Natural gas accounts for nearly a quarter of the country’s total energy supply, and higher prices could eventually take a toll on the U.S. economy. The price has nearly doubled from a year ago.
Alan Greenspan: “Today’s natural gas markets have been a long time in coming, and futures prices suggest that we are not apt to return to periods of relative abundance and low prices anytime soon.”
Alan Greenspan: “If we stay at these very elevated prices, we’re going to see some erosion in a number of macroeconomic variables.”
Louisiana Republican Billy Tauzin blames the federal government for promoting the use of natural gas as a relatively clean burning fuel while, at the same time, limiting domestic exploration.
Billy Tauzin: “On the one hand, the federal government encourages the use of natural gas for a whole host of processes. On the other hand, the federal government restricts more and more public land for natural gas development. The federal government is in the not so invisible hand on the marketplace increasing demand and all the while decreasing supply. Talk about market manipulation!”
Colorado democrat Dianna DeGette disputes that argument efforts to protect federal lands are not to blame for holding gas development hostage. “While we need to develop our natural gas supplies in the west, that does not necessarily mean 100% development in all lands and if we have a reasonable land-use policy, we can still have robust natural gas development.
The other possibility is importing natural gas, but it is very expensive to transport natural gas across the ocean, and importing our energy sources from foreign lands causes two other problems: it sucks money out of the United States into other parts of the world, and it makes the United States more dependent on foreign sources of energy. Neither of these two problems, as far as I can tell, is worse than doing nothing at all.
One thing that would be nice in theory is if energy consumption were reduced. People could tolerate the eighty degree weather in the summer and the forty degree weather in the winter (Farenheit), and only use air conditioning when the temperature exceeded these bounds. Industry could invest in more energy efficient equipment and such, but if this is the goal, we don’t need to do anything at all. We just let the market force these decisions on the people. No one will heat his house if he cannot pay the bill for it.
I think Representative DeGette is wrong to say that environmental considerations haven’t caused part of this problem. The only reason we have to pass laws to protect the environment is that doing so does cause short-term problems. This is not to say that the laws ought not be passed; just that we should admit that there’s a cost as well as a benefit.
Finding alternatives to natural gas is also an option. I would like to see the government put aside a few billion dollars for contests in developing clean and efficient energy production. Contests are nice, because you only have to pay if you get results and you don’t produce industries that require constant government subsidies just to keep them afloat.
Does anyone have any thoughts on this exciting topic  |
