Gas Prices and Gas Volumes The Current Posture

Abstract

By 1990, the U.S. demand for gas could fall short of the supply by as much as 8 trillion cubic feet. Given proper governmental regulation, this supply could be met by importing liquefied natural gas or by gasifying coal, lignite and oil shade. Introduction Natural gas has become the single most important fuel produced in the U.S., and the use of it in other parts produced in the U.S., and the use of it in other parts of the world is increasing rapidly. This form of energy is the subject of far-reaching decisions in business, financial and governmental circles, and the continuation of its importance among fuels rests upon the supply available. Supply, in turn, resolves into a physical availability component (how much is there?) and a market incentive component (how much will users be allowed to pay?). It is the burden of this paper to show (1) that many people want - and will pay for - comfort in forms people want - and will pay for - comfort in forms that can be satisfied only by increasing quantities of gas; (2) that adequate supplies of gas can be made available to meet this demand from sources domestic and foreign, natural and synthetic; and, (3) that the major question as to satisfying these wants is whether the governmental authorities will break with those past practices that have produced today's impasse in past practices that have produced today's impasse in world affairs and foreign trade and, instead, follow policies that will permit the necessary formation of policies that will permit the necessary formation of capital and freedom of commerce. Demand All authorities agree that there is a substantially increasing demand for gas in the U. S. Estimates of future gas consumption are shown in Table 1, which shows gas use increasing at the compound rate of 2.8 to 4.2 percent/year between 1965 and 1985. The estimates are made by highly experienced people who have taken into account oil reasonably measurable influences. With few exceptions each estimate assumes a continuation of past trends in birth rates, increasing efficiency of utilization, growth in GNP and relative prices of competitive fuels, with an adjustment for the prices of competitive fuels, with an adjustment for the inroads of nuclear power. But it is also assumed that communism will be contained without war, that the rich nations will continue to grow richer relative to the poor nations, that waste disposal (including that of nuclear power plants) will not become a limitation, and that air pollution control will not materially affect gas usage. One can only pause and remember the estimates of future whale oil use that undoubtedly were being made in 1859 as Colonel Drake spudded his well in Pennsylvania, or estimates of gas for lighting use that were being made in New Jersey when the local gas company threatened Thomas Alva Edison about his delinquent bill an action in part responsible for the electric light bulb. JPT P. 563