Date of Award
In the mid-2000’s hydraulic fracturing was a little-known technology that produced a mere 1% of total United States natural gas. With the introduction of horizontal drilling techniques and their widespread deployment, production grew rapidly. Today, natural gas produced through fracking accounts for more than a third of total supply. This rise in production has happened so quickly and unexpectedly such that the price of natural gas has crashed—with significant impact on electricity prices. The United States, now with an excess of natural gas, is building its export capacity while the electricity generation industry looks to investing in more natural gas-fired plants. The competitive fuel costs of natural gas have brought down electricity prices for all users and have made renewable energy sources uncompetitive. Much of future electricity capacity will go towards natural gas, creating a cycle of investment in fracking and continued natural gas usage. The switch to a cheap and abundant fuel source should keep electricity prices low for the foreseeable future, but makes natural gas a staple in the energy diet of the US, therefore making the economy highly vulnerable to fluctuations in natural gas prices. This also means that the US remains dependent on a fuel that produces a great deal of carbon emissions and whose extraction methods are damaging to the environment.
Oerth, Bradley, "The Shale Gale: The Effects of New Natural Gas Production on Electricity Generation Fuels and Prices" (2014). Senior Theses. 856.