Our Views: Natural gas rising sector

05 14, 2012 by The Advocate

When journalist Alexandra Marks set out to gauge the growth of the natural gas industry for a recent cover story in The Christian Science Monitor Weekly, she found ample evidence of the phenomenon here in Louisiana.

“No one disputes the prevalence of natural gas in America’s basement,” Marks tells readers. “For evidence look no further than an Erector Set of pipes and docks and storage tanks in the marshes of Sabine Pass, La., on the edge of the Gulf Coast. There, Houston-based company Cheniere Energy Inc., which opened the facility four years ago to import natural gas amid an impending shortage, is now spending billions to transform it into an export site.”

Louisiana has become a major source of that renewed domestic natural gas production. That trend promises to extend Louisiana’s traditional status as an energy corridor – a role that developed in large part because of the state’s involvement in the production of petroleum. As crude oil prices have risen, natural gas has become a more attractive energy alternative.

“Natural gas already plays a major role in the American economy,” Marks adds. “It’s the primary way more than half of Americans heat their homes and cook their food. It’s also used to generate one-third of the nation’s electricity and is a major component in the chemical and manufacturing industries. Almost daily, its footprint is expanding because of the sudden surfeit of supply and low prices.”

Marks points out the frequently discussed environmental concerns involving fracking, a technique for extracting natural gas from underground shale deposits. She also mentions the boom-and-bust cycle of the natural gas sector, a cautionary observation for those of us in Louisiana who have lived through the volatile ups and downs of petroleum production:

“Natural gas prices are notoriously volatile. The warm winter and generous supplies of natural gas from the current drilling boom have plunged prices to a 20-year low. That has made tapping the shale less profitable.”

Despite such fluctuations, rising global demand for energy seems destined to be a prevailing trend. That means a strong likelihood that Louisiana’s role in natural gas production will be an important one.

Even so, Louisiana residents should learn from history and not rely too heavily on a single sector to sustain and grow the state’s economy. Residents of Louisiana should also learn another lesson from the past, and recognize that environmental protection can’t be forfeited for the sake of profit.