Why US natural gas prices are so low – Are changes needed?

US natural gas prices are at record lows–about where they were in 1976, and at the low points in the 1990s, in today’s dollars (Figure 1).

Figure 1. US wellhead natural gas prices based on EIA data, adjusted to January 2012 price levels using US CPI All Urban Price data.

There are several reasons why US natural gas prices are so low:

  • Our pricing system is based on short-term supply and demand, and storage facilities are limited. It is very easy for supply to overwhelm the system, and prices to drop very low in response, if there is a mismatch.
  • US demand for natural gas has been fairly flat for the last 10 years, regardless of price. Of the four major uses for natural gas ((1)residential heating, hot water, and cooking;  (2)commercial heating, hot water, and cooking; (3) industrial demand; and (4) electricity), only electrical use has been growing.
  • Supply does not drop very quickly, even if prices fall, because producers need to continue to extract natural gas in order to repay loans and to comply with use-it-or-lose-it lease terms.

Besides variability, there are a number of other problems with depending on short-term supply and demand for pricing:

  • Today’s prices appear to be far below the cost of production for some providers, leading to the likelihood of a shakeout.
  • Unless price levels are higher and more stable, it is not clear that natural gas supply will grow over the next 10 or 20 years, making long-term investment in new uses (for example, vehicular use, gas-to-liquids, and pipelines to underserved areas) questionable.
  • Natural gas prices in the US are much lower than prices elsewhere in the world (Figure 2, below). This means that there is likely to be strong demand for US exports of natural gas, most likely as Liquefied Natural Gas (LNG), competing with internal US uses.

Figure 2. Natural gas prices in the United States, Europe, and Japan, based on World Bank Commodity Price Data (pink sheet)

Ramping up natural gas production is now very much of interest, even if new sources of demand are not available, because

  • Oil prices are high and some believe that natural gas can act as a substitute, and
  • Natural gas seems to produce less CO2 than coal or oil.

It is not clear that the current natural gas pricing approach is up to handling this mismatch between supply and demand.  In many ways, natural gas is a drill-it-as-you-need-it product, and our current market free-for-all does not recognize this.

Perhaps we should be considering a different method of regulating natural gas, since in many ways natural gas is essential. It is needed for balancing wind and solar PV, and for allowing us to continue to continue to heat our homes and businesses with natural gas. In the early days of gas, gas was regulated to produce a reasonable rate of return for providers. Perhaps something closer to this approach needs to be used again today.

If price is regulated, the amount to be drilled would need to be regulated as well, probably on a month-to-month basis. Higher prices would probably be needed under the new system to provide funds for more storage and for maintenance of pipelines, and to assure that US needs could compete with demand for LNG from overseas markets. I am doubtful that such a method of regulation would be feasible or would be politically acceptable, however.

In this post, I will explain these issues further.

Why natural gas prices are so low?

I see four reasons why natural gas prices are so low:

1. Storage is too full. Our immediate problem now is that storage facilities are too full for this time of year, leaving little space for additional natural gas supply to be added during summer months. This year’s warm winter contributed to this over-supply of natural gas because the winter’s draw-down from storage was lower than expected.

Figure 3. March 22 figure by the US Energy Information Administration showing actual natural gas in storage (red) compared to expected range.

2. Little growth in historical uses. One of the underlying reasons why there is a mismatch between supply and demand is the fact that since 1997, US natural gas consumption has remained close to flat, regardless of price (Figure 4, below). With very low prices in 2011, consumption rose by 2.2% in 2011 compared to 2010.

Figure 4. US natural gas consumption by end use, based on EIA data.

Natural gas prices recently have been low enough to compete with coal prices. Even at these low price levels, there has been little increase in industrial demand, and no effect on residential and commercial usage (for heating of buildings, hot water, and cooking).

