Between 2007 and 2010, a leading environmental organization received $25 million in secret donations from the natural gas industry, mostly from Aubrey McClendon, then CEO of Chesapeake Energy — one of the biggest gas drilling companies in the United States and a firm heavily involved in fracking — to help fund a campaign to phase out coal-fired electricity.
This was a shrewd move by McClendon, and the anti-coal campaign he helped fund certainly helped drive new electricity generation to natural gas, which has substantially lower CO2 emissions.
But the more important driver in this switch, most experts agree, was not the high CO2 emissions of coal — but the actual lower energy cost of gas, a cost that was dramatically reduced by the innovation of people like McClendon in developing hydraulic fracking in shale deposits.
Today, many of the climate warriors who are trying to reduce carbon emissions as fast as possible — as well they should — have long since turned against the welfare of their one-time patron. Witness the apparently successful campaign to block the Atlantic Coast Pipeline, which would have carried natural gas to the East Coast from West Virginia.
Again, while the environmental groups’ campaign has been part of the story, most experts hold that it has been a cold-blooded cost calculation, made by today’s energy markets, that is turning the tide and making gas pipelines a less desirable investment.
While natural gas is a remarkable fuel (I heat and cook with it), its long-term and overall safety, and its market and price future, remain highly uncertain. And most big investors like certainty.
Gas must today compete with even cleaner energy sources, like solar and offshore wind. In a world where there is no longer a free ride to use the atmosphere as a disposal site, the certainty of low-carbon energy sources (and their prices) is much more attractive to investors.
This is hardly a new development. In 2016, Gov. Andrew Cuomo led New York state in refusing to allow hydraulic fracking for natural gas. Wall Street did not freak out, and it was clear then that gas had many hurdles in the road ahead.
Science is showing us that global warming is increasing even faster than we thought. The inexorable pressure to transition to a carbon-free energy economy is growing. Even the richest capitalist investors know this, and they are reacting predictably.
It would be good for the leaders of the natural gas (and coal) industries to acknowledge this, and join in crafting a just transition. Any other path is folly.