Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Joy of Natural Gas, It's Here Aplenty

Commodities / Natural Gas May 18, 2011 - 06:45 AM GMT

By: OilPrice_Com

Commodities Best Financial Markets Analysis ArticleTired of high gasoline pump prices? Wondering why, with our fearsome energy hunger, all the energy seems to be in the Middle East?

That was yesterday's story.


Almost overnight -- well, in a few short years -- the energy picture has been changing in the US. We are not energy beggars anymore. We have energy bounty -- and that does not include the energy from wind and sun, or the controversial energy from the atom.

Now we have plenty of the most versatile of the hydrocarbons -- more versatile than coal, and oil. It is natural gas; and it is going to change the face of America remarkably quickly, whether it is used to make electricity for electric cars or is burned directly in cars.

Natural gas is the new oil, maybe the new gold, and certainly the most exciting energy development in a long time.

Indeed, it is a Cinderella story: a hopeless orphan who is now the belle of the ball.

Originally, natural gas was found in conjunction with oil and was regarded as something of a nuisance. It was mostly cursed and "flared" or burned at the well; and it is still flared when there is no way of moving it to market, either in a pipe or as a liquid. Cities favored a low-grade gas made from coal for lamps and heating because coal could be transported by rail.

But natural gas turned out to be a wonderful feedstock for fertilizers and many other manufactures and chemicals. It also demonstrated its superiority over coal gas for heating and cooking, and a network of pipelines spread across the nation.

Even as the usefulness of natural gas spread, so did the political desire to control it. The Federal Power Commission, the predecessor of today's Federal Energy Regulatory Commission, issued what became known infamously as the Permian Basin decision. It said that natural gas in interstate commerce had to have the price regulated by the federal government.

The result was two classes of gas, interstate and intrastate. It was a disaster, coming as the demand for gas was rising.

Then came the 1973 Arab Oil Embargo, which meant that gas was wanted for things oil had been used for up until then. Growing gas demand coincided with severe shortage not only in the pipelines, but also in proven reserves in the ground -- low regulated prices had cut into exploration. The outlook for gas was bleak.

By 1977, the Carter administration had declared natural gas a "depleted resource." There was panic. Newspapers listed all the good things we got from natural gas. Congress decided it was too useful to be burned, and it passed the Fuel Use Act.

Henceforth, gas was to he husbanded. Pilot lights on domestic cooking stoves were banned, as were all decorative uses of flames. Even the eternal flame at Arlington National Cemetery was nearly extinguished.

In 1987 natural gas was deregulated, and the companies started exploring and drilling again. The gas shortage transformed itself into a "gas bubble." When I told a meeting of Wall Street analysts in the early-1980s that natural gas would again be used for electric generation they were disbelieving. As I left the building, one analyst said to another, "Very droll, but he doesn't know what he's talking about."

But it did happen, and in a big way; not only was more natural gas being sought, but technology was set to change the amount of gas available and the way it could be used.

The first technological advance was a very efficient, gas-burning machine for utilities, the aeroderivative turbine. Then came horizontal drilling, which allows a single gas or oil well to stretch out tentacles for miles in every direction. This drilling technology opened up old gas and oil fields for further exploitation and made new ones very profitable.

The final jewel in the natural gas crown was the ability of drillers to start breaking up rocks in the shale band -- between 6,000 and 9,000 feet below the surface -- in areas that were not before thought to contain gas. The first, and largest field thus developed, is the Marcellus field which extends through Pennsylvania, New York, West Virginia and Ohio.

El Dorado now -- except for environmental concern about the chemicals used to break the rock, in a process called "fracking." Also, groundwater has been affected in many locations; and there is video of tap water burning.

But proponents of natural gas point out that it has half the greenhouse emissions of coal, and few or no nitrous oxides. Natural gas is set to do for the United States what North Sea oil has done for Britain and Norway.

Source: http://oilprice.com/Energy/Natural-Gas/The-Joy-of-Natural-Gas-It-s-Here-Aplenty.html

By Llewellyn King in Washington DC for OilPrice.com who offer detailed analysis on Crude oil, Natural Gas, Geopolitics, Gold and most other Commodities. They also provide free political and economic intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. To find out more visit their website at: http://www.oilprice.com

© 2010 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Nancy
19 May 11, 09:41
joy of natural gas - planet la la land

Mr Oilpriceking you are too busy watching your charts and not watching the demonstrations, political agitations over destroyed farmland, water resources and food security.

Natural Gas - you can't eat it and you can't drink it. Agriculture will soon take over natural gas - if the speculators have left any farmland and waters untouched. Please provide your address so that the hoards of hungry can visit your place for a free feed. After all you are suggesting that killing of farmland and livelihoods for profit by self indulgent.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in