The more the price of natural gas falls, the stronger the case becomes for making the energy form a major fuel source in the U.S.'s energy future.Further, a 'perfect storm' of new technology, producers' reluctance to cut production, and a pricing anomaly has created a new opportunity for natural gas to emerge as a dominant energy source in the United States in the decades ahead.
It's low price, about $2.71 per Million BTUs (MBtu), technological advances that have vastly increased the capturable supply in the U.S. (to about 2,075 trillion cubic feet), and most important - its status as a domestic energy source - are three strong points in favor of increased natural gas use.
Natural gas is likely to increase its market share in home/commercial heating and in electric power generation. Natural gas is not likely to displace gasoline or diesel for vehicle propulsion, but given appropriate, increased tax incentives, inroads can be made there, as well.
How significant is natural gas in the nation's energy policy? Oil/energy analyst Daniel Yergin, co-founder of Cambridge Energy Research Associates, has called unconventional natural gas the biggest innovation in the energy business in the past 25-30 years.
True, market forces will likely reduce natural gas' price advantage over oil as natural gas use increases, but it's still likely to remain cheaper than crude, on an energy delivered per dollar basis. And perhaps natural gas' biggest advantage: Americans don't have to worry about OPEC shutting off the supply.
Financial Editor Joseph Lazzaro is based in New York.
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