I know how counterintuitive it sounds to say that fossil fuel production — especially through fracking as the U.S. has done in its shale plays — will help lower emissions.
Yet here’s the thing… it already has!
Even before President Obama proposed his original draft of the current Clean Power Plan, the shale boom was well underway and cutting U.S. emissions rates.
Last year, the U.S. surpassed even Russia and Saudi Arabia in oil production, and remains the world’s largest shale oil producer. This has induced a glut of both oil and natural gas which, despite dropping prices for each of those products, has helped the country’s economy and energy sector.
More oil means more available refined crude and petroleum products to sell on the global markets. And the glut of natural gas has boosted the U.S.’s energy independence and reduced energy costs to between 30% and 50% lower than that of foreign competitors.
It has also made the country the top carbon emissions reducer in the world. According to the American Petroleum Institute, this is due to the high volume of investment from the oil and gas industry into emissions reduction technology.
In the case of natural gas, I’m sure you can see why this is important: the less gas that is emitted into the air, the more gas saved for companies to sell.
The Clean Power Plan calls for a 32% reduction in carbon emissions from 2005 levels by 2030. However, the onset of fracking has already reduced emissions by 26% since 2007. Some believe the goals set by the plan could be achieved without actual government encouragement, and instead by the power of market forces and innovation.
Fracking for fossil fuels has grown the economy about 50% in the last 27 years, and according to the Boston Consulting Group, the same technology could help improve U.S. manufacturing to a higher quality than that of China.
Now, the oil and gas markets are low right now. But consumer spending isn’t, and refined crude and petroleum products are getting better. Not to mention the use of natural gas as a cleaner energy source continues to aid both emissions levels and energy costs.
It may be a stretch to say the Clean Power Plan won’t help cut emissions further, but it would be downright foolish to cut the use of fracking for fossil fuels out of the mix.
To continue reading…
Until next time,
A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
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