Yes, natural gas offers an affordable source of energy. According to an IHS study, 800 trillion cubic feet of natural gas can be developed for around $3 per cubic foot, and America consumed 27.5 trillion cubic feet of natural gas in 2016. When you do the math, it’s clear that natural gas is a cost effective solution to America’s demand for energy.
Why is Natural Gas Affordable?
Affordability goes hand in hand with the fact that natural gas is abundant in America. As mentioned, the amount of natural gas used by America in 2016 amounts to 27.5 trillion cubic feet, yet an additional 800 trillion cubic feet is available at roughly the same price point. And, another 1,400 trillion cubic feet of natural gas is available at just a reasonable price point.
Extraction > Production > Savings
Advancements in natural gas extraction methods have resulted in an abundant supply of natural gas. Technology has increased production efficiency through both hydraulic fracturing (also commonly referred to as fracking) and directional/horizontal drilling. Improved production methods reduce costs, allowing producers to produce more natural gas and oil.
Assuming that technological advancements within the industry continue over the next decade with access to additional resources, the estimated total end-use consumer cost of natural gas and electricity in the year 2030 is expected to drop from $654.8 billion to $588.9 billion. This 10.1% price decrease accounts for a savings $65.9 billion, nationally. Per household, this reflects a savings of $464.
By the year 2040, end-use consumer costs of natural gas and electricity are estimated to drop 14.5%, or $100.6 billion. Per household, this reflects a significant savings of $655 per household.