How Much Cash Could the Natural Gas Revolution Put in Your Pocket?

No one on Capitol Hill or Wall Street is debating the fact that natural gas is a cleaner alternative to crude oil. Nor are they denying that America is chock-full of it.

But if the economics (and economic incentives) don't make sense for both businesses and consumers, it's unlikely we'll ever see a shift toward natural gas.

The potential amount of savings to both industry and consumers from that shift are often overlooked in discussions about energy policy, taking a back seat to more tangential issues like ground contamination, air pollution, etc.

But a new paper from Yale is drawing attention to exactly how much even a small shift toward natural gas would save consumers. And it has the potential to spark the natural gas revolution.

Small Change Equals Big Savings

The authors conclude that replacing just 7% of the oil used in the U.S. each year with natural gas would save consumers $25.6 billion a year.

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That works out to $130.61 per licensed driver every year.

The number is meaningful, but remember: That's generated by replacing only 7% of oil used with natural gas.

If half of the current amount of oil used was replaced with natural gas, you're looking at $182.9 billion a year, or nearly $1,000 per year per driver.

That's $1,000 each driver could either sock away in an emergency fund, invest toward their retirement, or spend on items they've been eyeing (returning it directly back into the economy).

So Why Isn't This Happening Yet?

This shift toward natural gas won't happen unless both consumers and businesses can reap the benefits. So although the savings to consumers are substantial, that doesn't mean businesses will jump on the bandwagon.

There are billions of dollars worth of infrastructure investments necessary for this to take place -- and these investments don't make sense unless there is (or with reasonable certainty will be) a critical mass of consumers willing to make the shift to natural gas.

That's why so many energy companies have spent millions of dollars on lobbyists, working on their behalf to petition for handouts to offset the costs of these investments.

But because the federal government is so pressed for cash these days with more than $15 trillion in debt (and raising taxes is never an easy sell), this money must come from somewhere else -- often programs they've already cut back on.

So will the change to natural gas and these savings be something we see soon? It remains to be seen. But if it does come, you can rest assured that you'll be paying a lot less at the pump -- and everywhere else.