In response to “Natural Gas Could Be Bigger Than the Internet, Welch Says”
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 State environmental regulations are not superseded by this Federal action.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”
4 Reasons why Natural Gas is So Cheap
1. Markets are Local
Natural gas from American wells is transported through pipelines on land across the US. Unlike oil which must be shipped in from overseas
2. Mild Winters
The mild winter of 2011 resulted in less demand for natural gas to heat homes, leaving suppliers with too much natural gas still in storage.
3. Fracking
Fracking has greatly increased the supplies of natural gas in America.
4. Lack of Consumer Demand
Only 19% of natural gas consumption in America is used by end consumers, 31% is used to create electricity in power plants and 28% is used in industrial settings.
Read the whole story at Investopedia
In response to “Fracking is Misunderstood”
Written by Michael Vrtis President of Realgy Energy Services in response to the Forbes article “Fracking Is Misunderstood, It’s The Key To Energy Self-Sufficiency”
This article articulates that the US should embrace fracking on the basis that it can lead to energy independence. Given the free-trade mantra advocated for years if not decades I chuckle at the thought of independence in energy.
So what does fracking mean to you and the US?
- Fracking will evolve as a technique for extracting natural gas.
- Its impact on the US cannot be understated; this is like finding a Saudi Arabian natural gas field in our backyard!
- It has the potential to keep the US below the world market price for natural gas for decades to come (currently by almost $5.00 / Dth)
- Manufacturing will return to the US to take advantage of lower energy costs
- Air pollution will decrease in the Northeast US
- The EPA will regulate the fracking fluid and will require ground water and aquifer monitoring; this is a responsible position and will prevent restricting the fracking technique
Instead of politician trying to seek energy independence I would like to see them embrace natural gas and encourage its use as a transportation fuel. This will reducing oil imports of which 60% is used as transportation fuel.
Forbes, “Fracking is Misunderstood, It’s the Key to Energy Self-Sufficiency”
In Response to “IBM’s Battery 500 Project”
Written by Michael Vrtis President of Realgy Energy Services in response to “IBM’s Battery 500 project”
The known amount of natural gas in the US has increased over the last 5 years to the point that it now represents over 20% of all the US’s energy reserves (remember some call the US the Saudi Arabia of coal). The natural gas recoverable by the use of hydraulic fracturing (fracking) is a game changer for the US.
Map of Shale Gas in the US courtesy of US EIA (July 2011)
There is discussion among business leaders (not politicians) that the conversion to natural gas vehicles and investment in natural gas distribution could reduce oil imports over 60% within 5 years! This is not a political aspiration it’s business.
How has the electric energy industry responded?
Well electricity and natural gas have always been competitors through technology. Natural gas heating applications have been constantly targeted by electric heating. Electric motors have been challenged by natural gas driven engines. Large electric driven air conditioning systems have competed with natural gas driven absorption technology.
So given that natural gas resources (from fracking) has allowed natural gas to truly challenge gasoline as a transportation fuel I am not surprised that an electric option will not be far behind!
Let’s keep competing.
Huffington Post, Tech “EV’s Holy Grail: 500 Miles on a Single Charge”