If you’re old enough to remember a utility worker yelling out “gasman” as he approached your home, you probably remember a time when energy was cheap and plentiful.
But then you also recall when most people had one car and not two or three, buses ran often and on time and most clothes dryers were gas powered, just like stoves. It was the advent of the self-cleaning oven in 1963 that sparked the growth of electric cooking.
But natural gas is about to make a comeback. Big time. I have a buddy who made some serious dough on gold and he sold when it hit $1,000. He told me this week he keeps waiting for natural gas to hit bottom and buy low. Right now, it’s at about $2 per million BTU. And it’s moving in the opposite direction of the price of oil, which has been consistently north of $100 per barrel.
Why? Because natural gas is a byproduct of oil drilling. The more oil companies drill for crude the more gas they find. Plus, natural gas producers have been exploring at a record pace as well. So, there’s an excessive supply of natural gas and deep reserves.
That’s great news for consumers, especially if you have a gas stove and gas dryer to go along with a gas furnace and water heater. Little wonder municipalities are buying fleets of buses powered by natural gas and industries that used gas-guzzling vehicles are converting to machines powered by compressed natural gas.
A couple months ago, T. Boone Pickens, the natural gas tycoon, boasted in an interview about some fifty waste management companies converting their fleets to run on compressed natural gas. Waste Management Inc. has 30,000 trucks and has purchased 1,400 units that burn gas so far. They plan to only purchase diesel engines for trucks where access to natural gas filling stations is limited. Each gas truck saves 8,000 gallons of diesel per year. The availability of natural gas service stations is growing.
Here’s more good news for America. The U.S. has an abundant supply of natural gas; far exceeding its oil reserves. And because gas is so inexpensive, this resource could conceivably make America the low-cost manufacturer again. Even though the cost of labor is higher here, industrial energy costs could soon be so low; the U.S. would be the choice for manufacturing requiring high-added value. So, you might make party hats in China but jet engines and sewing machines in the U.S.A.
America might start making natural gas refrigerators, too. I remember seeing a natural gas fridge many years ago. I was apartment hunting after college and one landlord had installed it because it was efficient. You can buy them now, and they’ll get more affordable as supply rises with demand. They will be very efficient to operate and more reliable than electricity. Seriously, when was the last time you heard about someone losing his or her gas service after a thunderstorm or in a blizzard. It doesn’t happen often, because the lines are underground.
But it seems like power companies are routinely restoring electricity and their customers are buying emergency supplies of ice or tossing out a fridge-full of spoiled food.
I’m sure you’re thinking, “If I can operate a natural gas fridge, why not a car?” Honda has you covered. You can order your 2012 Civic now.
Are you ready for this? The price of natural gas at the pump is about $2 less than petroleum. The Civic gets about 27 miles to the gallon in the city and 38 highway.
At current fuel prices it’s very frugal. Natural gas has got big truckers salivating.
Ford CEO, Alan Mulally reported this week that natural gas is the next alternative energy frontier for the carmaker. Why is it that a Japanese company has the technology ready to go in a mainstream consumer car and it’s the next big thing at the domestic automakers? GM, Ford and Chrysler have offered natural gas conversion kits and natural gas vehicles for fleet buyers, but nothing the average car owner can just walk up and buy for the family car.
Ironically, the U.S. is the Saudi Arabia of natural gas.
Maybe Saudi Arabia and all those companies that import their black gold to the United States have something to do with it.