Gas Price Increasing and Alternative Energy Sources

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Topic: Sciences
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The usage of gas in our everyday life is inevitable. Natural gas is one of the best alternatives to oil. It is also very much convenient for the environment. Natural gas is given the status of the cleanest of the fossil fuel (Eric & Smith 39).

The united states have an ample reserve of natural gas. Natural gas plays an important role in the development of the socio-economical condition of the country. Households and large-scale commercial industries largely depend upon natural gas. So any interruptions in the supply of natural gas can hamper the smooth flows of our daily life. The demand for natural gas is increasing rapidly.

Because of new houses and industries which run on natural gas are establishing day by day. This increasing demand for natural gas makes an imbalance between the supply and the demand process (Weissman par. 4). This imbalance keeps the prices of natural gas up.

Another vital reason for increasing the prices of natural gas is higher oil prices, which is demonstrated all over the world. Because of the increasing price of natural gas, households expenditure are becoming larger, and natural gas-operated industries are spending a huge amount of dollars on the supply of natural gas. So the production costs of the industries are increasing.

The higher price of natural gas is draining billions of dollars from the economy. The experts consider that the price of natural gas will also increase in the future because of fast-growing demand, instable oil price, and unpredictable economic conditions like inflations. So it is time to think about the alternatives sources of energy so that our production and daily life remain on the right track.

The alternatives source of energy can be the best solution for rapid energy demand. The sources of energy, which are considering as an alternative to gas, are solar power, wind power, and biomass or bio-fuel, etc. Sawyer pointed out that several reasons are related to the increasing prices of natural gas (p.8).

The interaction between the supply and the demand for natural gas and the price of oil are the main factors to enhance the price of gas. Other important factors are weak production, state policies, transmission and distribution cost, and influence of the weather.

We are using natural gas from the kitchen to electricity generation plants. Natural gas has made transportation cost cheap. So the use of natural gas is spreading over various areas. Few of them are mentioned below:

Households are the main user of natural gas. The demand for natural gas in the household sector is increasing day by day. “Throughout the 1970s and ’80s, electricity was the preferred space heating source for newly constructed single-family homes.

In 1979, for example, 51% of new homes were heated with electricity as opposed to only 39% with N.G. Over the past decade. However, N.G. has clearly become the fuel of choice in 70% of new homes with electricity dropping to 27%” (Clemente).

Various large-scale industries are operated through natural gas. The pharmaceutical industry requires natural gas to run its operation. The fertilizer producing industries are also running on natural gas (Wenzel par. 1). So there is a huge demand for natural gas in the field of industry.

In America, electricity is generated from three sources, such as coal, nuclear power, and gas. “Demand for electricity has steadily increased over the past half-century, and that growth has accelerated over the last 15 years. In 1991, for example, the U.S. consumed about 2,762 billion kilowatt-hours (kwh) of electricity.

By 2004 demand reached 3,550 billion or an increase of 29%. Coal provided half of this electricity, nuclear 20% and N.G. 17 %” (Clemente). The application of natural gas in the production of electricity is increasing rapidly. New electricity generation plants are establishing based on gas.

The number of gas-based cars, trucks, and buses are increasing every year. This type of car, trucks, and buses are good for the environment compared to oil-based ones. Because gas-based engine produces less quantity of toxic gas. Natural gas also reduces the cost of transportation, because it is cheaper than other fuel. So people prefer to use natural gas. For this reason, the demand for natural gas in the area of transportation is increasing.

The natural gas, which is consumed by the citizen of the USA, comes from three sources, such as domestic gas production (82%), imported from Canada (15%), and imported from LDC (3%). But the supply of gas is not stable; because wells are depleting and production is decreasing. Another reason is that – Canada is facing some internal problems to export gas.

Therefore, it is essential to keep the balance between supply and demand for natural gas to maintain a stable price of gas. If the demand becomes higher than the supply, the price of gas will go up. So, additional demand is one of the reasons behind the higher gas price.

The increasing oil price is another crucial reason for the increasing price of natural gas. “Some large-volume customers (primarily industrial consumers and electricity generators) can switch between natural gas and other fuels, such as petroleum products, depending on the prices of each.

As a result of this interrelation between fuel markets, when oil prices rise, the competitive pressure to maintain low gas prices diminishes, and the shift in demand to natural gas drives prices upward. Crude oil prices have increased to as much as $69.91 per barrel in trading during August 2005.” (EIA Brochure).

