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The Impact of Shale Gas on the Cost and Feasibility of Meeting Climate Targets—A Global Energy System Model Analysis and an Exploration of Uncertainties

Author

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  • Sheridan Few

    () (Grantham Institute, Imperial College London, Prince Consort Road, London SW7 2AZ, UK)

  • Ajay Gambhir

    () (Grantham Institute, Imperial College London, Prince Consort Road, London SW7 2AZ, UK)

  • Tamaryn Napp

    () (Grantham Institute, Imperial College London, Prince Consort Road, London SW7 2AZ, UK)

  • Adam Hawkes

    () (Grantham Institute, Imperial College London, Prince Consort Road, London SW7 2AZ, UK)

  • Stephane Mangeon

    () (Grantham Institute, Imperial College London, Prince Consort Road, London SW7 2AZ, UK)

  • Dan Bernie

    () (Met Office Hadley Centre, FitzRoy Road, Exeter, Devon EX1 3PB, UK)

  • Jason Lowe

    () (Met Office Hadley Centre, FitzRoy Road, Exeter, Devon EX1 3PB, UK)

Abstract

There exists considerable uncertainty over both shale and conventional gas resource availability and extraction costs, as well as the fugitive methane emissions associated with shale gas extraction and its possible role in mitigating climate change. This study uses a multi-region energy system model, TIAM (TIMES integrated assessment model), to consider the impact of a range of conventional and shale gas cost and availability assessments on mitigation scenarios aimed at achieving a limit to global warming of below 2 °C in 2100, with a 50% likelihood. When adding shale gas to the global energy mix, the reduction to the global energy system cost is relatively small (up to 0.4%), and the mitigation cost increases by 1%–3% under all cost assumptions. The impact of a “dash for shale gas”, of unavailability of carbon capture and storage, of increased barriers to investment in low carbon technologies, and of higher than expected leakage rates, are also considered; and are each found to have the potential to increase the cost and reduce feasibility of meeting global temperature goals. We conclude that the extraction of shale gas is not likely to significantly reduce the effort required to mitigate climate change under globally coordinated action, but could increase required mitigation effort if not handled sufficiently carefully.

Suggested Citation

  • Sheridan Few & Ajay Gambhir & Tamaryn Napp & Adam Hawkes & Stephane Mangeon & Dan Bernie & Jason Lowe, 2017. "The Impact of Shale Gas on the Cost and Feasibility of Meeting Climate Targets—A Global Energy System Model Analysis and an Exploration of Uncertainties," Energies, MDPI, Open Access Journal, vol. 10(2), pages 1-22, January.
  • Handle: RePEc:gam:jeners:v:10:y:2017:i:2:p:158-:d:88934
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    References listed on IDEAS

    as
    1. McGlade, Christophe & Speirs, Jamie & Sorrell, Steve, 2013. "Unconventional gas – A review of regional and global resource estimates," Energy, Elsevier, vol. 55(C), pages 571-584.
    2. Gülen, Gürcan & Browning, John & Ikonnikova, Svetlana & Tinker, Scott W., 2013. "Well economics across ten tiers in low and high Btu (British thermal unit) areas, Barnett Shale, Texas," Energy, Elsevier, vol. 60(C), pages 302-315.
    3. Ajay Gambhir & Laurent Drouet & David McCollum & Tamaryn Napp & Dan Bernie & Adam Hawkes & Oliver Fricko & Petr Havlik & Keywan Riahi & Valentina Bosetti & Jason Lowe, 2017. "Assessing the Feasibility of Global Long-Term Mitigation Scenarios," Energies, MDPI, Open Access Journal, vol. 10(1), pages 1-31, January.
    4. McGlade, Christophe & Speirs, Jamie & Sorrell, Steve, 2013. "Methods of estimating shale gas resources – Comparison, evaluation and implications," Energy, Elsevier, vol. 59(C), pages 116-125.
    5. Gracceva, Francesco & Zeniewski, Peter, 2013. "Exploring the uncertainty around potential shale gas development – A global energy system analysis based on TIAM (TIMES Integrated Assessment Model)," Energy, Elsevier, vol. 57(C), pages 443-457.
    6. Philipp M. Richter, 2015. "From Boom to Bust? A Critical Look at US Shale Gas Projections," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
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    Cited by:

    1. Torgrim Log & Wegar Bjerkeli Pedersen, 2019. "A Common Risk Classification Concept for Safety Related Gas Leaks and Fugitive Emissions?," Energies, MDPI, Open Access Journal, vol. 12(21), pages 1-17, October.

    More about this item

    Keywords

    shale gas; natural gas; supply curves; climate change mitigation; energy system analysis; energy scenarios; TIMES Integrated Assessment Model (TIAM); fugitive methane emissions; energy economics;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

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