Essay on Hydraulic Fracturing for Natural Gas

The development of the gas industry and low prices will definitely spur gas generation development. The formation of vertically integrated holding companies is quite possible (United States Congress House of Representatives, 2010). However, the development of gas generation requires additional infrastructure: either pipelines or power lines. An indirect effect of the gas industry has become the dimmed prospects for the development of industries of alternative energy sources production. Against the background of growing volumes of relatively cheap gas, solar and wind power look less attractive.


Perspectives for transportation

The transport sector is the most promising in terms of the transition from the use of imported oil to the domestic natural gas (United States Congress House of Representatives, 2010). Technologies enabling to convert standard vehicles to compressed gas-operated ones have long been used in many countries.

First of all, the most promising is considered to convert the fleet of trucks and buses to gas operation because of their centralized use and fewer weight limits (gas fuel tank weighs more and occupies much more space than gasoline one). Koerth-Baker (2012) estimates that the market share of gas-operated trucks and buses can grow from the current 1% by 3 percentage points per year along with the growth of updated fleet. DHL, UPS and other corporate users of large vehicle parks are gradually switching to natural gas.

Hypothetically, the analogue program “cash for clunkers” may well give impetus to the development of gas station networks and formation of mass demand of households for gas cars (United States Congress House of Representatives, 2010). The supply of new cars already exists. Since the beginning of the 2000’s, Honda has supplied gas version of the Civic model to the U.S. market, but so far the sales have been minimal, primarily due to an insufficient number of gas stations, but their number will grow (currently there are only about 1,000 gas stations) (Koerth-Baker, 2012). In March 2012, GM and Chrysler announced that they would produce gas-operated pickup trucks.

As in the case of alternative energy, gas boom has a negative impact on the industry of electric vehicles (Lewin et al., 2011). In connection with the discussion of the prospects for natural gas vehicles or vehicles on synthetic fuel, electric cars do not look so attractive anymore. However, as the final verdict is not yet pronounced, it is possible that electric cars will be a more efficient solution, and gas will affect their distribution through the distribution of natural gas power generation.



The global market for natural gas after the hydraulic fracturing revolution of the last decade is on the threshold of new structural changes. The U.S. market has the firsthand knowledge of what unconventional gas production is, in this case, the shale gas. As a result, gas prices have fallen to 10-year-old minimums, gas imports is shrinking, and poor infrastructure is the only thing that prevents the country from becoming an exporter. The infrastructure, however, will be built in the U.S. and Canada over the next five years, and the accession of North America will be one more step towards a complete globalization of the gas market.

The construction of the export structure and reorientation of demand from other energy sources to gas in terms of electric power generation and transport, and the development of industries using gas or gas condensate will lead to increase of demand, stabilization of world prices and increase of production in this and related fields. Natural gas reserves, the possibilities of extraction by hydraulic fracturing method, and low prices of natural gas in the U.S. creates favorable conditions for chemical companies and helps revitalize the U.S. manufacturing sector. In general, the discovery of shale gas reserves around the world is likely to result in the growth of gas consumption both as a source of energy and as a raw material available for a wide range of chemical products.

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