Natural gas is traditionally used to heat many houses in the United States, mostly concentrated in the northeastern section of this nation. However, this spring, natural gas demand in the United States (and actually throughout the world) is at an all-time high. The short-term implications of this are very significant and could improve the American economy.
Natural gas is becoming increasingly popular, both in the long-term and the short-term. This spring, as natural gas has been in very high demand due to cold spring weather, the cost of natural gas has been rising, and on March 30, 2011, alone, the price of gas futures increased by an impressive 2.2 percent (www.businessweek.com). But natural gas economic viability is growing on the long-term as well. A study conducted by the Massachusetts Institute of Technology predicts that by 2050 natural gas will double its share of the energy market, from 20% to 40% (www.mit.edu). Thus, natural gas will see great potential in both the near and distant future.
The economic implications of this increase in demand is profound. Clean-energy stocks were bolstered by the rise in natural gas (www.msn.com). Naturally when there is more demand of a product prices go up, and higher prices mean higher profits. Ergo, locally based corporations, such as EQT and Consol Energy, will profit from this March demand. Senior AP Economics whiz kid (and winner of the Pittsburgh Economics Challenge) Vijay Venkatesh proclaimed that “the increased demand for natural gas, in conjunction with laws conducive to corporate growth, will cause these companies to have strong growth in the near future. They will be leading our country’s economy as we are recovering from the recession.”
America has innate abilities in the natural gas industry as well. The United States increased its natural gas production by 3.7% in of 2009 and made itself the world’s largest producer of natural gas, over Russia and Canada, while Russian production went down by 12% (www.seekingalpha.com). Specifically, with America’s Marcellus Shale Formation right in Pittsburgh’s backyard and with strong natural gas reserves in places ranging from Arkansas to Oklahoma to Alaska, the U.S. has a strong future with natural gas.
Finally, natural gas is becoming more popular for use in automobiles, through the form of compressed natural gas (CNG). CNG-based vehicles, particularly trucks, are becoming very popular in America and are already widespread in India, where compressed natural gas is by far the most popular fuel for autorickshaws there.
Economics genius and Academic WorldQuest national qualifier Pranav Krishnan, a senior, said “I think that natural gas while certainly a superior alternative won’t work by itself. It should be used in conjunction with hybrid car markets. More hybrid cars should be made and they will [be made] if you introduce natural gas.”
Despite Krishnan’s thinly veiled skepticism, even he prognosticated the future of CNGs with hybrid cars, which is a rapidly expanding sector considering the upcoming releases of the Chevrolet Volt and the Nissan Leaf. But overall, natural gas is seeing a return which is leading to greater demand in America and actually throughout the globe which in turn is proving to be the impetus for economic success in the United States of America.