petroleum combustion, which is on the same scale of energy use as natural gas for industrial heat generation, would lead to a higher estimate of aggregate damages from energy use for heat. Available data are insufficient to conduct a parallel analysis of industrial activities that generate useful heat. This situation could be improved with greater attention by EIA to collecting fuel consumption data by county and to provide additional resolution to emissions from disaggregated industrial activities.

The results represented here are the result of an end-use assessment—that in terms of providing heat, natural gas has lower externalities than electricity. It is not an assessment of how or where to use natural gas, which can be used for direct combustion or indirectly as a fuel for generating electric power.

Overall Implications of the Results

  1. Aggregate damages associated with criteria-pollutant-forming emissions from the use of energy (primarily natural gas) for heating in the buildings and industrial sectors are low relative to damages from energy use in the electricity-generation and the transportation sectors.

  2. GHG emissions associated with the use of energy (primarily natural gas) for heating in the buildings and industrial sectors are low relative to GHG emissions associated with transportation and electricity production because natural gas carbon intensity is lower than that of coal and gasoline.

  3. The largest potential for reducing damages associated with the use of energy for heat lies in greater attention to improving the efficiency of energy use. NAS/NAE/NRC (2009a) suggests a potential for improving efficiency in the buildings and industrial sectors by 25% or more—with the likelihood that emission damages in these sectors could be held constant in spite of their growth between now and 2030.

Future Research Needs

  1. Assessment of energy use and its impacts in the industrial sector in particular (but in all sectors to some extent) could be improved by more extensive databases that contain details about specific forms of energy use and associated waste streams. Such databases should be designed so that life-cycle analysis of alternatives can be made without inadvertent double counting.

  2. A more quantitative assessment of industrial sector externalities done collaboratively by the government and industry would be valuable in informing priority setting for future initiatives to reduce the externalities associated with industrial operations. Such an assessment was not possible in this study largely because of data limitations.

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