Fuel markets, i.e., coal, gas, and oil market, are interrelated to one another. While the price of oil becomes higher than the consumer increases the use of gas as a compliment of oil. Nowadays, the oil price is becoming higher because of its worldwide demand. The oil market also does not remain stable due to several reasons like production disruption, political instability, and bad weather. So higher oil prices also cause higher gas prices.

Natural Resource Defence Council points out that “[t]he United States consumed 22.42 trillion cubic feet (TCF) of natural gas in 2004, to satisfy the needs of manufacturing, electric generators, residential customers and commercial consumers”.

The increasing gas price has a great impact on social life as well as economic life. Nowadays, we are using various kinds of natural gas-driven devices, which make our life comfortable. Higher gas prices will force us to avoid this type of device. Several impacts of gas price areas-

The continuously increasing trend of gas price is one of the reasons for high living costs. People use gas driven air cooler system in summer, and gas drove air heater in winter. So a family has to spend more dollars than before on maintaining this type of system for increasing the gas price.

Pharmaceutical and agricultural products will be costly because of the increasing price of gas.

Electricity production will be hampered due to the increasing gas price.

Natural gas or other fossil fuel such as oil and coal will not be able to meet the future demand of the fuel. Alternative energy sources should be found out to cope with the additional demand for fuel. An alternative source of energy are sources that are not derived from fossil fuel alternative energy does not harm the environment and does not consume natural resources. So we can say that alternative energy is a non-tradition source of energy.

Because of higher oil and gas prices, people are now concentrating on alternative sources of energy. It is the only solution to reducing higher living costs.

Many vehicle companies are producing a special kind of vehicle that can be operated through alternative energy. This type of vehicle will be able to minimize the cost of transportation. Different businesses can use alternative energy like solar energy to operate the lighting and air conditioning system.

There are some alternative sources of energy. Some of them are described as follow:

Bio-fuel is one of the best alternatives to fossil fuel. The use of bio-fuel is increased all over the world. Biofuel industries are expanding in Europe, Asia, and in the USA (Tardieu and Schultz 28). Human has used biomass fuel for heating and cooking since the discovery of fire.

Crops such as grain, vegetable, oil, and sugar are the main component of bio-fuel. Bio-fuel resources are available in every country. It will reduce the emission of greenhouse gas, and it is cheaper to produce. Bio-fuel can be used to generate electricity. It is also able to operate vehicles. We can cook by using bio-fuel.

Solar energy can also be an alternative source of energy. We can easily obtain electricity from sunlight. There are several kinds of devices that are available in the market that can convert sunlight into electricity. We can use solar power for various purposes such as –

Space heating and space cooling system can be operated through the solar system (Lof). It can be used for lighting. Many solar energy-driven cars are available in the market. Solar energy can be used for cooking. The main advantage of solar energy is, it is cheaper and positive for the environment.

Fuel demand is increasing with the increase in population. Natural resources like oil gas are limited, and it will be exhausted in the course of time. So, an alternative source of energy can be the best solution for the future demand for fuel. If we are able to explore alternative renewable energy sources, it will reduce our dependence on natural gas.

References

Clemente, Frank. “The Problem with Natural Gas”. EnergyPulse. 2005.

EIA Brochure. “Residential Natural Gas Prices, Residential Natural Gas Prices: What Consumers Should Know”.

Eric R. & Smith, A. N. Energy, the Environment, and Public Opinion. Rowman & Littlefield 2002.

Lof, G. O. G. “Solar Space Heating with Air and Liquid Systems”. Philosophical Transactions of the Royal Society of London. Series A, Mathematical and Physical Sciences, Vol. 295, No. 1414 (Feb. 7, 1980), pp. 349-359.

Natural Resource Defence Council. “Managing America’s Latest Natural Gas Crisis”. Issues: Oil & Energy. September 2005.

Sawyer, John E. “Natural gas prices affect nitrogen fertilizer costs”. ICM (Integrated Crop Management). 2001. IC-486 (1). 2001.

Tardieu, Henri. and Schultz, Bart. “Draft Paper on 5th World Water Forum”. International Commission of Irrigation and Drainage (ICID). New Delhi, India, 2008.

Weissman, Andrew. “Natural Gas Supply, Demand and Pricing”. Thursday, 22 May 2003.

Wenzel, Wayne. “Fertilizer Rising: Manufacturers adapt to a changing market”. Firm Industry News. 1 Oct 2004.