What Increased Demand for Natural Gas Means for the Future of Energy

Jul 25, 2017 11:12:21 AM by NuEnergen

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On July 19th, Utility Dive published an article titled, “NARUC 2017: Are the Days of Cheap Natural Gas Numbered?" The article reports from annual meetings where electricity and utility industry experts weigh in on the future of energy in America. The focus is on the role natural gas has assumed in modern day America, and what to prepare for over the coming decades.

Low Cost - Low Carbon Footprint

Natural gas has been known for two things as it’s grown in popularity: low cost and low carbon footprint. Both those may change in the coming decades, according to experts at the National Association of Regulatory Utility Commissions (NARUC) meetings last week. Natural gas has dominated the energy sector for the better part of the past decade, overtaking coal as the top power-generator in America. At the same time it’s become the most utilized, natural gas has also contributed the greatest portion of carbon reductions in America to date. However, energy experts caution the natural gas boom will mean neither of those benefits will last.

 

Gas Demand and Production

Gas production has exceeded even the most aggressive predictions to this point, and projections for the next decades see moderate prices continuing. It is certainly poised to become the power source of the near future, but Andrew Weissman, founder of market research firm EBW Analytics, has reservations. He warns that conditions will soon be ripe for intense natural gas price spikes, because natural gas is volatile in ways other energy sources are not. Gas in general is expensive to store, and most of the facilities are in place to meet seasonal demand shifts. Because demand is often contingent on weather, local supplies are often not able to keep up – which means a price surge. Local distributors having to bid against national energy companies during times of scarcity would mean prices shoot up.

 

Natural gas has gone a long ways to mitigate the CO2 emissions that are so high with coal, but it’s important to remember gas still emits carbon, albeit on a smaller scale. As the demand for gas continues to rise, despite reductions in coal usage, emissions will also rise. Countries around the world who have pledged so slash carbon emissions by 2050 will inevitably run into problems.

 

Managing Risk

Implementing an energy risk management program can protect your company from the negative financial and operational impacts of exposure to the energy markets. By entrusting your energy risk management concerns to NuEnergen, you can effectively mitigate risk through customized recommendations based on quantifiable data. Successful programs apply forward-looking market analysis to your unique risk appetite. From Demand Response to Energy Sourcing and Carbon Footprint Analysis, our team of experts can formulate a custom energy plan that suits your organization.

 

 NuEnergen, LLC | Energy Management and Consulting | Phone: 866.977.0901 | www.NuEnergen.com 

 

Content Credit: www.utilitydive.com