Industrial demand used to be the largest source of natural gas use, but this has been trending downward. Part of this downward trend is likely related to industries moving overseas for reasons related to wages. (Part may be related to spiking natural gas prices, as well.) Residential and commercial use has not been growing because furnaces have been becoming more efficient, and because more attention is being paid to insulation and other conservation measures.

Figure 5. US dry gas supply, divided between US produced and net imports.

3. Supply doesn’t drop quickly. Natural gas supply (Figure 5, above) does not drop very quickly when prices drop too low because long lead times and large investment is needed to bring supply on-line. Natural gas producers have debt to service and are often faced with “use it or lose it” leases, so are hesitant to stop, for fear of not being able to make use of their investment. A decline in price may be hedged, so the producer does not feel the effect as quickly as otherwise, and take appropriate action.

Profitability of individual wells is based on estimates of long-term future production and future costs–things which are not at all certain. Some small producers may not even be aware of how unprofitable current prices really are.

There is also the issue of large oil and gas companies having difficulty “replacing their oil reserves,” and needing natural gas reserves to substitute for oil reserves. These large oil companies are willing to buy natural gas companies, even if the cost would seem to be far too high, given recent prices. These willing buyers allow production to keep expanding, creating a greater over-supply situation before a shake-out occurs.

It might be noted that supply (Figure 5) is actually not rising very quickly, but given the slow rise in demand (2.2% in 2011), it is overwhelming the system. In 2011, US production of dry natural gas increased by 7.8% over 2010, but this increase is partly offset by an offset by a decrease in imports.  When net imports are included, US dry gas supply for 2011 is up by 3.9% over 2010. The low growth in natural gas demand in 2011, plus the warm winter extending into 2012, has been enough to produce very low natural gas prices.

4. New demand doesn’t ramp up quickly. It takes time to find investors for new uses for natural gas. As I will discuss in later sections, there also needs to be reasonable assurance that natural gas will be available for a fairly long period at an acceptable price level, before investors are willing to invest. With our current pricing system, I am not certain that these criteria are met.

Natural Gas Supply Depends on a Sufficiently High Long-Term Price

There has been a lot of discussion about how much shale gas supply will be available in the new few decades. What people seem to lose sight of is the fact that the amount that will be available depends on price. If the US can maintain a high price for natural gas (say, above $10 per thousand cubic feet (mcf)), then a fairly large amount of natural gas may be available. But if price remains in the low $2 mcf range, or is highly variable, a drop in natural gas supply seems likely, probably in the next year or two. Companies will either not want to invest, or will invest for export to foreign markets, where prices can be relied on. Drilling rigs are already being repurposed for oil production, rather than natural gas production.

Figure 6. Natural gas drilling rigs as percentage of oil and gas drilling rigs, based on EIA's compilation of Baker Hughes data.

Aubrey McClendon of Chesapeake Energy, a major shale gas producer, talks about trying to pull back as quickly as possible from unprofitable production, at current prices. Arthur Berman estimates that shale gas producers who are not able to subsidize natural gas production with profits from “liquids” need a price of $5 to $9 mcf to earn a minimum level of profitability.

Figure 7. Graphic published by EIA showing recent shale gas production.

Gas producers have natural gas reserves on their books, but these too, depend on the available price for natural gas. If the prices is too low, these resources may never be developed (especially if the gas is a stand-alone product, not produced with “liquids”).

Building New Sources of Demand Depends on Having a Stable Long Term Supply

There are several new sources of demand that could be added, such as natural gas vehicles, or gas-to-liquid plants, or pipelines to underserved parts of the country that now use oil for heating. Large investment of these types don’t make sense unless there is a reasonable likelihood that increased natural gas supply will be available for 20 or more years, and as we just noted, such a supply is not likely to be available unless natural gas prices rise and remain high.1 While there have been technology improvements, there is little evidence that they bring the cost of production down to today’s low prices for shale gas producers that do not have high “liquids” content in the mix they extract.

