Natural gas is a strong positive for U.S. economy

July 31, 2013 

LNG stands for liquefied natural gas, and it’s all over the news this year. You might even have seen advertisements on television about natural gas or heard them on the radio. Why is LNG such a big deal? Well, according to the American Gas Association, “Natural gas supports 2.8 million jobs, either directly through companies engaged in exploration and drilling or indirectly through manufacturers that use the fuel as a raw material.” It is expected that this industry will create another 1.5 million jobs by 2015.

Natural gas is a fossil fuel. Fossil fuels are formed when organic matter is compressed underground at very high pressure for a very long time. An interesting thing about natural gas is that it forms under higher temperatures, or deeper in Earth, than oil. In its natural form, it is difficult to store or transport, so it is liquefied. Cooling natural gas to -260 degrees Fahrenheit turns the condensation of the gas into liquid form. Then it can be transported by pipeline or truck.

Natural gas is used to heat half of our nation’s homes, but it is also used to produce steel, glass, paper, clothing, brick and electricity. It is also a raw material for paint, fertilizer and plastics.

According to the economic research firm IHS in Englewood, Colo., conventional drilling and hydraulic fracturing, or “fracking,” have unlocked 3,400 trillion cubic feet of natural gas in North America. This is enough gas to supply U.S. consumers at current demand levels for 100 years. All of this activity contributes to our gross national product, creates tax revenue and increases our opportunities to export to other countries. Low gas prices in the U.S. are contributing to a 10 percent reduction in energy costs, and even more, encouraging manufacturers to expand operations in the U.S., and to bring overseas manufacturing operations back to the U.S.

The largest gas field is the Marcellus Shale, which spans West Virginia, New York, Pennsylvania, Ohio and Maryland. It is estimated that the Marcellus Shale could produce 493 trillion cubic feet of gas over its 50- to 100-year life span. That is enough gas to power every natural gas-burning device in the U.S. for more than 20 years. The Barnett Shale covers at least 24 counties in North Texas and is estimated to contain as much as 26 trillion cubic feet. The Haynesville Shale in Louisiana could potentially contain as much as 26 trillion cubic feet. The Antrim Shale that covers much of Michigan and the Eagle Ford Shale in South Texas are the most recent shale finds.

So, when will you begin driving a natural-gas-powered vehicle? A number of auto manufacturers are working on prototypes, but the problem is the lack of natural gas filling stations. Currently, at least five companies are planning to build 50-100 natural gas filling stations each, across the U.S. Their primary goal is to service the trucking industry (where cost savings will be dramatic), but once those stations are operational, there will be more interest in natural gas-powered automobiles. And, two large energy companies have partnered with home appliance manufacturers to develop affordable refueling equipment that plugs into household gas lines.

With a potential contribution to our GDP of $118 billion in 2015, the creation of new jobs, and the potential for cutting numerous consumer costs, natural gas is positive for our economy, and that is worth keeping an eye on.

Sherri Goss is vice president of Rosenberg Financial Group Inc., with offices in Macon and Warner Robins. Contact her at 922-8100 or sherri@rfmoney.com.

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