Fracturing The Energy market

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Fracturing The Energy market

2-18. Which industries gain and which industries lose from the availability of cheap natural gas produced from shale deposits?

Industries that may gain from the availability of cheap natural gas from shale deposits include:

Energy-intensive Industries: Industries that heavily rely on natural gas as their primary fuel sources - such as manufacturing, petrochemicals, and fertilizers - could gain from reduced natural gas prices by way of reduced production costs; increased competitiveness can translate to greater profits overall for these sectors (International Energy Agency, 2018).

Transport: Natural gas offers immense promise in the transportation sector, specifically with vehicles powered by compressed natural gas (CNG) or liquid natural gas (LNG). According to Wang, Krupnick, & Walls, 2018). Lower gas prices make natural gas vehicles more affordable to consumers while fleet managers enjoy significant cost-cutting advantages from this fuel type

Power generation: Natural gas is often used as a source of fuel to generate electricity, and lower prices of this fossil fuel can mean lower electricity costs that benefit industries and individuals who rely on electricity for daily operations or daily life activities. This also leads to more reliable power generation because the industry can rely on cheap natural gas to produce power more sustainably.

Industries that may lose from the availability of cheap natural gas from shale deposits include:

Renewable Energy: Lower natural gas prices could decrease the economic competitiveness of renewable energy sources such as wind and solar power generation, making natural gas an economically more viable solution for electricity production and potentially leading to less investment and development in renewables. This may put an end to investments and developments within this sector (Sovacool & Brown, 2010).

Traditional fossil fuel industries: Businesses that rely on higher-priced natural gas production or exportation may face reduced revenues and profitability from increased competition from cheap shale...