Of course, the flip side of the need for higher price for production is that demand for the new products will be lower with a high natural gas price. This is true both for new products, and existing uses, like electricity. The recent rise in the use of natural gas for electricity occurred in part because natural gas became competitive with coal pricing. If natural gas prices rise, electrical demand for natural gas is likely to stop rising, and may even fall.

Need for a Different Pricing/Supply Mechanism

Both producers and consumers have gotten the message that we have an energy problem, without a good understanding of what that energy problem is. Suppliers are working hard to ramp up natural gas supply. At the same time consumers and industrial users are trying to conserve.

Vaclav Smil in Energy Transitions: History, Requirements, Prospects talks about transitions from one fuel to another taking 30 to 50 years. We are trying to rush the process with natural gas and renewables, producing a partial transition in only a few years. It is hard to move a system at faster than its normal speed. Even a small mis-step with natural gas can lead to very low prices, and no place to put the new supply.

Besides temporary over-supply, temporary shortages can also be expected to become more common, if we try to rush the transition, and do not add adequate new storage. Natural gas is a system that has a lot of  month to month variability in demand, because it is used for heating and cooling. If the weather is unusually warm or cold, it is quite easy for the current system to run into outages. For example, Russia could not deliver enough natural gas for heating in Europe this winter; Texas had natural gas outages in cold weather in 2011. I wonder whether new natural gas vehicles will be added, and we will find that there are gaps in fuel for these vehicles, in some parts of the country, when the weather is unusually hot or cold.

I am not sure if any system of determining prices and supply will work very well, given the stresses we are placing on the system. The current system of determining prices on a short-term supply and demand basis produces a lot of fluctuations, and as I have shown, does not regulate the system well. I am raising the question of whether another system might work better because the stresses on the system would appear to be likely to get worse, not better, in the years ahead.

One possibility would be to go to more of a regulated natural gas system, where the amount drilled each month is set by a central authority, and prices are set based on a fair rate of return. I don’t know whether this is even feasible at this late stage, with ownership of different parts of the system so disaggregated, and cost levels varying greatly for different types of providers.

I suppose hidden in the back of my mind is a fear that the natural gas system (like the oil system) will start behaving so badly in terms of pricing and demand allocation that the government will decide to intervene. President Obama’s new Executive Order with respect to Natural Defense Resource Preparedness gives the Energy Department broad powers if problems arise that are deemed to create a national emergency. These powers would seem to include determining who gets what in terms of supply.

Trying to transition quickly from one energy system to another is untrod ground. I am not sure I have a good pricing solution. Perhaps someone else does.


(1) Having high natural gas prices is helpful in assuring long term natural gas production, but such prices are still not a guarantee of long-term production. There are many interactions with the rest of the system. For example, if there are high oil prices and high food prices, there may be civil unrest which disturbs natural gas production. Or imported parts, necessary for further drilling may not be available. Or there may be general financial problems, that prevent getting loans needed for further production. Or it may turn out that shale gas wells do not continue to produce as much gas as hoped, for as long as hoped, and the wells are no longer profitable, even at the higher prices.

67 thoughts on “Why US natural gas prices are so low – Are changes needed?

  1. You neglected to mention the primary reason why NG prices are low. Fewer people can afford to buy the product, and it is a highly discretionary one. Down in the lower 48, just about everyone can throw on a sweater and turn the heat down. As more homes are foreclosed on, that is fewer homes which consume NG for Heat, and fewer that use Electricity generated by NG.

    Both here and in the Eurozone, Oil and Refined product consumption of gasoline and diesel is cratering, at something like 5%/year. Relatively speaking, this energy consumption is more inelastic than NG, since the mobile culture depends on it. NG consumtion is a highly elastic commodity, and many people will simply not buy the product.

    NG is suffering from collapsing credit in in the Energy-Money Equilibrium. The effects are more apparent in NG than they are in Oil, because NG is not as systemically important to so many facets of the economy as Oil is. However, Oil will eventually succumb to the same pressures here resultant from collapsing demand.



