Natural gas could brighten America's energy future

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It's plausible to argue that oil, the world's most important commodity, will contribute to another U.S. recession, as it did in 1973-74, 1979-80, and 2008-09. So you have to ask if there is another fossil-based energy source that can weaken, if not break, oil's grip on the U.S. economy? Natural gas has a chance, if the right factors line-up.

Natural gas: looking better all the time

There are objective events in the natural gas market that could substantially increase both the U.S.'s natural gas supply and use in the decade ahead. Here's the low-down:

Chief among these is an estimated U.S. natural gas reserve increase of 35 percent, due to new drilling technologies that are unlocking large amounts of natural gas from shale rocks, according to a new study by the Potential Gas Committee, The New York Times reported. The shale gas, or unconventional gas, is freed in a process called 'hydraulic fracturing.'

If all of that extra natural gas is able to be tapped, estimated U.S. natural gas reserves would totaled 2,074 trillion cubic feet in 2008, up from 1,532 trillion cubic feet in 2006, when the last report was issued, The Times reported.

Veteran energy/oil industry analyst Daniel Yergin of Cambridge Energy Research Associates, told Bloomberg Radio that, "The biggest innovation in the energy business has been unconventional natural gas."

A domestic energy source

Further, natural gas has what economists call a 'source advantage' over oil: An enormous amount of natural gas exists in the United States. There's no need to worry about the shifting political sands in the Middle East, Venezuelan autocrats, or other geopolitical factors jeopardizing the energy supply. Further, although natural gas can be shipped by large tankers, it's best produced regionally, or transported by pipeline.

Why hasn't natural gas accounted for a larger portion of the nation's total energy use? In cars, the ease and (before this decade) low-cost of gasoline kept it the motor fuel of choice. In electric power generation, intolerably dirtier coal is vastly cheaper. And up until this decade, climate change was ignored: Sustained efforts to reduce pollution and emissions will reduce coal's advantage over natural gas. In homes and businesses, particularly in the northeast U.S., oil was the established fuel, but that's changing: cleaner gas burners and those aforementioned oil shocks are convincing families and businesses to convert to natural gas, where possible.

Another area likely to reinforce the trend to natural gas and away from oil: large vehicle fleets, particularly mass transit systems, such as buses. Look for more systems to convert wholesale to natural gas buses, retiring diesel fleets. Get stuck driving behind one decades-old diesel bus and you'll understand why it makes sense to convert these vehicles to natural gas.

What's prevented even more access to shale gas? Natural gas' price. Natural gas traded Tuesday afternoon up 14 cents to $3.39 per million BTUs. Guy Caruso, a former administrator for the U.S. Energy Information Administration, told The Times natural gas prices would have to rise to $4-$6 per million BTUs to justify developing shale beds.

Energy Analysis: Natural gas can play a large role in the nation's move away from oil, and from dirtier energy sources, in all zones: residential, commercial, power generation, and transportation. Concerning electric power, renewable sources, such as wind and solar, continue to progress, but those two alone will not be able to displace carbon dioxide-laden coal's 50 percent market share at power plants: that's a market share that natural gas, along with nuclear power, can substantially cut. Meanwhile, homes and businesses can continue to switch to natural gas heat from oil, with considerable benefits to their budgets. Natural gas as a vehicle fuel remains more-complex: public fleet use will increase, but there's little likelihood of natural gas displacing gasoline as a primary civilian car fuel.

Bottom Line: It behooves the nation to use natural gas where possible, and reduce the nation's dependence on the dirty coal and unpredictable oil energy sources.

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