Shale oil and gas booms: Consequences for agricultural and biofuel industries

This paper examines and quantifies the consequences of increases in supplies of oil and gas from shale resources for the US economy and its agricultural and biofuel industries using a computable general equilibrium modeling framework under alternative economic conditions and emissions reduction policies. It shows that increases in supplies of oil and gas from shale resources generate enormous gains for the US economy. The question is do we use it all for higher economic growth or do we allocate part of it for reducing future global warming. This paper shows that we can sacrifice about 43% of the gains to reduce GHG emissions by 27%. Finally, the results of this paper indicate that in the presence of shale resources elimination of biofuel mandates negatively affect biofuels and crop industries. However, the impact is not huge because using shale resources increases national income and that generates a higher demand for food (including livestock product) which eventually prevents a big fall in demand for crops