    • I mentioned “other conservation efforts” which in some sense brought in the issue of turning the temperature down. You are right, I probably should have mentioned more specifically the issue of people really not being able to afford it, and the fact that all the empty foreclosed homes do not use homes. People who want to be green and people who cannot pay their bills, both turn the heat down. Another issue I didn’t mention is people switching from gas to electric appliances (clothes driers, hot water, and cooking), and apartments heating with electricity, because it is easier to meter (and probably to install).

      I didn’t have good information on the credit situation, and how it was affecting natural gas demand. It seems like expanding the use of natural gas vehicles would require a fair amount of credit, both for building the new vehicles and for building more refueling stations. There may also be a need to extend pipelines and add storage capacity. All of this would require credit.

      It seems like there is a big difference between a gas and a liquid used as fuel. Gaseous fuels require large diameter pipelines for transport and thick-walled tanks for storage–all of this for a product which sells for a relatively low price. This runs up costs, and the need for financing. It is not hard to see why liquids are more popular.

      • “It seems like expanding the use of natural gas vehicles would require a fair amount of credit, both for building the new vehicles and for building more refueling stations”-Gail

        No new vehicles need to be built for utilizing NG, gas engines are easily retrofitted for running on NG. The infrastructure of filling stations would need to be fit out with NG tanks, but the stations themselves are already there and unlike Electric, do not need massive High voltage wiring to be be put in place for rapid charging.

        The problem of converting to NG for transportation purposes is more one of energy density and the speed at which the resource would be consumed if in fact you did try to convert the entire fleet of gas powered vehicles to NG. Not to mention also that an crashes would tend to be a bit more, well, EXPLOSIVE. Rupturing a pressurized NG tank blows a whole lot faster than a ruptured gas tank does.

        Anyhow, NG can and likely will pick up some of the slack as liquid fossil fuels decline in avaialbility, but the energy density is such that any such conversion will rapidly deplete the NG resource itself. Basically, the transportation system is simply too energy consumptive, regardless of the energy source you are accessing. Nobody in their right mind would issue credit to develop this further, it simply cannot possibly pay off on the investment. Same as all industrial economics, it depends on a constant subsidy to exist at all. It cannot be sustained, and it will not be. The only question is for how long Goobermints will construct their economics around subsidizing such malinvestment. This could be a while longer, but it does seem the folks issuing the credit have grasped that the jig is up here, so probably not too much longer.


        • I think the key issue is that the vehicles are just too energy consumptive. It would be awfully hard to keep a balance between what little excess we have in a particular part of the country, and how many additional vehicles could be fueled with natural gas. A few city buses here and there might work, but as soon as the amounts start to get to be significant, we would start to run into supply problems, especially on cold days.

          • I have not seen a proper calculation of global NG consumption given a 100% transition of transportation (the only thing that matters) from oil to NG. Do you know of one?

            Given the relative BTU content of the molecular carbon chains, it should be a calculation that is possible, and hence an assessment of what growth in NG production would be required.

            • To do the calculation, a person would need to know what proportion of oil use is for transportation. In the US, transportation use is about 70.5% of US oil use, according to this chart. This consumption percentage is on a barrel basis, not a Btu basis, but let’s suppose they are the same. According to this chart, showing 2010 US consumption by source in quadrillion Btus, 24.644 “quads” of consumption came from natural gas, and 35.970 quads of consumption came from oil. To transfer transportation use to natural gas use, we would need to use and additional 25.38 “quads” of natural gas, show US consumption of natural gas would need to more than double. The US is a net importer of natural gas, and our imports have been trending downward, so the need for new natural gas production would be higher yet.

              Needless to say, there is the same issue with respect to using natural gas for electricity as well. It might be a reasonable issue to research further, and write a post on. Thanks!

