Exploration Recap

To end my series of blog posts, I will review what I have covered in my blogging on the natural gas exploration front.

One of the most recent new frontiers in the exploration for natural gas is in the oceans.  With the ability to transport natural gas without the need of pipelines thanks to LNG, gas companies are now able to extract the once inaccessible natural gas from the seas directly onto boats to be exported.

In week two we examined Australia and unveiled that it is one of the hottest places for natural gas exploration.  This is large in part due to the small population Australia has in comparison to its large supply of natural gas, meaning the country has large quantities of gas for export.  Other factors include the countries spars population over most of its land and it’s gas rich oceans off of its western coast.

Week three brought a post about LNG and why it is such an important factor in the movement towards natural gas.  It is because of LNG that natural gas can be exported on a large scale from countries with gas surplus to countries with a need for more energy resources.  LNG not only makes international trade possible because of the physical form of moving it, but also because it allows companies to do so efficiently.

For week five I posted about the power of exploration rights to put into perspective what a valuable commodity natural gas is and is becoming.  This was exemplified by the Russian gas giant Gazprom who allegedly offered the money short country of Cyprus a privately funded $10 billion bailout plan in exchange for exclusive exploration rights.

This will be my last blog post for thenaturalgasALTERNATIVE and I would like to say to all of our readers, thank you for joining us and listening to what we had to say about the natural gas industry.

Economy Recap

So where do we go from here? The past few years have been rough for the US economy to say the least, but with the recent shale boom and increased production in natural gas, there might be hope for a bright US economic future.

 

As I mentioned last week in my blog, Pushing the Economy Forward, the economy needs to get back on its feet and I believe that natural gas in the manufacturing industry will help make this a reality. The US has the largest manufacturing sector in the world and growth in domestic manufacturing has a multiplier effect on the broader state of our economy. More production in this sector alone can lead to new capital investments, help create more jobs, and increase the US exports of value added products; the GDP of the US will automatically see improvements and therefore get the ball rolling on the economy.

 

Increasing production in the manufacturing sector using natural gas should not be a problem considering the US has the lowest price in the world. Since 2005, the production of natural gas in the states has increased more than 25% and is expected to continue increasing into the later years. As of right now the US is producing more natural gas than the public is consuming, so what should we do with the excess amount of natural gas?

 

Exporting natural gas from the states has been a controversy ever since we started to accumulate excess amounts of it. Although there are certain groups fighting against the exportation of natural gas, this new era of sustainable energy has just begun, and in due time the US will become a major exporter of this “hot” commodity.

 

This new wave of energy has brought new light into the economy. Companies in several sectors of the economy, such as manufacturing, oil and gas, chemical, and many more, are now becoming more competitive than they have been in recent years. Competition is what makes an economy thrive and keeps them going.

 

If the excitement about natural gas continues, which it will, it will create a snow ball effect not only on a domestic economic level but on a global level as well. Countries who invest in this new sustainable energy will also see improvements in their domestic sectors as well as its overall economy. And when the power house economies thrive, it pushes other economies to thrive as well.

 

What do you know, there may be hope for our futures after all!

What is the future of natural gas?

As we saw in the post, Natural Gas distributor hedging risk, the future of the industry is uncertain and companies are looking into diversifying their offerings as well as the markets that they are in. Cash flow fluctuations have subsided as many electricity providers have shifted to burning natural gas as a way to generate electricity during summer months. However, prices of natural gas are still uncertain and legislation may be passed soon to decrease the harm that hydraulic fracturing reeks on the nearby water supplies. So, multiple natural gas distributors are using their expertise to expand into foreign markets, which BG Group has done successfully in India.

Not all natural companies have to explore foreign markets to find success. Some can find it here in the U.S. with a little help from legislators. That’s right; I’m talking about the Alaska natural gas pipeline project. The opportunity with the Alaska pipeline is low cost transport of natural gas from Alaska’s vast North Slope reserves. TransCanada and ExxonMobil are working together on one of the largest privately funded energy projects in the history of North America.

ExxonMobil may be making the right move, investing more into natural gas, because, as we saw in the subsidies post, President Obama has a plan to eliminate tax breaks for oil companies. Along with that, he plans to increase royalties from energy production by private companies on federal land. That, along with government mandates to decrease the amount of sulfur in gasoline, has oil companies nervous about their bottom line. Oil companies may have to pass on some of the costs to consumers.

If oil companies decide to increase the costs of gas to consumers to comply with government mandates while keeping their margins, switching to natural gas as a fuel source may become a more viable option for frequent or long-distance drivers. Currently, converting a vehicle to natural gas is not a preferable option for most consumers because of the high initial costs but many businesses (even Taxis in India) have switched their fleets to natural gas, and many more are converting their company vehicles as I write this.

It will be interesting to see what the future holds for the natural gas industry and how the public will respond.