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Natural Gas is a vital component of the world's supply of energy. It is one of the cleanest, safest, and most useful of all energy sources. Despite its importance, however, there are many misconceptions about natural gas. For instance, the word 'gas' itself has a variety of different uses, and meanings. When we fuel our car, we put 'gas' in it. However, the gasoline that goes into your vehicle, while a fossil fuel itself, is very different from natural gas. The 'gas' in the common barbecue is actually propane, which, while closely associated and commonly found in natural gas, is not really natural gas itself. While commonly grouped in with other fossil fuels and sources of energy, there are many characteristics of natural gas that make it unique.
A Brief History of Regulation
In 1938, the U.S. government first regulated the natural gas industry. At the time, members of the government believed the natural gas industry to be a 'natural monopoly'. Because of the fear of possible abuses, such as charging unreasonably high prices, and given the rising importance of natural gas to all consumers, the Natural Gas Act was passed. This Act imposed regulations and restrictions on the price of natural gas to protect consumers. In the 1970's and 1980's, a number of gas shortages and price irregularities indicated that a regulated market was not best for consumers, or the natural gas industry. Into the 1980's and early 90's, the industry gradually moved towards deregulation, allowing for healthy competition and market based prices. These moves led to a strengthening of the natural gas market, lower prices for consumers and the discovery of more natural gas.
Today, the natural gas industry is regulated by the Federal Energy Regulatory Commission (FERC). While FERC does not deal exclusively with natural gas issues, it is the primary rule making body with respect to the minimal regulation of the natural gas industry.
Competition characterizes the natural gas industry as it is known today. The opening up of the industry, and the move away from strict regulation, has allowed for increased efficiency and technological improvements. Natural gas is now being obtained more efficiently, cheaply, and easily than ever before. However, the search for more natural gas to serve our ever growing demand requires new techniques and knowledge to obtain it from hard-to-reach places.
Today, the natural gas industry has existed in this country for over 100 years, and it continues to grow. Deregulation and the move toward cleaner burning fuels have created an enormous market for natural gas across the country. New technologies are continually developed that allow Americans to use natural gas in new and exciting ways. With all of the advantages of natural gas, it is no wonder it has become the fuel of choice in this country, and throughout the world.
How Much Natural Gas is there?
There is an abundance of natural gas in North America, but it is a non-renewable resource, the formation of which takes thousands and possibly millions of years. Therefore, understanding the availability of our supply of natural gas is important as we increase our use of this fossil fuel.
As natural gas is essentially irreplaceable (at least with current technology), it is important to have an idea of how much natural gas is left in the ground for us to use. However, this becomes complicated by the fact that no one really knows exactly how much natural gas exists until it is extracted. Measuring natural gas in the ground is no easy job, and it involves a great deal of inference and estimation. With new technologies, these estimates are becoming more and more reliable; however, they are still subject to revision.
A common misconception about natural gas is that we are running out, and quickly. However, this couldn't be further from the truth. Many people believe that price spikes, seen in the 1970's, and more recently in the winter of 2000, indicate that we are running out of natural gas. The two aforementioned periods of high prices were not caused by waning natural gas resources - rather, there were other forces at work in the marketplace. In fact, there is a vast amount of natural gas estimated to still be in the ground. In order to understand exactly what these estimates mean, and their importance, it is useful first to learn a bit of industry terminology for the different types of estimates.