February 1, 2011 | Energy Policy, Sustainability + Energy

In an online debate run by The Economist, Robert Bryce of the Manhattan Institute and Steve Sawyer of the Global Wind Energy Council have been debating the effectiveness of natural gas vs. renewables in limiting the world’s carbon emissions. The conversation, which spans costs and subsidies, community impacts, environmental impacts and more, has got me thinking…

Natural gas appears to be a rising star. Thanks to new “unconventional” discoveries from shale and coal, the International Energy Administration (IEA) recently upped the world’s supply of natural gas to 250 years based on current use. As a result of rising supplies and decreased demand for electricity, prices are falling, and natural gas is now the darling of U.S. energy buyers. Add to this, the low carbon emissions of gas – about half that of coal – and natural gas looks pretty good, right? Even President Obama includes natural gas in his proposal to achieve 80% of our electricity from “clean” energy sources by 2035.

With renewed support for natural gas, let’s make sure people are asking the right questions.

For example, when it comes to subsidies, what are we measuring? Just direct tax incentives and grants? The hidden costs of favorable regulatory policies (or lack thereof)? Or perhaps the external costs to society that manifest in higher health care costs or mitigation efforts?

As Steve Sawyer points out in the debate: “Much is made of the $50 billion spent every year by governments in support of renewables. Much less is made of the $500-700 billion in annual subsidies to the conventional energy sector (about $150 billion to natural gas).”

And I’ll add to that – even less has been made about the lack of environmental regulation in the natural gas industry. The EPA is now considering amending the rules that govern hydraulic fracturing, a natural gas drilling process that pumps high volumes of water, sand and chemicals into the bedrock – a process recently banned by the New York State Legislature for its potential harmful impacts on drinking water.

Add to this, the potential health risks, some of which have been catalogued by the NRDC, and the societal costs begin to rise.

In a study prepared for the U.S. Department of Energy Office of Fossil Energy (pdf), researchers found that the natural gas industry would pay close to $10 billion per year if forced to comply with “stringent” federal regulations including use of hydraulic fracturing, disposal of hazardous waste, and storage, just to name a few.


If we want to know the environmental costs of using more natural gas, the impact of hydraulic fracturing is one hidden cost we can’t ignore.

Note that if you have an opinion, The Economist’s online debate is open for voting and comments only until Wednesday, February 2, 2011.