Get Ready for the Natural Gas Boom

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Our energy woes may soon be behind us. The newest issue of Foreign Affairs magazine includes an upbeat report on the large amounts of natural gas that are now economically feasible as alternative energy sources. "This development is an unmitigated boon for consumers interested in affordable energy, environmentalists looking for energy sources that emit less carbon dioxide than either oil or coal, and governments that hope to reduce the political and market power of today's major oil- and gas-producing countries," writes John Deutch. Deutch predicts that natural gas will eventually take the place of oil and its increased availability may result in regional gas markets merging "into a more integrated and open international gas market with a single price."

The large number of potential sources of usable natural gas will create more competition and, in effect, lower prices. "No longer, it seems, will the world be dependent on a few nations--Iran, Qatar, Russia, Saudi Arabia, and Turkmenistan--that control the bulk of conventional natural gas reserves,” proclaims Deutch.

Rob Reuteman at CNBC.com has also taken note of the approaching natural gas boom, but warns that two key problems may stand in the way of natural gas’s success:

1) Washington is focused on renewable energy and many regard natural gas as a "bridge fuel to ease the country's transition from foreign oil and dirty coal to carbon-free energy powered by wind, solar, biofuel and nuclear sources." But, according to Reuteman, natural gas experts argue that natural gas is actually a more viable investment than renewable energy and fear that the government might miss the boat while concentrating on the wrong product.

2) The abundance of of natural gas will mean lower prices, but consistently low prices could prevent the natural gas industry from making a profit. "The clear winners (besides users of natural gas) will be the companies that enable the production, like drillers, machinery manufacturers, infrastructure companies, service providers, etc.," stock analyst Alan Brochstein explains to Reuteman.

Despite these potential setbacks, Deutch and Reuteman agree that the rise of the environmentally-friendly natural gas industry, which is cleaner and more efficient than burning other fossil fuels, will mean exciting change in the next few years.

This article is from the archive of our partner The Wire.