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SummaryRecent declines in CO2 emissions in the US have made shale gas a fossil fuel of much adulation, but this reputation is unfounded. We show that price driven displacement of coal by natural gas can account for just around 10% of the CO2 reductions during the period 2006-11. Nearly 90% of the cuts in CO2 emissions were caused by: (1) the decline in petroleum use in the transportation sector, (2) displacement of coal by mostly non-price factors, and (3) its replacement by wind, hydro and other renewables.Each ton of CO2 saved from price driven displacement of coal by gas in the electricity sector was offset by a ton or more of CO2 from its increased use in commercial, residential and industrial sectors.We also show that both renewables and energy efficiency measures independently outperform the CO2 savings from coal-to-gas displacement, indicating that natural gas can at best play a peripheral role in cutting CO2 emissions, and it cannot substitute for authentic climate policies based on regulations, clean energy standards and carbon price.Natural gas deserves credit where it is due, but pro-gas advocacy has led to a significant overstatement of the true CO2 cutting credentials of shale gas. This is a mistake and it undercuts the effort to keep policy discussions accurate.Many are adrenalized by shale gas, but let’s not lose track of what it can or cannot do for climate change. Natural gas is at its best when it displaces coal, but it is at its worst when it suppresses renewables and energy conservation. Striking the right balance will need a mix of policies including clean energy standards, energy efficiency programs, regulations and a carbon tax; unfettered shale gas supply is not the answer.
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