Asking the Right Questions on Natural Gas

In a recent blog post, Grist writer Josie Garthwaite offers responses to six frequently asked questions on shale natural gas fracking. As Garthwaite points out, there are serious environmental issues with fracking that should be addressed and as ITIF has discussed in detail, a booming natural gas industry is by no means a long-term climate solution. But the six FAQ’s only offer a limited perspective on shale natural gas and what we should take away from its rapid emergence as a cheap energy option. Here are some additional FAQ’s ITIF would add to the list:

1. How did we get the shale natural gas boom in the first place? ITIF provided looked at this question just last week in a piece that was cross-posted on the National Journal’s Energy Experts Blog:

Natural gas is just the latest in a long history of the government supporting and investing in breakthrough technologies. Sustained federal government support since the 1970s has proven essential to the industry being able to tap into shale gas with new drilling techniques and technologies. The Breakthrough Institute, a non-partisan think tank, released a study on this very subject last year detailing how decades of government investments in R&D, tax credits, and public-private partnerships made today’s natural gas boom possible. The Associated Press found the same, observing that the Department of Energy invested roughly $137 million in gas research over three decades and that the federal tax credit for drillers constituted $10 billion between 1980 and 2002. Of course, this is counter to the narrative developed by some that the shale gas revolution is a triumph of the free market. A recent blog post by the American Enterprise Institute’s (AEI) Mark Perry, for example, insists on solely crediting “market forces” for the revolution. Another by AEI’s Steven Hayward characterizes it as occurring “away from the greedy grasp of Washington.” And IER’s Daniel Simmons in this very blog series perpetuates this narrative. The fact is even stakeholders in the shale gas industry recognize that the government was crucial to the natural gas boom happening at all. “[The Department of Energy (DOE)] did a hell of a lot of work, and I can’t give them enough credit for that,” notes geologist and former Mitchell Energy Vice President Dan Steward. “DOE started it, and other people took the ball and ran with it. You cannot diminish DOE’s involvement.”

2. How does natural gas fit into the United States’ climate and energy strategy going forward?

Taking the long-view, the most important role for natural gas is to be a useful example for renewables to follow. Natural gas is becoming the dominant source of electricity in America because dedicated public support for innovation created cheap new technologies. In light of the answer to the first question, policymakers should seek to replicate the successful role the government played in making natural gas cheaper than coal in the case of renewables. The rise of natural gas provides a useful model for rapidly deploying new energy technologies by making them cost and performance competitive on their own, in comparison to today’s policy efforts that support uncompetitive first-generation wind turbines and solar panels. The main policy takeaway from natural gas: aggressive investment in innovation can spur the development of cheaper and better clean energy technologies that can be deployed everywhere without relying on subsidies.

These are questions – and answers – that all clean energy stakeholders should be thinking about.