Did shale gas green the U.S. economy?

By David Lindequist & Samuel Selent. Excerpts:

"Highlights

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  We use synthetic controls to assess the effect of the shale gas boom on U.S. green house gas emissions.
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  Our findings indicate that the shale gas boom reduced average U.S. annual green house gas emissions per capita by 7.5%.
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  We decompose the total treatment effect into substitution, transition, and consumption effects.
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  Coal-to-gas substitution emerges as the largest driver of emissions reduction, despite significant increases in methane emissions.
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  The shale gas boom accelerated the transition to renewable energy, acting as a bridge fuel from 2007 to 2019.

Abstract

Since the mid-2000s, hydraulic fracturing (’fracking’) has significantly altered the U.S. energy landscape through a surge in shale gas production. Employing synthetic control methods, we evaluate the effect of the shale gas boom on U.S. emissions and various energy metrics. We find that the boom reduced average annual greenhouse gas emissions per capita by roughly 7.5%. Drawing on the existing literature on the environmental impact of shale gas, we decompose this overall treatment effect into changes in the fossil fuel mix (the substitution effect), changes in the speed of the transition to non-fossil energy sources (the transition effect), and changes in overall energy consumption (the consumption effect). Our results indicate that the estimated treatment effect is attributable to an energy mix in which natural gas replaces coal, an accelerated transition to renewable energies, and a decrease in energy consumption, largely driven by decreases in energy intensity. Our findings highlight the role of shale gas as a ’bridge fuel’ for the U.S. economy between 2007 and 2019, an energy source facilitating the transition from carbon-intensive fossil fuels to cleaner energy sources."