Natural Gas Revolution?
Natural gas revolution, perhaps, is real, but it will take more to make it a real revolution. There is no doubt that shale development has made a major leap in gas supplies. However, energy is just a means to an end. In order to make this a real revolution, we need to see ingenuity in using natural gas. With the largest spread between natural gas and oil we should start seeing advancements in gas to liquids. I have done much in this area and have failed to come across something transforming in this field.
You can have all the energy you need and more, but if you don’t use it in a productive fashion you will end up like a third world producer of energy for others to exploit. As a domestic policy focusing on finding and developing energy is valid, but in the end, it is how you plan to use it. We need energy because it brings value to society by enhancing our way of life from keeping us warm in the winter to allowing us to read at night.
So much debate is focused on the industry on how many jobs it can create. Who really cares? Why would one want an economy built on the means not the ends? The less we can require of our means the greater the value of the ends become. The notion of a grand green economy to the massive employment of natural gas or coal is quite unproductive for the long run. Jobs in a sector which only enables you the option to live better cannot deliver much value as in the sector that actually implements better living. Natural gas has an opportunity for electrification, chemicals, petroleum products, goods manufacturing, heating, etc… Focus is needed on how we use natural gas.
Currently natural gas is still being flared around the world including the US. In Iraq alone they are flaring quite bit – http://blogs.platts.com/2013/06/17/iraq-flare/?sf429145=1. For a country who is lacking consistent electricity it would make sense to build up the infrastructure to transport and use the gas for electrification. Ingenuity in developing a means to manage stranded gas and/or increasing the value of that gas is lacking. This will be a revolution as soon as we are able to reduce and/or eliminate flaring of natural gas. The fear is we found a way to find more natural gas, but in the end flare it off in search of the higher value liquids product.
A revolution requires more than a one-sided story. Perhaps the low price signal is the beginning in terms of the market place action. However, there is much needed on the domestic policy front. We need to stop focusing on policies aimed at boosting production and creating an economy from developing energy and start to focus on an economy on using the energy in a productive fashion. Then, and only then, will it be considered a revolution.
As you ponder the path of energy please do consider All Energy Consulting as potential partner. We do technology valuation to forecasting commodities.
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