Gas Tap

The U.S. once relied on large quantities of coal and oil for electric generation and home heating. However, rising awareness of the need for clean energy has created a growing demand for natural gas. Power stations now use clean-burning gas. And millions of homeowners around the nation switched to natural gas for their home-heating, cooking, water heating and other needs.

But there was a problem – to meet soaring demand, the country relied on imports from overseas. The added costs were regulated to the consumer. The environment suffered as coal continued to be used in many regions.

Everything changed about a decade ago with the discovery of cost-effective techniques for the extraction of natural gas from vast shale deposits underlying many parts of the country. Known as “shale gas,” this resource has revolutionized the North American energy sector and provided a boost to the U.S. economy by delivering an abundance of clean power from domestic sources at rock-bottom prices.

“By untapping shale gas, huge supplies of natural gas can now be provided at a very low cost to the consumer,” said Mark Axford, principal at Houston, Texas-based energy consultancy Axford Consulting. “Shale gas is a real economic windfall for the USA. It saves the consumer a lot of money on utility bills and provides cheap power to American industry.”

An Endless Supply of Clean Energy

The U.S. Energy Information Administration (EIA) noted the nation produced 1.576 million cubic feet of natural gas in January 2007. Ten years later that number had risen to 2.329 million cubic feet. That’s an increase of 50 percent, a number that is projected to grow as more shale gas resources are discovered and made available for energy use by homes and businesses. During that same period, imports of natural gas dropped by 50 percent.

“Importation of liquefied natural gas (LNG) from overseas have all but disappeared,” Axford said. “There is so much domestic natural gas available that the U.S. is now exporting LNG for the first time.”

In addition, the U.S. has become a major exporter of natural gas to Mexico. Indeed, America’s neighbor to the south is in the midst of its own energy revolution, switching over from burning oil and coal to clean natural gas. It is expanding its pipeline network to be able to import even more natural gas from Texas. This puts the American economy on an even stronger footing.

The latest EIA Short-Term Energy Outlook forecasts that domestic natural gas production will reach annual record levels in 2018 and 2019. This growth stems from the discovery of new shale formations across the country, as innovations allow for the development of vast, previously unreachable oil and natural gas resources. This represents a leap of 9.3 percent from 2017 to 2018, and a 3.2 percent increase from 2018 to 2019. The more natural gas resources that are discovered, the better it is for the country, for local communities, the environment and the consumer.

“Natural gas development is a major economic driver, especially for local communities,” said Matt Mandel, senior consultant, energy and natural resources for FTI Consulting, Inc. “In addition to creating production jobs and boosting investment spending, shale development has also been found to increase wages and decrease a region’s overall unemployment.”

A study by the Business Council for Sustainable Energy found that American consumers spent less on energy due to shale natural gas production. This has lowered average electricity prices by 3 percent nationally, with states such as Texas, New York and Florida experiencing a 10 percent drop. This also translates into savings in the home, according to research by the University of Pennsylvania. Following a 2,800 percent increase in natural gas production in that state between 2007 and 2016, gas bills dropped by 40 percent and average utility bills declined by 75 percent. While not every state has gained the same benefits as Pennsylvania, EIA analysis finds an average annual energy cost drop of 14 percent per household in the U.S.

Local communities rank high among the beneficiaries. A University of Texas at San Antonio study found that oil and gas production in the Eagle Ford Shale region of Texas provided more than $4.4 billion to local and state governments. This added up to $87 billion in economic output and supported almost 155,000 jobs in one year.

“Over the next year, the U.S. is positioned to continue its ascent as a global oil-and-gas-producing superpower,” Mandel said.

Environmental Impact

The fuel used in American power plants can either be coal, diesel oil or natural gas. Axford said emissions are double for diesel compared to natural gas. But when compared to coal, natural gas does even better. A state-of-the-art coal plant with all the latest emission control and pollution reduction technologies produces far more emissions than a similarly sized natural gas power plant.

  • 2,100 tons of nitrous oxide per year from coal versus 380 tons for natural gas (18 percent)
  • 2,500 tons of sulfur dioxide per year from coal versus zero for natural gas (0 percent)
  • 63 million tons of carbon monoxide per year from coal versus 2 million for natural gas (31 percent)
  • 400 tons of additional harmful particles per year versus virtually none for natural gas (0 percent)

“Natural gas is good for the environment,” noted Axford. “A modern natural gas plant is also 50 percent more efficient at producing electricity compared to the latest coal plants.”

In short, natural gas is an environmentally friendly and energy-efficient fuel. That’s good news for consumers, especially when monthly bills come rolling in. And, it’s good news for North American industry.

Natural Gas Tap was written by Drew Robb for Natural Living, a publication distributed by Southeast Gas and published by Energy Solutions Center.