While attending the Utility Economic Development Association (UEDA) conference this month, I learned about the Shale Gas sector. Perhaps I am just a little slow to catch on, but I was stunned by the implications of abundant natural gas as a result of the development of this ubiquitous hydrocarbon resource. The impact it will have on our economy will be equivalent to the development of the automobile.
States around the country like Pennsylvania, Ohio, North Dakota, Louisiana and many more experiencing this oil-like boom are well aware of the immediate impact it has on them – the instant wealth that it has created for some, the demand for housing, the shortage of labor, and the far-reaching effect on other segments of their economy as labor is drawn away from some sectors toward the high wages of the energy sector.
It’s ironic that long-standing energy companies like Devon Energy are struggling to remain viable as the abundance of natural gas has brought a collapse of gas prices, therefore, pushing many companies into financial difficulty. Utility companies will be closing many coal-fired power plants and building natural gas fired power plants, reducing emissions and lowering the cost of power generation.
We have begun to see the construction of pipelines to transport the gas to population centers, and have also realized the possibility of reversing the flow in some pipelines to move the gas where it can be converted into plastics and other materials. Another irony is that natural gas along with other chemicals can produce lower cost ethanol.
How this abundance of energy will affect the alternative energy effort is yet to be determined. However, it is safe to say that consumers will follow the path of least resistance and move toward lower cost options. What will be the impact on the electric car industry or the advanced energy storage segment? No one knows yet, but it is likely to disrupt their development.
The ripples of this energy tsunami are just beginning to be felt. It will continue to impact us for years to come. To learn more, check out the UEDA presentations at http://www.utilityeda.com/Conferences.asp. Another good resource is http://www.gastechnology.org. Stay tuned for more adventures.