          • Gail, if you’re going to perform the calculation, do not forget the LNG conversion energy loss of 30%. You need 1.3X the quad quantity coming out of the ground to achieve the quad level of energy in the fuel tank (because nat gas is used to power the refrigeration). And it does need to be LNG. The purpose is transportation and cumulative fuel tank refilling stops would take more time than travel time unless the fuel tank is LNG. And even with LNG the refilling stops are perhaps 5X what oil requires per unit distance traveled.

            I think the quad basis is a legit starting point, but rapidity of consumption in 400 horsepower truck engines for nat gas may require some additional factor. I am thinking specifically of John Deere combines and tractors on 10,000 acre fields. They can’t drive to the LNG station. They’d use all of it up getting back to the field.

            Maybe I should just do this calculation myself.

            • It might be good if you researched and wrote about this. My knowledge of LNG is not very good.

              One guess is that the conversion of all of the equipment now using gasoline/diesel to use LNG would be a real challenge. LNG is very cold and needs a lot of insulation. What would this do to cargo/trunk capacity of trucks/cars? Also, I would think it would boil off in a few days, if not used. If that happens, it seems like it would be terrible for global warming? Could people keep such cars in their garages?

          • You must have missed a TOD discussion of a few days ago. Some guy from the industry showed up and actually quantitatively knew what he was talking about.

            1) Loss from storage and transport of hyper cold LNG is surprisingly low. Dewar flask technology is pretty good, I guess. The quote seems to be only 1-2%/day boil off while stored or transported. That’s quite good for hyper cold, but an overall legit point in that a typical driver in the US fills a gasoline tank and does not expect to refill after . . . what, 10 days? This would be a differential equation of 1-2% X 10 over 36.5 such periods/yr but with the 1-2% being of a diminishing tank content over those 10 days. I’d estimate overall additional 15% (splitting 1% and 2%) required by the customer per year from boil off. Global warming issues do not interest me. It’s probably also valid to apply the 1-2% loss more broadly than the individual car. The big tank at the convenience store is losing 1-2%/day, too, before a customer shows up.

            2) As for tank size, the reason it has to be LNG is unpressurized NG has 1/1000th the BTUs per unit volume as crude. That’s just reality for the chemistry of carbon chains. Pressurized NG, i.e., CNG, is still 1/4 lower. The Honda Civic is the best example. They pressurize the tank to 3600 psi. 1 Atmosphere is 14.7 psi. So they pump it up to 245X ambient pressure. That’s then 1/4th the energy content of gasoline per unit volume with some danger thrown in. That’s why the range of a Civic CNG is less than half that of a conventional Civic, even throwing away trunk volume to put a bigger, pressurized fuel tank there. CNG is just absurd.

            LNG has 60% of the BTUs per unit volume as gasoline. An LNG vehicle would get 60% of the range of a conventional vehicle with the same tank size. The LNG problem is, of course, 30% of the NG coming out of the ground is used to power refrigeration of the NG to create LNG at the plant. So the oil -> NG transition has to endure 40% chemistry loss (crude just has more oomph per unit volume vs LNG), then 30% loss in freezing it and the 1-2% boil off loss/day.

            Steep hill to climb. I’ll find some time to work on this and post a comment on it.

          • @Owen – you seem obsessed with the alleged uselessness of CNG. You should travel someplace where they are common. CNG’s aren’t just for delivery vans and taxis – regular folks use them all the time for personal use. Just not in the states.

            The range issue so bad. CNG cars still blow away electric cars for range. And many CNG rigs can flip in some fashion between gasoline and CNG.

            For trucks – the energy density by volume is less important. Trucks are big re:less, so adding doubling or tripling the volume of the tank doesn’t really change things very much. The bulk of the truck volume is still, by far, the payload, not the CNG tank.

    • In the northeast there certainly has been conversions from heating oil to either ground source or gas for those who can afford the conversion, sometimes even wood or pellet stoves. And for those who can afford none of this, to turn the oil heat way down.

      I have not heard this of gas users because the price has been going down, this very warm Winter/Spring has undoubtedly affected the gas prices due to much more limited use by even those who can afford it.

