The Benefits of Natural Gas

Natural gas is nifty stuff. It burns twice as clean as other fossil fuels, leaves no ash to be disposed of and is critical to many industrial processes.

It is used for everything from drying grain to distilling liquor. It also can fairly easily substitute for oil as a transportation fuel. Buses in big American cities increasingly run on it, as taxis in Australia have for years.

Its history is a tale of how markets work, how technology can broadside the best futurists, and how planners and politicians can get it wrong.

More important than the lessons of history is the fact that we appear now to have more natural gas than was ever predicted, and we can look forward to possibly hundreds of years of supply at present rates of use. And it could slay the foreign oil dragon, or at least maim the brute.

Trouble is, because of its tortured history, natural gas has often been put on the back burner.

When the first commercial oil well, the Drake, was sunk in western Pennsylvania in 1859, natural gas, or methane to give it its proper classification, was not on anyone’s mind except deep miners, for whom it was a lethal hazard. The Oil Age began without natural gas. When it was found in conjunction with oil, it was unceremoniously burned off: a process known as flaring.

In the United States, natural gas faced political problems as well as infrastructural problems. Natural gas production was regulated by the predecessor of the Federal Energy Regulatory Commission, the Federal Power Commission. It was bound by a legal ruling known as the Permian Basin Decision that kept the price of natural gas artificially low, discouraging new supplies and new infrastructure, such as processing plants and storage. This led to shortages and to a lack of confidence in the future of natural gas.

During the energy shortages of the 1970s, natural gas was discounted by the government and much of industry. Congress panicked and passed a piece of legislation called the Fuel Use Act, which forbade the use of natural gas for many things, including pilot lights in new kitchen stoves. Utilities were told not to even think of burning natural gas: It was too precious and there was too little of it.

Gas demand declined precipitously in the 1980s. And in 1987, the Fuel Use Act was repealed. Along with deregulation of gas, a gas boom resulted.

But it was technology that changed everything. New drilling techniques increased supply. New turbines, based on airplane engines, started to enter the electricity market. They were clean, easy to install, and reached high efficiencies of fuel-to-electricity conversion. Today, 30 percent of our generation comes from these “derivative” machines.

So successful was natural gas in the 1990s that new concerns about supply shook the industry; and the public was told that gas would have to be imported from the Middle East, especially from Qatar. Permission was sought to build dozens of liquefied natural gas terminals around the coastlines.

Now it looks as if natural gas is a fuel with an enormous resource base–thanks to technology. The technology in question is horizontal drilling. Imagine you sink a hole 2 miles into the earth and then send out horizontal roots in all directions from this vertical trunk. That, in essence, is horizontal drilling and it makes available trillions of cubic feet of natural gas trapped in close formation shale deep in the earth.

Ironically, or fittingly, this takes the energy story back to Pennsylvania where a vast shale field called the Marcellus is being developed and will write the next chapter of hydrocarbon energy. This is good because it is plentiful, it is here and it builds on extant pipeline infrastructure.

Of course, it makes investments in many “alternative” sources of energy, particularly ethanol from corn, look like very poor investments. Cars and trucks that run on natural gas are an appealing alternative to ethanol with less disruption of the food chain and stress on the farms. –For the Hearst-New York Times Syndicate