Impact of Natural Gas Market Factors on Developing Resources

Abstract

Abstract Today's natural gas producer faces a marketplace that bears little resemblance to the one in place a few years ago. The traditional natural gas industry allowed little flexibility and innovation. Today, the natural gas producer has a cornucopia of new economic and marketing challenges before him. Awareness of the new marketing opportunities in the industry allows the gas producer to convert these challenges into opportunities. The potential of the gas industry has never been better. Natural gas is increasing its value as one of the nation's main energy sources. Energy consumption in the U. S. in 1988 was higher than ever before and will continue to rise as the world economy continues to expand. (FIGURE I –U.S. ENERGY CONSUMPTION) The importance of natural gas in supplying the country's energy needs will continue to grow also. The gas industry, a $3 0 billion a year business at the wellhead, and nearly $70 billion at the burner tip in 1988 will continue to increase in size and diversity. FIGURE II – TOTAL VALUE OF U.S. GAS INDUSTRY shows the value of natural gas operations in recent years at both the wellhead and burner tip. The natural gas industry will become more flexible in response to the evolving regulatory environment, and as gas garners an increasingly favorable image as the preferred fuel source. Natural gas’ appeal in comparison to other fuels, lies in its domestic abundance, its efficiency as a fuel, and its good environmental record – an issue that will likely increase in importance during the 1990s.