The Role of Natural Gas in the Energy/Environment Debate
The Role of Natural Gas in the Energy/Environment Debate Nick Loris Herbert & Joyce Morgan Fellow The Heritage Foundation
“Use renewables as much as we can. Natural gas is the nextcleanest fuel, then we have oil and then we have coal… We’re trying to make sure that we innovatively and creatively use whatever fuel we burn (and) that we rely primarily on the fuels that are the cleanest… And, among the fossil fuels, natural gas is at the top.” - Carl Pope, Sierra Club, 2008
“The Club continues to view natural gas as a flawed but necessary transition fuel to a clean energy future powered by wind, solar and other truly clean energy sources.” Sierra Club Board Chairman Robert Mann, 2010
The State of the environment Since 1990 – 77 percent decrease in
carbon monoxide (CO) 8-hour;
– 99 percent decrease in lead (Pb) 3-month average; – 54 percent decrease in nitrogen dioxide (NO2) annual; – 47 percent decrease in nitrogen dioxide (NO2) 1-hour; – 22 percent decrease in ozone (O3) 8-hour; – 39 percent decrease in particulate matter 10 microns (PM10) 24-hour; – 37 percent decrease in particulate matter 2.5 microns (PM2.5) annual; – 37 percent decrease in particulate matter 2.5 microns (PM2.5) 24-hour; and – 81 percent decrease in sulfur dioxide (SO2) 1-hour.
For the Market to Determine
•
Open Access
•
Eliminate preferential treatment
•
Reduce regulatory burden
Themes of Regulatory Assault • • • • •
High compliance costs that ripple through the economy Diminishing marginal environmental benefits Threats to private property rights, rule of law. Duplicative of state regs/erosion of cooperative federalism. Need for Congress to step up.
Structural Problems with Regulatory Process •
Focus on activities and outputs, not results
•
Deficiencies in underlying analysis informing regulatory decisions
•
Ready-fire-aim approach
The Costs of Clean Power Plan, a Carbon Tax, Paris and other Climate Regs • By 2035: – An average employment shortfall of nearly 400,000 jobs; – Average employment shortfall in manufacturing of 200,000 jobs; – An aggregate gross domestic product (GDP) loss of more than $2.5 trillion (inflation-adjusted); and – A total income loss of more than $20,000 per family of four (inflationadjusted).
The Benefits • By 2100: – Clean Power Plan executed to perfection moderates .02 degrees Celsius of warming. – Totally eliminating all CO2 emissions from the U.S. would moderate any warming by only 0.137 degree Celsius; – If the entire industrialized world totally eliminated all CO2 emissions, only 0.278 degree Celsius of warming would be averted. – Even with cuts from the developing world (20 percent from China, 30 percent from the rest of the developing world) only .5 degree C averted.
The Social Cost of Carbon/Methane •
Discount rates
•
Climate Sensitivity
•
Time Horizon
Statistical models used to calculate SCC produce highly disparate results with changes in discount rates. Results from FUND Model.
Problems with Equilibrium Climate Sensitivity • Most recent IPCC assessment finds that the ECS is likely (2/3 chance) between 1.5 and 4.5℃. • Climate models show an average sensitivity of 3.2℃. • 20 studies since 2011 show the average is closer to 2℃.
Vehicles for Change •
Agencies withdrawing and re-writing regulations
•
Executive Orders/Memorandums
•
Legislation
•
•
Infrastructure
•
REINS Act, Regulatory Integrity, OIRA reform
Congressional Review Act
Questions?
Nick Loris Herbert & Joyce Morgan Fellow The Heritage Foundation [email protected]
“Use renewables as much as we can. Natural gas is the nextcleanest fuel, then we have oil and then we have coal… We’re trying to make sure that we innovatively and creatively use whatever fuel we burn (and) that we rely primarily on the fuels that are the cleanest… And, among the fossil fuels, natural gas is at the top.” - Carl Pope, Sierra Club, 2008
“The Club continues to view natural gas as a flawed but necessary transition fuel to a clean energy future powered by wind, solar and other truly clean energy sources.” Sierra Club Board Chairman Robert Mann, 2010
The State of the environment Since 1990 – 77 percent decrease in
carbon monoxide (CO) 8-hour;
– 99 percent decrease in lead (Pb) 3-month average; – 54 percent decrease in nitrogen dioxide (NO2) annual; – 47 percent decrease in nitrogen dioxide (NO2) 1-hour; – 22 percent decrease in ozone (O3) 8-hour; – 39 percent decrease in particulate matter 10 microns (PM10) 24-hour; – 37 percent decrease in particulate matter 2.5 microns (PM2.5) annual; – 37 percent decrease in particulate matter 2.5 microns (PM2.5) 24-hour; and – 81 percent decrease in sulfur dioxide (SO2) 1-hour.
For the Market to Determine
•
Open Access
•
Eliminate preferential treatment
•
Reduce regulatory burden
Themes of Regulatory Assault • • • • •
High compliance costs that ripple through the economy Diminishing marginal environmental benefits Threats to private property rights, rule of law. Duplicative of state regs/erosion of cooperative federalism. Need for Congress to step up.
Structural Problems with Regulatory Process •
Focus on activities and outputs, not results
•
Deficiencies in underlying analysis informing regulatory decisions
•
Ready-fire-aim approach
The Costs of Clean Power Plan, a Carbon Tax, Paris and other Climate Regs • By 2035: – An average employment shortfall of nearly 400,000 jobs; – Average employment shortfall in manufacturing of 200,000 jobs; – An aggregate gross domestic product (GDP) loss of more than $2.5 trillion (inflation-adjusted); and – A total income loss of more than $20,000 per family of four (inflationadjusted).
The Benefits • By 2100: – Clean Power Plan executed to perfection moderates .02 degrees Celsius of warming. – Totally eliminating all CO2 emissions from the U.S. would moderate any warming by only 0.137 degree Celsius; – If the entire industrialized world totally eliminated all CO2 emissions, only 0.278 degree Celsius of warming would be averted. – Even with cuts from the developing world (20 percent from China, 30 percent from the rest of the developing world) only .5 degree C averted.
The Social Cost of Carbon/Methane •
Discount rates
•
Climate Sensitivity
•
Time Horizon
Statistical models used to calculate SCC produce highly disparate results with changes in discount rates. Results from FUND Model.
Problems with Equilibrium Climate Sensitivity • Most recent IPCC assessment finds that the ECS is likely (2/3 chance) between 1.5 and 4.5℃. • Climate models show an average sensitivity of 3.2℃. • 20 studies since 2011 show the average is closer to 2℃.
Vehicles for Change •
Agencies withdrawing and re-writing regulations
•
Executive Orders/Memorandums
•
Legislation
•
•
Infrastructure
•
REINS Act, Regulatory Integrity, OIRA reform
Congressional Review Act
Questions?
Nick Loris Herbert & Joyce Morgan Fellow The Heritage Foundation [email protected]
