With the way natural gas is trending, it seems foolish for the United States to not expand its use for the nation's energy needs in the decade ahead.True, natural gas' price, which traded Friday at $2.72 per million BTUs (MMBtu), will likely rise as natural gas demand increases with the U.S. economic recovery, but it will still probably be at least price competitive with oil. Right now, natural gas is at a decided price advantage versus oil: Oil, which is around $68 per barrel, currently is about 25 times the price of natural gas, while the historical average is about 8.4 over the past decade.
The other major plus for natural gas, besides price? It's a plentiful, domestic energy form, with the latest Potential Gas Committee research placing estimated reserves at 2,074 trillion cubic feet in 2008, up from 1,532 trillion cubic feet in 2006.
If more homes and businesses in the United States convert to natural gas for heat, and if more electric utility companies do the same for power generation, the two changes will decrease the nation's dependence on oil, and will also decrease greenhouse gas emission (the latter being due to natural gas' status as a cleaner energy source than coal).
And those increased natural gas uses will also mean more energy dollars are retained in the U.S. -- creating more domestic jobs and making more dollars available for investment -- no modest advantages in a U.S. economy that needs both.
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Reader Comments (Page 1 of 1)
9-07-2009 @ 2:59PM
ij70 said...
Welcome back Mr. Lazzaro :)
9-08-2009 @ 5:34AM
al coholic said...
What ever happened to all those LNG ports we were going to build?
9-08-2009 @ 2:24PM
Iridium said...
Joe, why do you always want commodities to go up in price?
Why do you always want to create a profit opportunity for people who have no business in the gas market?
Why can't we just have a market system where the production and consumption of natural gas sets the price of the commodity?
When you allow more hands to touch a product all you end up with is a higher price that shouldn't be there. You harm the end user.
Imagine what would happen if we eliminated all the middlemen that touch an oil contract. Right now over $60 of an oil contract is middlemen costs. The true price for a barrel of oil on the production side is less that $6. A fair market price to a refiner would be $10-12. That is if the market determined the price.
The problem is that a free market does not determine the price. The socialist institution of the commodity trading market determines the price.
If we allow natural gas to be traded by the rules of the oil market thousands of people will die from cold this winter because they will not be able to afford to heat thier homes. Thousands of newborns will die. Maybe even my newborn son if I can't afford my gas bill because some genious on Wall Street decided that $50 per million BTU is a fair price to pay for natural gas. That would be in line with $100 oil.
Do you want all of these dead people on your conscience Joe? People dying isn't a good enough reason to turn down an opportunity for profit though. I understand, as long as the dying person isn't you and you get a increase in your portfolio all is right with the world.