March 13, 2012 | Energy Policy, Sustainability + Energy
Most people in the wind industry would agree that there are two things impeding the growth of wind power in the United States right now: lack of long-term federal policy and artificially low natural gas prices. Try as we might, we can’t control either one. But there are three reasons to believe the era of record low natural gas prices may be coming to an end.
- Slate and Climate Progress ran stories recently debunking the claim that we are sitting on a 100-year supply of natural gas. Based on the U.S Energy Information Administration’s estimates of “proven reserves” it’s closer to 11 years, and this assumes we continue to use it at our current rate of consumption. What if we were to shift more of our transportation fleet over to natural gas? Or substitute natural gas for petroleum products in industrial processes?
- Investment is shifting away from natural gas to other forms of energy, such as shale oil. As flow these dollars, so do advancements in technology – advancements that have contributed to the glut of gas. What happens to the rate of extraction as dollars, expertise and resources leave natural gas for greener pastures? (No pun intended)
- The economy overall is showing signs of sustained life. Factory production rose in January and February and the unemployment rate sits at 8.3%.
For these and more, there’s reason to ask how long natural gas prices will stay below $0.03.
Perhaps T. Boone Pickens is the man to ask. He’s back on the air promoting the Pickens Plan. Wind and natural gas are complements when it comes to delivering low-cost, reliable power. Wind is the hedge against price volatility, while natural gas provides the grid flexibility.
Over the past two years, the rationale of this pairing has been much less obvious to energy buyers who’ve seen sustained, record-low natural gas prices. But if Pickens is back pushing his plan, perhaps he knows something we don't. It may be time to heed the wisdom of this pairing once again.