We examined six scenarios with different reduction targets for energy-related carbon emissions, although only three of them and the reference case are shown here for clarity. The reductions ranged from 24 percent above to 7 percent below 1990 carbon emissions levels. Natural gas consumption is expected to rise more rapidly in all the carbon reduction cases than the reference case, because of increased consumption by electric generators. Natural gas consumption in the residential, commercial, industrial, and transportation sectors is expected to be lower in the carbon reduction cases than in the reference case, because gas prices are higher and fuel switching opportunities are limited in these sectors. Natural gas prices in 2010 range from 5 cents to 70 cents per thousand cubic feet higher in the carbon reduction cases than the reference case.
Increased consumption is responsible for higher prices at the wellhead.
Natural gas production in the carbon reduction cases is higher than the reference case, because of higher consumption and prices. In 2010 gas production is 400 billion cubic feet to 2.1 trillion cubic feet higher than in the reference case. The production patterns are not quite symmetrical across the cases, because of the penetration of conservation and renewables in the high priced cases. In the 3 percent below case production and prices rise sharply after 2005, when carbon reduction begins. The lower-priced 9 percent above case shows a steadier, but ultimately bigger increase in production.