      I do believe this will change in the future as NG goes up in price.

      • Around here, people use gas to heat. My impression is that people who are watching their pennies turned the gas down in the 2006 -2007 timeframe, and haven’t really raised the thermostat (especially at night and when out of the house) since then. I doubt that there are many more turning it down. A few may even be backsliding, if they have noticed that costs are down.

    • I know I showed a chart similar to that in one of my earlier natural gas posts. Canada came to our rescue with some natural gas we could import, so the dip in consumption wasn’t as bad as the dip in production. Imports from Canada have been declining in recent years, which is part of the reason we needed shale gas to ramp up.

      But I would think our long history of not being able to get natural gas to ramp up would make lenders a little wary of jumping on the band wagon, without fairly good assurance that the new natural gas production really would be there.

  2. “Industrial demand used to be the largest source of natural gas use, but this has been trending downward. ”

    The US industrial production of natural gas in 2011 was the largest since 2004.

    The natural gas glut didn’t materialize until 2009. During the two years since then, industrial consumption of gas has been growing at roughly 5% a year.

    This looks like reasonable response to price signals to me. People in the commodity business don’t sneeze at 5% growth per year from their second largest customer base.

    • Perhaps that is a reasonable way of looking at it. It takes a while to respond to price changes. Industrial demand was headed down for a long time, and now is heading back up, from a lower base.

      • It will be interesting to look at those industrial numbers as time goes forward. I was quite impressed with the growth during an otherwise lackluster economy.

        In the meantime, the “gas glut” is probably at worst a mixed blessing for the American economy. Cheap electricity (which is inevitiable from a glut of the fuel for marginal electrical production) and cheap natural gas mean the overall energy bill for the American economy isn’t terribly high, even with expensive oil. I believe we’re seeing this in the consumer spending numbers – people have the money to buy iPads, even though their commute isn’t cheap.

        The Pickens Plan seems like a no-brainer at this point, especially if it was tweaked a bit to throw some more subsidies to wind. (Basically tax the frackers to pay for both windmills and gas infrastructure). I believe the D’s are holding that up more than the Rs. I’m guessing that if the D’s lose the Senate but Obama wins re-election, we might see the Pickens Plan actually emerge as one of the few areas of consensus between a D White House and an R Senate+House.

          • Yeah that “America better than Euro” post was good (albeit overly slanted to the downside, but that’s your schtick – it still had interesting info).

            I think you’re wayyy overly worried about this “cold day/hot day = nat gas blackout” thing. There are a ton of people with natural gas piped into their house, and the overwhelming majority of them have had 10X as many electrical blackouts as gas blackouts. It’s really a minor technical issue re: delivery and storage, not a “market failure” (i.e. not the same thing as the gasoline shortages of the 70s).

            I do think the Pickens Plan would blow through our natty gas reserves more quickly, as would LNG exports. However, creating jobs and saving customers money **right now** is probably more important than any long term resource plan. America doesn’t do resource planning more than 10 years out. We assume some new tech will come along every 10 years or so.

            Despite what you might think, shale energy really is a new tech – it would be prohibitively expensive without sophisticated computer models and controls. Those frack drill jobs don’t happen without a trailer full of nerds guiding the drill bit just so. Shale has a ten year run, minimum, ahead of it. So I think the US will blow through it fast for the next ten years, and hope/pray that some new energy tech comes up to save their bacon in 2020.

          • “as the oil thing doesn’t blow up too badly” – exactly! From an energy standpoint, the trick is to manage the oil to coal+gas transition for another 10 years or so (now that there appears to be enough gas). I am optimistic this will occur, since “oil to coal+gas” has been going on for 30 years, it can probably do it for another 10. If some better new energy tech or discovery doesn’t come along in 10 years, then there will be an ugly energy shortage … but that’s been true, more or less, since the dawn of the industrial age.

