Natural gas: Shale of the century | The Economist

AMERICA’S “unconventional” gas boom continues to amaze. Between 2005 and 2010 the country’s shale-gas industry, which produces natural gas from shale rock by bombarding it with water and chemicals—a technique known as hydraulic fracturing, or “fracking”—grew by 45% a year. As a proportion of America’s overall gas production shale gas has increased from 4% in 2005 to 24% today. America produces more gas than it knows what to do with. Its storage facilities are rapidly filling, and its gas price (prices for gas, unlike oil, are set regionally) has collapsed. Last month it dipped below $2 per million British thermal units (mBtu): less than a sixth of the pre-boom price and too low for producers to break even.

Those are problems most European and Asian countries, which respectively pay roughly four and six times more for their gas, would relish. America’s gas boom confers a huge economic advantage. It has created hundreds of thousands of jobs, directly and indirectly. And it has rejuvenated several industries, including petrochemicals, where ethane produced from natural gas is a feedstock.

...But they would not address the big problem with shale gas and all fossil fuels: the global warming they cause. Without a serious effort to boost renewable energy and other low-carbon technologies, the IEA envisages warming of over 3.5°C. That could be unaffordable.

- Bishop Hill blog - Libertarians do carbon taxes

As the chart shows, there are two estimates for the effect of relatively small warming - one positive and one negative, but Tol tweeted the other day that the author of the study predicting negative consequences has since changed his mind, so it appears that there is now a consensus (of sorts) that small warming will have beneficial effects for mankind (but see all the caveats above about whether we should believe any estimate based on climate science).

Think about the implications of this. If we are to believe the IPCC's central estimate of future warming of 2°C/century, then for the next hundred years - which is to say at least for the rest of my lifetime - I am on average increasing the value of my neighbour's property, not damaging it. I'm not sure I can accept being punished with a carbon tax for doing this.