As the demand for energy is expected to grow by double digits in the upcoming decades, the search for the right energy source to fulfill this demand has begun. The serious problems at the Japanese nuclear power plant have raised major concerns about the safety of nuclear energy and new exploration for oil has yet to resume in the Gulf of Mexico after last year’s massive oil spill. Coal has had similar bad luck as coal plants have been used more cautiously due to their contribution to global warming. With these three energy sources ruled out, natural gas is looking like a top candidate to fulfill future energy demands.
Recently, natural gas has overcome two of its biggest challenges: volatile prices and supply uncertainties. The United States and countries abroad have made important discoveries, significantly increasing their natural gas reserves. This accounts for the relatively low natural gas prices the last two years and the new reserves will help stabilize natural gas prices in the future. The new interest in natural gas can be already seen in the financial markets as the price of natural gas has risen by about 10 percent in Europe and the United States. Countries including China, Germany, Finland, and South Africa said they would review nuclear energy strategies for alternatives upon which natural gas becomes a very strong option.
Energy utility companies are also reconsidering natural gas as a potential source of stable power that is currently provided by coal and nuclear energy. Building nuclear power plants has proven to be very expensive while the Environmental Protection Agency requires costly investments to reduce carbon emissions from coal-powered plants. This leaves utilities with major incentives to switch to natural gas as a primary energy source. Analysts expect natural gas consumption to increase in the years to come.
The immediate market for natural gas will most likely be Japan as it looks to raise its fuel imports after losing a fifth of its nuclear power capacity. Countries rich with natural gas resources like Qatar, Russia, and Iran are looking to capitalize on the demand for natural gas. Russia is planning to develop huge natural gas fields in the Arctic while projects are beginning in other countries to allow easy shipment of natural gas through freezing and compression. These developments are not only designed to satisfy the natural gas demand but more importantly the global energy demand.
Given the safety concerns of nuclear power and restrictions on carbon emitting sources, natural gas will become increasingly important as a major energy source. As the need for energy increases, natural gas is proving to be a strong option for many countries to consider.