Monday, May 09, 2011

Will the EPA Make Natural Gas More Expensive?

imageThe story of the tainted drinking water near the natural gas wells could mean higher prices.  $UNG  $CHK

Natural gas has been seen as America’s hope for a cleaner transportation fuel, in addition to its use for creating electricity and home uses.  America has plenty of untapped natural gas wells, and the process of fracking (injecting chemicals in the rocks) can produce even more.

But here come the environmentalists and the lawyers trying to make a buck filing environmental lawsuits.  (Neocon talking point alert!)

If I had to make a guess, this kind of activity will decrease the exploration and production of new natural gas sources, driving up the costs of existing resources.  (And maybe cause us to increase, or not decrease, the use of coal).

We just saw what happened to oil after the BP oil disaster and the restrictions on US off-shore drilling.  Oil prices and gasoline prices have sored.

Are we about to see the same in Natural Gas?

Disclosure:  Long CHK.


Hey, I don’t want methane coming out of my water faucet, either!  But this is one of those stories that resonates with folks, and can have legs.  Even if down the road studies reveal that there is very little risk associated with the process.

Just as nuclear power = China Syndrome and “blinky” from The Simpsons, natural gas could = fire shooting out of the water faucet.

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