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Page added on February 24, 2012
Make no mistake about it: the American economy is in the throes of the longest, most protracted recovery since the Great Depression. But there is an industry offering a beacon of hope, and it could soon serve as the tipping point that gets America back to work: natural gas.
With the onset of new technologies to get to natural gas, this once-underappreciated commodity is now viewed as the key to weaning the U.S. from our heavy oil consumption and crucial to providing energy independence (in as little as 20 years, by some estimates).
As much as “energy independence” has a nice ring to it, even better is what it’s going to take to achieve it. Converting the country to natural gas will require lots of hard work — and lots of workers – which is exactly what the U.S. needs to pull it out of the unemployment doldrums.
The Case for Conversion
In 2011 the U.S. Energy Information Administration came out with their projections for fuel cost trends during the next 25 years. Consider these estimates, which show the cost for one gallon of petroleum-based fuels as opposed to a gallon-equivalent of natural gas fuels:
Source: U.S. Energy Information Administration, Annual Energy Outlook 2011.
Natural gas assumes 7.9 gallons per 1,000 cubic feet.
As you can see, the advantages of switching to natural gas are clear. So long as a gallon gas equivalent of natural gas costs significantly less than petroleum-based fuels, there will be growing demand for vehicles that run on natural gas.
The switch is already taking place, too: The first industry that’s taken the leap of faith on natural gas is trucking.
Westport Innovations (WPRT) designs engines that can run solely on natural gas. Lately, the company has announced a number of joint ventures, partnerships, and orders. The company already has a profitable joint venture with manufacturer Cummins (CMI). And that joint venture just won a contract from trucking giant Navistar (NAV).
While what’s happening at Westport, Cummins, and the like is a strong indication that the conversion to natural gas is speeding up significantly, these companies alone can’t employ enough Americans to accelerate a recovery.
The jobs — the big jobs that will put droves of Americans back to work — will be in infrastructure.
The next great build-out
Right now there are only 1,100 natural gas filling stations in the country. That’s less than 1% of the total number of fueling locations nationwide.
Clean Energy Fuels (CLNE) is currently putting enough natural gas stations on the interstate system to support the trucking industry. But it won’t be enough once it becomes clear to the broader public that the switchover to natural gas is a smart, cost-effective move.
Other industries will soon follow to keep up with demand. When that happens, construction will need to ramp up on a huge scale to start adding fueling stations throughout the country. That, in turn, will create a bevy of new jobs.
If you don’t think that sounds like enough to help jump-start our economy, consider these facts:
Obviously, this conversion won’t happen overnight. But where there are incentives to switch over to natural gas, developments have been accelerating.
Right now, the chronically unemployed and underemployed can use any good news they can get their hands on. The stars will soon be aligning for these folks, and that should be music to all of our ears.