In June, the question was posed to a group of executives from various factions within the energy sector if the United States should begin relying more heavily on natural gas.
The discussion was in response to the latest news that the US is now the top producer of oil and natural gas, and also in light of the fact that natural gas is the safer of the two for the production of electricity.
Almost across the board their response was to beware relying too heavily on any one source of energy – be it natural gas; oil; solar; nuclear, or any other fuel currently in use.
Why natural gas has come to the forefront
At the moment, the cost of natural gas is extremely low, in fact at an all-time low which is causing many to wonder if it is perhaps the best solution going forward for the production of electricity, as well as in heating and other energy solutions.
For example, it is possible for homeowners to utilize a fireplace insert that operates with natural gas to heat their homes at a cost lower than that of electricity and that burns far cleaner than wood or wood chips.
Factory Buys Direct offers a line of highly efficient natural gas log sets that can be installed cheaply and operated cheaply as well.
Given the lower cost of natural gas, this is a wise move on the part of homeowners, but what about from the vantage point of large electricity producers?
Learning from the Enron debacle
It was just 14 years ago that Enron was brought down after Ken Lay, its chair at the time, said that investing in the company’s pension with company stock was the most strategic move to make.
This has gone down in history as one of the ‘mistakes’ to avoid when relying solely on one source of energy or company within that sector. Not only was the company brought low but executives’ heads hit the block as well did many of their cronies’ fall from grace.
Today’s executives within the energy sector advise against relying too heavily on any one source of energy to avoid situations like this in the future.
If not natural gas – what?
Given the low cost of natural gas currently, as well as the fact that it is a clean burn in comparison to other fuels, it is only natural to focus on producing and using more.
However, as with the petroleum crisis (or crises as the case may be) experts are saying that it is imprudent to rely too heavily on it for obvious reasons.
At the moment, the US is a leading producer because of fracking but we all know the political climate is fraught with tension when the word ‘fracking’ is mentioned.
Political activists are fighting the process and whether or not they will be successful is anyone’s guess as increasing numbers of environmental groups join the debate.
In the end, the best advice for the future is to diversify both in terms of investment as well as in finding solutions to the ever increasing demands for energy.
While there is no reason to believe that the production of natural gas will slow down at any time in the near future, there are other historical moments that indicate the energy sector is not prescient, so it is best to keep other doors open as well.