• Wednesday, May 22, 2024
businessday logo

BusinessDay

Natural Gas Will Power Economic Recovery

EU proposes gas as ‘green energy’ in boost to Nigeria’s reserves

Natural gas is a clean source of renewable energy in the United States. The country used 31 trillion cubic feet of natural gas last year, according to the U.S. Energy Information Administration. It formed 32 percent of the total primary energy consumption in the U.S. The country needs an affordable and reliable source of energy to revive its economy. In this article, we discuss how natural gas will power economic recovery in the U.S.

Economic Recovery in the United States

Many Americans have stayed indoors for many months due to the Coronavirus pandemic. But, they have started resuming their day-to-day activities including visiting barber shops, restaurants, and stores. This has caused an increase in demand for natural gas as people use it to fuel vehicles.

The energy sector in the United States is ready to survive the pandemic. Natural gas producers play a critical role in the North American economic recovery as they preserve the environment and benefit gas consumers. Natural gas has been resilient despite the recent setbacks that COVID-19 caused in the energy sector. Even so, the U.S. Energy Information Administration estimates that the consumption of natural gas will drop by less than 4 percent in 2020.

The shale energy boom in the country made natural gas a major source of electricity. Last year, the U.S. generated 38 percent of its power from natural gas. The demand for gas is expected to rebound by January thus making it a leading source of energy in the country in the future.

READ ALSO: Oil falls as frail demand outlook outweighs U.S. stock drawdown

The energy bills of many households have plummeted since the U.S. became a leading producer of gas worldwide. This year, reduced gas prices will increase the average disposable income of many families by $2,700 according to a report by HIS Markit. The income will increase to $3,500 by 2025.

Americans preserve the environment as they shift from using coal to natural gas. The country reduced the highest amount of energy-related CO2 emissions in 2019. It reduced these emissions by 1 gigaton from 2000 to 2019. The gradual increase of gas-fired plants will bring more environmental gains.

The energy renaissance of the United States is helping Europe cut down its carbon dioxide emissions. For example, Europe increased its natural gas consumption to produce power by 15 percent and reduced the use of coal by 20 percent in 2019. The global emissions of CO2 stagnated last year. Hydraulic fracturing has enabled many countries to increase their natural gas production.

Some economists believe that the ongoing economic slowdown has created an opportunity for North America to launch “green recovery.” the global economy is expected to recover next year due to the over $8 trillion economic stimulus that central banks have generated.

The United States has a huge influence on the global oil and gas industry due to its high proven reserves of natural gas. Gas producers in the nation need to prepare for market volatility in the industry by increasing the production of natural gas. Also, operators should focus on improving capital efficiency and workflow to boost the economy. They need to use machine learning and artificial intelligence to improve their commercial performance.