Fracked natural gas is dirtier than coal?
Yes.. Jan, a student in my environmental economics class, expanded on his blog post in his class paper [pdf] on the costs and benefits of hydraulic fracking of shale to free natural gas (aka, methane).
This result is driven by the far stronger impact of unburned (compared to burned) methane on climate change and the high cost of trying to control leaks in the many steps between the well and final user.
Given that 1,000 cubic feet (MCF) of natural gas weighs 62 pounds and 1 MCF sells for about US$4 (C$5 or so), the simplest rule would be to, for example, close an open valve (cost = $0) that’s leaking more than 11,000 MCF per year as that’s worth about C$55,000.
Going back to that "open valve", we’re talking about a leak that would have a social cost of $277,000 (C$370,000), which is nearly 7 times higher than its market (lost opportunity to sell) cost.
Alberta’s regulator, in other words, is allowing far more leakage and venting based on private costs and benefits than it would if it used social actual costs and benefits.
This result doesn’t surprise me, since the regulator works for industry, but it should help you see how mismanaged the natural gas industry is.
(Don’t even get me started about "voluntary data reporting" etc.!)
Bottom line: Years ago I suggested that the natural gas/fracking industry should "take the high road" to setting tough regulatory and performance standards as that would allow them to make greater profits and keep the public on their side.
They have failed to do this in a rush to make profits… and hasten climate change.