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Natural Gas: The Industry That Could Save America

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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:

Natural Gas
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.

Natural GasThe 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:

  • About 40% of jobs lost during the recession came from a contraction in construction — 2 million directly from construction workers being out of work, and 1.6 million due to those unemployed workers cutting back on spending.
  • Even if the natural gas station build-out equates to just 33% of the total number of standard gas stations in America, roughly 39,000 stations would need to be built, providing hundreds of thousands of new jobs to laborers, contractors, and sub-contractors. While 33% is a long way to go from where we are today, if the natural gas revolution gets traction, that’s where we’re headed.
  • This doesn’t even touch on the demand for labor from natural gas extractors that’s to be expected, or the possibilities of jobs created through the exportation of natural gas.

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.

 Daily Finance

14 Comments on "Natural Gas: The Industry That Could Save America"

  1. Beery on Fri, 24th Feb 2012 1:02 pm 

    Here we go again. Yeah sure, natural gas can save us, for another 5 years or so. Then, when the natural gas runs out, it’s back to the drawing board, because we’ll have wasted billions on building a load of useless natural gas infrastructure.

  2. sunweb on Fri, 24th Feb 2012 2:46 pm 

    Get A Job

    We are trapped. A friend of mine, very bright, knows engines backwards and forwards has gone to the fracking fields in North Dakota to work. He is around 30, has a family and was working a seasonal job. Now he is raking in the money. He told me one day they didn’t have anything for him, he sat in his truck all day and earned a lot of money.

    He needs a job. The way we live, we need fossil fuel energy. If we are polluting the water, polluting the air, upsetting the seismic situation , so be it. He needs a job and the way we live, we need fossil fuel energy. If he doesn’t do this work, there will be a flood of job loss repercussions locally and across the nation.

  3. Shawn Aune on Fri, 24th Feb 2012 4:07 pm 

    Moving to a Natural Gas economy is neither smart nor cost-effective but it will make some people a lot of money.

    This sounds like marketing, pure and simple.

    Sure enough. Article was written by dirty energy investor, Brian Stoffel.

    Seems he has some economic interest in seeing the Natural Gas industry take off.

  4. Alan Cecil on Fri, 24th Feb 2012 4:45 pm 

    Fracking everything in sight just to wrest out the last smidgen of natural gas is akin to the Eastern Islanders chopping down the last of the giant palm trees on their island, dooming their small civilization. Besides, natural gas does not follow the Hubbert Curve; when natural gas runs out in a field, it’s not a gentle slope down, it’s more like a cliff. And we’re Wile E. Coyote.

  5. Alan Cecil on Fri, 24th Feb 2012 4:45 pm 

    Easter Islanders, sorry. Haha…need to go frack me some more coffee.

  6. DC on Fri, 24th Feb 2012 5:12 pm 

    Wait a min, the Nat-gas that there is supposedly a huge glut of atm, and prices are well below production cost, even with all the standard sweet-heart subsdizes big-oil gets? Not the mention totally ingoring all the damage fraking does, which will in turn, impose even greater costs on a society that supposedly ill-afford any more costs?

    That nat-gas? thats the big savior? And what ye all gonna do there with nat-gas. Make CnG cars and rigs..hah! or maybe sell 50 million nat-gas bbq’s? and a spend a few bllion running lines to everyone so they enjoy there feedlot amerikan grade D sorta-meat?

  7. Kenz300 on Fri, 24th Feb 2012 6:53 pm 

    Oil has a monopoly on transportation fuels. That monopoly has to end and competition needs to be introduced. Bring on the electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles. None of these are a magic bullet but it is better to have some options and some competition.

  8. Ham on Fri, 24th Feb 2012 9:19 pm 

    Pie in the sky. Restructuring will take much
    oil and capital investment that is simply not
    there. The only solution is to get rid of wasteful
    private transport and to scale down on use.
    This is never discussed because politics and economics is obsessed by growth.

  9. cusano on Sat, 25th Feb 2012 12:19 am 

    Natural Gas will be most welcomed, but it’s only comparable to a bucket of water…and we need Lake Michigan.

  10. BillT on Sat, 25th Feb 2012 1:36 am 

    As other articles mentioned, the idea is to liquify it and ship it overseas for profit, just like we did the sweet Texas oil in the early 20th. We sold it at $2 per barrel. Now we are buying it at $112 per barrel and more. Smart Americans. Greed is killing us, not ‘terrorists’.

  11. Kenz300 on Sat, 25th Feb 2012 4:36 am 

    The trucking industry is starting to convert to LNG for fueling their long haul trucks. Even though the truck cost more to start they make it up in one years savings on fuel.

  12. MikeK on Sat, 25th Feb 2012 9:05 am 

    Hey, here’s a ridiculous idea. If you really want to create millions of jobs, why not retool cities so that they have efficient transportation networks instead of the massively wasteful systems in place now? How about building high-speed rail for long haul? That way, you could create millions of jobs, reduce spending but increase productivity, and completely eliminate dependence on foreign fuel. Then use the LNG to power these new systems, which one could assume would be far more amenable to burning such a fuel.

  13. Kenjamkov on Sat, 25th Feb 2012 9:45 am 

    I like the chart that has gas and diesel at $6 a gallon in 2035. Where I live it is over $4 a gallon and we just peaked. By 2035 I would say, if there is still a western civilization by 2035, gas would be hundreds of dollars a gallon, or 1 oz of gold, or 3 bear pelts, or 10 zombie skulls…

  14. BillT on Sat, 25th Feb 2012 12:46 pm 

    MikeK…that sounds good, but. The natural gas glut will burst soon. By the time those systems were built, natural gas will return to it’s high prices. All we would be doing is burning it up faster.

    By 2035, we will be rationing all energy sources, especially gas of both kinds…it it still exists. Think about it. China and India can convert to natural gas faster than we can. They don’t have 200 million gas vehicles on the road to replace over the next 10+ years. They can just make the new ones for natural gas. Even here in the Philippines, the taxis and jeepneys are switching to NG as well as the buses. But, the Philippines are about the size of Florida. Easy to switch. Not so, the US with Big Petro wanting to push oil to the last expensive drop.

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