The massive growth in the production of natural gas, the result of using unconventional sources and methods (mainly the fracking of shale deposits) continues to demonstrate how free markets can transform the world, even in the face of statist oppression.
Two recent Wall Street Journal pieces illustrate this anew. The first reports that another industry is now converting its vehicles from diesel to natural gas — an industry you might not think of offhand. Ferryboat fleets, both here and in Canada, are making the switch because of the continuing (shale-)rock-bottom prices of natural gas.
From Staten Island to Washington State and British Columbia, ferry fleets are following the lead of Norway, which a decade ago started fueling ferries with liquefied natural gas (LNG).
One attraction of natural gas is, again, its pricing. Natural gas at the Henry Hub distribution center (a standard benchmark for natural gas pricing) hit a low of $1.95 per million BTUs this year, the lowest price in 13 years. This, while diesel skyrocketed by 140% from 2004 to 2011.
A second attraction is that, if spilled, LNG doesn’t form a toxic slick that requires costly cleanup, even as it should be so unfortunate as to kill off wildlife, or tourists, or both.
Third, LNG is actually less likely to be unfortunate, because it is less inflammable than diesel.
Of course, the switch will take time and upfront investment — as for instance, to build plants to chill and compress the gas, and new holding tanks for the ships. But the cost savings make the decision obvious, even if the timing isn’t.
The second WSJ piece is of more — shall I say — global importance. It reports that more and more US utility plants are switching from dirty coal to clean natural gas, not because of EPA coercion, but because of the coercion of free-market pricing.
Coal consumption by American power companies dropped by 18.8% in the fourth quarter of last year, compared to the previous quarter, and 9.4% compared to the fourth quarter of the year before. Again, the switch was driven by the drop in natural gas prices.
Peabody Energy, one of the biggest coal producers in the world, now estimates that American coal demand will drop by 10% this year, or 100 million tons.
The free market is helping to reduce air pollution. Obama, are you paying attention?