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Abundant Shale Gas Resources: Long-Term Implications for U.S. Natural Gas Markets

Author

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  • Brown, Stephen P.A.

    (Resources for the Future)

  • Krupnick, Alan

    (Resources for the Future)

Abstract

According to recent assessments, the United States has considerably more recoverable natural gas in shale formations than was previously thought. Such a development raises expectations that U.S. energy consumption will shift toward natural gas. To examine how the apparent abundance of natural gas and projected growth of its use might affect natural gas prices, production, and consumption, we use NEMS-RFF to model a number of scenarios—reflecting different perspectives on natural gas availability, the availability of competing resources, demand for natural gas, and climate policy—through 2030. We find that more abundant shale gas resources create an environment in which natural gas prices are likely to remain attractive to consumers—even as policy advances additional uses of natural gas to reduce carbon dioxide emissions and bolster energy security.

Suggested Citation

  • 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.
    • Handle: RePEc:rff:dpaper:dp-10-41
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-10-41.pdf
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    References listed on IDEAS

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    1. Geoffrey Rothwell, 2010. "New U.S. Nuclear Generation: 2010-2030," Discussion Papers 09-025, Stanford Institute for Economic Policy Research.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Charles F. Mason & Lucija A. Muehlenbachs & Sheila M. Olmstead, 2015. "The Economics of Shale Gas Development," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 269-289, October.
    2. Tiwari, Aviral Kumar & Mukherjee, Zinnia & Gupta, Rangan & Balcilar, Mehmet, 2019. "A wavelet analysis of the relationship between oil and natural gas prices," Resources Policy, Elsevier, vol. 60(C), pages 118-124.
    3. Julien Xavier Daubanes & Fanny Henriet & Katheline Schubert, 2017. "More Gas, Less Coal, and Less CO2? Unilateral CO2 Reduction Policy with More than One Carbon Energy Source," CESifo Working Paper Series 6697, CESifo.
    4. Feng, Gen-Fu & Wang, Quan-Jing & Chu, Yin & Wen, Jun & Chang, Chun-Ping, 2021. "Does the shale gas boom change the natural gas price-production relationship? Evidence from the U.S. market," Energy Economics, Elsevier, vol. 93(C).
    5. Julien Xavier Daubanes & Fanny Henriet & Katheline Schubert, 2021. "Unilateral CO2 Reduction Policy with More Than One Carbon Energy Source," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 8(3), pages 543-575.
    6. Li, Boying & Zheng, Mingbo & Zhao, Xinxin & Chang, Chun-Ping, 2021. "An assessment of the effect of partisan ideology on shale gas production and the implications for environmental regulations," Economic Systems, Elsevier, vol. 45(3).
    7. Catherine Hausman & Ryan Kellogg, 2015. "Welfare and Distributional Implications of Shale Gas," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 71-139.
    8. Kenneth Gillingham & Marten Ovaere & Stephanie Weber, 2021. "Carbon Policy and the Emissions Implications of Electric Vehicles," CESifo Working Paper Series 8974, CESifo.
    9. Alexopoulos, Thomas A., 2017. "The growing importance of natural gas as a predictor for retail electricity prices in US," Energy, Elsevier, vol. 137(C), pages 219-233.
    10. Geng, Jiang-Bo & Ji, Qiang & Fan, Ying, 2016. "The impact of the North American shale gas revolution on regional natural gas markets: Evidence from the regime-switching model," Energy Policy, Elsevier, vol. 96(C), pages 167-178.
    11. Gatfaoui, Hayette, 2015. "Pricing the (European) option to switch between two energy sources: An application to crude oil and natural gas," Energy Policy, Elsevier, vol. 87(C), pages 270-283.
    12. Kuwayama, Yusuke & Olmstead, Sheila & Krupnick, Alan, 2013. "Water Resoures and Unconventional Fossil Fuel Development: Linking Physical Impacts to Social Costs," RFF Working Paper Series dp-13-34, Resources for the Future.
    13. Wang, Qiang & Chen, Xi & Jha, Awadhesh N. & Rogers, Howard, 2014. "Natural gas from shale formation – The evolution, evidences and challenges of shale gas revolution in United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 30(C), pages 1-28.
    14. Sexton, Steven & Eyer, Jonathan, 2016. "Leveling the playing field of transportation fuels: Accounting for indirect emissions of natural gas," Energy Policy, Elsevier, vol. 95(C), pages 21-31.
    15. Linn, Joshua & Muehlenbachs, Lucija, 2018. "The heterogeneous impacts of low natural gas prices on consumers and the environment," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 1-28.
    16. 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.
    17. Brown, Stephen P.A., 2017. "Natural gas vs. oil in U.S. transportation: Will prices confer an advantage to natural gas?," Energy Policy, Elsevier, vol. 110(C), pages 210-221.
    18. Jakub Boratyński, 2015. "Ekonomiczne skutki eksploatacji gazu łupkowego," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 55-82.
    19. Linn, Joshua & Anna Muehlenbachs, Lucija & Wang, Yshuang, 2014. "How Do Natural Gas Prices Affect Electricity Consumers and the Environment?," RFF Working Paper Series dp-14-19, Resources for the Future.
    20. Wu, Linfei & Sun, Liwen & Qi, Peixiao & Ren, Xiangwei & Sun, Xiaoting, 2021. "Energy endowment, industrial structure upgrading, and CO2 emissions in China: Revisiting resource curse in the context of carbon emissions," Resources Policy, Elsevier, vol. 74(C).

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    More about this item

    Keywords

    natural gas; shale; gas prices; climate policy; carbon dioxide emissions; energy security;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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