Economic Benefit of Fracking for Natural Gas

Natural gas cost less than alternative fuel sources. For example, while the price of gasoline has risen rapidly over the last year, the price of natural gas has fallen to the lowest level in a decade. The reason why natural gas prices are low has to do with increase production of hydraulic fracturing. Efforts are being made to use more natural gas.

Vehicles: For example, most fleet vehicles (buses) already use natural gas.  The market is limited to vehicles that can make it back to headquarter for refilling. Crystler announced a pickup truck that will run on both gasoline and natural gas.

Power Plants: The Environmental Protection Agency (E.P.A.) drafted a new rule that would limit carbon dioxide emissions from new power plants to 1,000 pounds per megawatt-hour, which will force new power plants to use alternative energy, like Shale gas. While some believe that the E.P.A is starting a war with the Coal industry – The E.P.A is simply  following a shift that is already unfolding, while decreasing the amount of greenhouse gases omitted into the air.

Natural gas prices are forecast to increase more than 50 percent, but still more cost efficient compared to oil. The price for oil is expected to stay the same over time.

The reason why oil prices are higher has to do with international influences. Oil is an efficient international market, in which the product moves around the globe in tankers that can be diverted from on destination to another. A sharp change in demand or supply in any region of the globe is likely to show up in prices everywhere – Natural gas is difficult to send to international market and will continue to be influenced by domestic supply and demand.


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