Thinking about natural gas in the US

New sources of 'unconventional' gas, have been dragging down gas prices in North America. Today's Globe and Mail describes a huge field in BC which will not be tapped until prices improve somewhat. This is surely an opportunity to switch a large amount of North American power to a relatively low carbon source - particularly away from coal. In time, it would be great to get rid of all fossil fuels, but a powerful interim measure seems to be to get out of coal for power generation as quickly as possible, and substitute with gas.

If you want to read a strong case for gas being part of the energy/carbon mix, I recommend Peter Tertzakian's 'The End of Energy Obesity' which came out this summer. And as described in this book (p.222), 'in 2008, as if out of nowhere, US natural gas supplies started soaring ... the shift is towards 'unconventional gas'.'

From a consumer perspective, it will be interesting to see what happens to residential energy supplies. The distribution of natural gas to homes has an uneven regional distribution in Canada and the US (see chart above for the US, using data from our Environmental Choices study) - in contrast to England, where residential gas is quite uniformly distributed. Will gas supplies open up to more houses in regions like Florida?

One thing which Peter Tertzakian also talked about in his book was the 'asymmetric' nature of power consumption. He focused on the point that if you 'not use' 1 unit of power at home, it saves many times that unit if the energy is generated in the usual way - from a power station.

If the power is generated at home, through mCHP, this asymmetric ratio has the potential to be much reduced. Using gas as the original power source, the hydrogen fuel cell market is anticipated to grow rapidly (as we described in our press release of Dec 17, 2008). In the press release, we noted low investor confidence for companies such as Ceres Power and Ceramic Fuel Cells, but this has since rebounded considerably.