THE IMPACTS OF SHALE GAS DEVELOPMENT ON COAL IN THE U.S. ELECTRICITY INDUSTRY

摘要

The dramatic rise in liquid and natural gas production is changing the energy structure in the United States (U.S.). One region of focus in the development of shale gas is the state of West Virginia where the Marcellus shale gas basin underlies most of the state, in addition to being a major coal producing state. The Marcellus shale gas basin also crosses under Pennsylvania and New York; in these three states from 2005 thru 2011, shale gas wells increased from 27 to over 11,0000. The boom in upstream shale gas development resulted in a decreased price of natural gas shifting energy demand away from coal in the short run-the development of shale gas is impacting the coal industry in the U.S. and the long term effects of shale gas on the energy mix are uncertain. Some of the market impacts between shale gas and coal are compounded by stricter environmental regulations sometimes resulting in the closure of coal mines and the early retirement of coal-fired power plants, which-even if only short term decreases in production result-can generate social and economic problems in the long run. This paper details a brief history of the explosive development of Marcellus shale gas and provides a discussion of the subsequent impacts on the coal industry in the United States. Given the dominant role of coal in China‘s energy supply and the presence of large shale gas reserves in the country, this paper can serve as a guide to the Chinese coal industry on the economic repercussions for the U.S. coal industry of the development of the shale gas industry; and for the developing Chinese shale gas industry, this paper can provide information to help current and future shale gas development move forward efficiently. For both China and the U.S., this paper highlights the trade-offs involved in the development of coal and gas resources and markets, which assists in providing background information for assessing future energy trends and strategies. By focusing on future energy markets and broader environmental concerns, it is possible to introduce and perform analysis to predict the future of coal industrial development in the United States.