  3. Gail,
    You repeatedly state that you see a crash in the financial system as an almost inevitable outcome of the current crisis, in that when growth no longer is possible the massive debts cannot be serviced.
    What worries me far more than the price of natural gas or oil, and more even than the probable total loss of income I would suffer if such a crash would come about is this:
    The global agricultural system is massively interwoven with the financial system, and would to a large extent go down, or at least be severely affected if a financial meltdown were to occur.
    No money for seeds, fertilizer, diesel fuel, all the inputs that are needed for there to be a next harvest.
    In short: A meltdown of our financial system would not just be an inconvenience in terms of not being able to heat our houses or get around in our cars, but could quite possibly cause a culling of human life within a short time frame and of a scale that it is unbearable to contemplate.

    With your knowledge of how finance works, have you considered looking into the question of “food and the financial system”?

    • You are right about the financial system possibly putting an end to food.

      One issue is probably loss of credit needed to buy farm equipment, seeds, fuel, etc.

      Another issue is bad recession hitting, and price of oil and food dropping.Then there would be the possibility of farmers defaulting on loans on their property, etc.

      Another is the indirect impact of multiple bank failures. I would think the government (assuming it is still functional) would print new money, but the new money might not work for imported goods.

      If things get so messed up that electricity is a problem (perhaps because there is not a way to pay workers because the banking system is such a problem), then we would have truly major problems, not just with agriculture.

      I will have to think about your idea. Thanks for the suggestion!

      • I would just point out that the financial/food scenarios are relative to each other. Printing money in a country where seed, machinery, fertilizer, diesel fuel is also produced to export food is a lot less disruptive then a country (like Egypt) which has to import food (50% of its wheat for instance) and many of the those inputs.

        Whether those businesses can stay in business (in the US) that manufacture without financing or a much reduced food export business (because other’s can’t afford it), is an interesting question. I suspect Deere, and Monsanto can.

      • After a financial collapse real assets, such as agricultural land and other farming resources, like tractors and combines, will still exist. They will be used by someone to grow food. Perhaps they will be nationalized and leased back to the bankrupt original owner. The same goes for electricity generation. We need not immediately “starve in the dark” just because of a financial meltdown. What that meltdown will do is scramble all the ownership of real assets and vaporize all financial assets.

        It is also true that due to the likely collapse of the existing parts supply chain there will be a rapid reduction in production automation (including in the agricultural and electricity sectors). This is good, because there will be a huge pool of otherwise unemployed labor that might find meaningful work manually operating critical facilities as they de-automate, assuming that we can maintain functionality during rapid de-automation. If not, most people will indeed starve in the dark.

        • I agree that you are right, if we can keep up supply chains. We clearly need to be able to continue to buy oil products, and we clearly need to continue to pay workers. If these are disturbed, there is a problem. I see the issue of buying oil products from overseas to be a bigger issue than the issue of continuing to pay workers, but either could be an issue if, for example, the US government ceases to exist, and the United States breaks into smaller units, each of which need to establish their own financial systems and international trading agreements (some of which are with other US entities). This whole idea may seem odd, but look at Libya and the Former Soviet Union, and the current war in Syria. Stranger things have happened.

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  5. Although natural gas emits less CO2 than coal and can be helpful for integrating variable renewable sources like wind and photovoltaics into the grid, only large-scale deployment of carbon-free sources (renewables and nuclear) together with conservation, efficiency, and land use changes can make a significant dent against climate change. This is shown in a new study: http://news.nationalgeographic.com/news/energy/2012/03/120314-natural-gas-global-warming-study.

  6. Let’s see being one of those poor disabled people who due to health reasons need to keep quite wasrm; If I could switcgh to natural gas in my fifth wheel my energy prices woyuld go down markedly and I would not have to worry anywhere as much about keeping the power on and warm. I know ther planet has finite rsources but do worry what seems to an unintentional agenda that really hurts poor people. I would like someone to propose a way to get around this uh “little problem”.

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