Written by Michael Vrtis, President of Realgy Energy Services in response to the CNBC article “Natural Gas Could Be Bigger Than the Internet, Welch Says

I greatly admire Mr. Welch, having worked for him at one time. I read his article with interest and thought his statements invited comment.

Natural gas availability has been plentiful and the availability of more domestic supply calls for long term planning considerations.

U.S. Natural Gas Marketed Production from 1900 to 2012 – courtesy of EIA

In planning for the long term, consider just the following two facts:

The United States already has a more than $2.00 advantage per dekatherm (MCF) over the rest of the world. The US average cost of natural gas is about $4.00 and the remainder of the world is over $6.00.

The amount of gas discovered and presently available has occurred with a method of recovery (hydraulic fracturing or fracking) that has been exempt from most of the Federal environmental regulations. State environmental regulations are not superseded by this Federal action. Thus, states can set their own environmental regulation.  The growing state concern is ground water pollution, considering that it takes only 1-2 drops of a petroleum product (frack fluid) to make over 1,000 gals of ground water undrinkable.

So it is not regulation that will prevent natural gas from accelerating the US economy. Instead it is the over inflation of a political issue instead of any economic or environmental issue

Reducing our cost of natural gas has already occurred, reducing it further should not come at the expense of ground water.

Mr. Welch was a great business leader but his comments on regulation of natural gas fracking appear geared more toward political posturing than balancing the economic and environmental concerns that come with recovering natural gas.

Check out the CNBC article: Natural Gas Could Be Bigger Than the Internet, Welch Says