-Environmental Version Of The Gtap Model," Technical Papers 28705, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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    Environmental Economics and Policy; Resource /Energy Economics and Policy;

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