To many people interested in issues such as the global economy, talking about the Natural Gas Boom is not that special anymore. What used to be something promising now is fizzling out. Why is that?
If you don’t know much about natural gas, it is important to understand its relevance to the global economy before reading this article. To say a word about it, a decade ago, natural gas was known as the fuel of the future. Last year, it played a major role in a remarkable year for energy. Global energy consumption rose at its fastest pace and natural gas accounted for 45% of the increase. This is how important the subject was.
Why is the Natural Gas Boom fizzling out?
The problem with natural gas is that its extraordinary growth rate is not sustainable. Over the next five years, the International Energy Agency expects gas demand to increase by 1.6% per year on average, marking a return to levels seen before 2017, when growth suddenly gained steam.
Besides that, we can expect a return to weather conditions that will keep the demand down. The rationale is simple: warmer weather, less demand for heat.
Diminishing opportunities also make it difficult to switch from coal to gas in electric power plants. That being the case, notice that the adoption of natural gas is the biggest contributor to the steady decline of coal-fired power in the U.S. energy mix. Fueling the Natural Gas Boom in the current situation might bother U.S. commercial partners like China.
Actually, many American cities are beginning to explore banning natural gas — or just banning it outright. Brookline, Massachusetts, recently became the first town in the region of New England to ban natural gas in new construction. We can also mention Berkeley, in California. The city outlawed natural gas in July and was the first US city to do so. Many other California cities followed suit and there are no reasons to expect that they will be the only ones.
Nowadays there is a growing understanding of the environmental damage that emissions and fracking do. People are even becoming more aware of pipeline safety as well.
All these factors have driven this push to ban gas at a local level. It is not a rule for every city in the United States yet, but it is certainly mining the Natural Gas Boom.