Times of Conflict or War Remind Us of the Importance of U.S. Natural Gas

There is little good to be said about war, even when the fight is one of good vs. evil. Lives lost, property, cities and infrastructures destroyed, and billions of dollars spent are among the tragic outcomes of war. Even when freedom and democracy ultimately triumph over tyranny and oppression, the cost of war is high for everyone involved.

Natural gas – key to American energy independence

For Americans, one positive aspect of the U.S.-Israeli war with Iran is the strong position in which Americans find themselves in regard to our energy independence. While gas pump prices are predictably seeing some spikes, the strong U.S. position in regard to natural gas should keep other energy prices relatively stable for most Americans.

As described in this space recently, despite the U.S. being technically energy independent – a net exporter – much of the oil produced by the U.S. is light oil produced from shale fracking. Most U.S. refineries are built to process heavier oil, much of which is imported. When a disruption in transportation occurs – such as imperiling the Straight of Hormuz in the Persian Gulf – oil prices will climb here, hopefully for only the short term.

But natural gas is a different story, at least for Americans. As the war with Iran escalated, the value of our natural gas became evident, as reflected by investors. Only a few days after the war began, Reuters reported:

U.S. natural gas futures climbed about 3% on Thursday on a bigger-than-expected storage withdrawal, forecasts for higher demand this week than previously expected, and soaring global energy prices… Even though the shutdown ‌of liquefied natural gas (LNG) export production in Qatar removed about 20% of global LNG supplies, prices in the U.S. have not reacted much because the country was already exporting all the LNG it could produce. So, no matter how high global gas prices go, the U.S. cannot export much more gas. U.S. gas is up about 6% so far this week versus 54% in Europe.

Trump administration policies unleashing the U.S. energy sector particularly pay off for Americans when imports are threatened or delayed. That’s true for no energy resource as much as natural gas, which is mostly insulated from global disruptions.

America need not fear disruptions overseas

By producing and utilizing our own natural gas supplies, the U.S. protects itself from disruptions happening overseas, whether due to transportation glitches, political upheaval or even war, whether the U.S. is directly involved in the conflict or not.

U.S. production of natural gas keeps prices stable. In fact, whether the product is gas or anything else, being self-reliant is always a positive. Anytime we have to rely on goods from other nations, we’re susceptible to price fluctuations due to circumstances beyond our control.

Production of natural gas within the U.S. is a major driver of jobs. According to the U.S. Department of Energy, nearly 700,000 people work directly in the natural gas sector in jobs ranging from extraction, pipelines and storage to gas-fired power generation. And when we consider indirect but related employment, more than 4 million jobs owe their existence to natural gas.

Natural gas production often occurs in rural regions of the U.S. providing benefits to local communities, towns, villages and school districts through lease income and tax revenues.

Natural gas for generating electricity

But one of the biggest benefits of natural gas is related to its role in producing electricity – a commodity that is growing in importance and consumption. The U.S. (and the world in general) is on the cusp of an artificial intelligence boom that will power us into the future. While governments are rightfully wrestling with regulating the AI industry, the related data centers that are by necessity coming online will require a tremendous amount of electricity to operate servers and cooling system.

Generating electricity with natural gas is a preferred method for most utility companies. It is much cleaner than other fossil fuels. Natural gas plants can come online more quickly and efficiently than other sources. Our domestic production makes natural gas cost-effective. And even entities that prefer “alternative” power such as wind and solar rely on natural gas to quickly stabilize grids when those sources experience disruptions or simply cannot meet demand.

Natural gas continues to be the largest source of electricity generation in the country. According to the U.S. Energy Information Administration, natural gas accounts for about 43% of electricity generation – far more than any other source. “Renewables” account for less than 23%, nuclear 18.2% and coal 15.2%.

Americans can and should be grateful

Despite political movements that find themselves in favor from time to time to phase out gas, oil and coal, Americans are fortunate that natural gas in particular has kept a firm foothold in the U.S.

Natural gas is abundant, increasingly clean, and comparatively low priced. Those benefits are always important – and never more so than at a time of international conflict or war.

This article was originally published at The Empowerment Alliance and is re-published here with permission.

This article was originally published by RealClearEnergy and made available via RealClearWire.