In a surprising turn of events, over the last few years America has dramatically lowered the amount of CO2 being released into the atmosphere. In fact, current CO2 emissions are back to where they were in 1992. A triumphant success of government regulations, right???
Wrong.
The reason we've been able to do this is that a market innovation -- hydraulic fracking technology -- has lowered the price of natural gas from over $10 per thousand cubic feet in 2005 to around $3 per thousand cubic feet today. This had made natural gas cheaper than coal.
As a result, the amount of our electricity that we get from coal has dropped from 50% of the total to 35% of the total today, as operators have switched to natural gas.
Most of the world's politicians, regulators, and climate "scientists" had no idea that this was coming because it happened as a result of market innovations, not heavy-handed government regulations.
What is hydraulic fracking? It's a method for extracting natural gas (or oil) from rock deep below the earth's surface. A mixture of pressurize water and sand to used to force fissures in the rock, making it easier for the gas to escape.
Fracking was first invented in 1947, but it wasn't heavily used until 1997 in Texas.
The U.S. has the second largest shale deposits in the world. Fracking technology has unlocked an estimated additional 100 year reserve of natural gas in the U.S.
Here's the fun part: The U.S. should be able to meet it's proposed obligations under the Kyoto protocols (which we never signed) by 2020, without the heavy hand of government forcing the issue.
This is a true triumph of the free market that should teach the busy body politicians to keep their desires to micromanage the economy to themselves and let people be free to innovate to solve our problems.
