The Impact of Cheap Natural Gas on Marginal Emissions from Electricity Generation and Implications for Energy

James Holladay and Jacob LaRiviere
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James Holladay: Department of Economics, University of Tennessee

No 2015-07, Working Papers from University of Tennessee, Department of Economics

Abstract: We use quasi-experimental variation due to the introduction of fracking to estimate the impact of a decrease in natural gas prices on marginal air pollution emissions from electricity producers. We find natural gas generation has displaced coal fired generation as the marginal fuel source signi cantly changing the marginal emissions pro le. The impact of cheap natural gas varies across U.S. regions as a function of the existing stock of electricity generation. We demonstrate the impact of these changes on the environmental bene ts of energy policy by simulating the installation wind and solar generating capacity in di erent regions around the U.S. We construct an hourly data set of potential renewable generation for both wind and solar power and combine that with our estimated marginal emissions. CO2 emissions offset by wind and solar power have fallen over most, but not all of the country due to cheap natural gas.

Keywords: energy; air pollution; natural gas; renewable energy (search for similar items in EconPapers)
JEL-codes: E32 R10 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2015-07
New Economics Papers: this item is included in nep-ene, nep-env, nep-mac and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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http://web.utk.edu/~jhollad3/Marginal_Emissions.pdf First version, 2015 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ten:wpaper:2015-07

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