Is Natural Gas Really the Next Big Thing? Part 6

A WCTA White Paper:  J. Thomas Ranken, Washington Clean Technology Alliance, July 2012.

Impact on the Northwest

Washington State produces no natural gas.  Yet business opportunities and jobs are growing for the suppliers of technology, products, and services to natural gas extraction companies.

  • WaterTectonics is an Everett-based company that specializes in water cleaning systems including electrocoagulation treatment, chemical treatment, and automated pH adjustment.  The company has seen significant growth in the treatment of flowback and produced water in natural gas extraction.
  • World CNG specializes in the aftermarket conversion of light- and medium-duty passenger and cargo vehicles to use compressed natural gas instead of conventional gasoline or diesel.
  • HotStart creates engine heating devices in markets including oil and gas.  Much of the company’s growth has been in delivering large pipeline pump engine heating solutions that significantly reduce wear and tear.

Conclusions

Is natural gas the next big thing?  There are few certainties in long-range economic forecasting, but it looks big.  The U.S. Energy Information Agency, in its International Energy Outlook 2011 predicted that natural gas would be, “the world’s fastest-growing fossil fuel.”[1]

Overall, this is an enormously positive development.  We can expect:

  • Benefits for the environment as the economy transitions to a cleaner source of energy.
  • Less global uncertainty as U.S. dependence on foreign sources of energy diminishes.
  • U.S. economic benefits as we transfer less wealth to foreign energy producers.

As noted, there are legitimate concerns:

  • Public health concerns to date have not been compelling enough to warrant severe changes in regulatory oversight.  Objective research about drinking water, earthquake, and waste water risks from the natural gas development should be a high priority.  Industry should realize the importance of public confidence and lead these research efforts.  Natural gas developers should adopt prudent, conservative, industry-wide practices to ensure that risks are minimal.  Regulators should be diligent in encouraging independent research and speedy, responsible reactions to new knowledge including oversight and monitoring.
  • The impact of the development of natural gas on renewables is troubling.  The potential for solar, wind, biofuels, and other forms of clean, renewable energy to have a significant and positive impact on our nation is high.  But it is an economic reality that these forms of energy must compete and win in the marketplace.

The American people have long supported research.  In the early 1990s, a federal commitment was made to enhance medical research by doubling the budget of the National Institutes of Health.  This was an effort supported by Presidents and Congresses led by both parties.  Today, the NIH budget is over $30 billion.

In contrast, the Department of Energy’s Office of Science budget is less than $5 billion.  Given the importance of this field, funding for basic research in energy should be significantly expanded.

“The U.S. government is crazy when it comes to funding for energy research and development, according to high-tech titan Bill Gates.  ‘It’s crazy how little we are funding this energy stuff,’ Gates today told an audience at a U.S. Department of Energy (DOE) conference near Washington, D.C. ‘Funding for energy [research] in the U.S. is underfunded by a factor of two.'”[2]

Ultimately, government funding policy is likely to have the most significant, positive, and long-term impact by funding the basic research that will supply the discoveries that lead to energy breakthroughs.

If natural gas can provide a bridge to this cleaner, more efficient energy future, it will indeed be a boon to the world.

 


[1] Op. Cit., International Energy Outlook 2011, p. 43.
[2] David Malakoff, “Bill Gates on Insanity and Energy R&D,” Science Insider, http://news.sciencemag.org/scienceinsider/2012/02/bill-gates-on-insanity-and-energy.html, 28 February 2012.

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