Natural gas hike could mean boon for renewable energy sources

It hasn’t been a good couple of years for renewable energy sources such as wind and solar because of dirt cheap natural gas. As oil prices climbed, fracking and other methods to mine for natural gas became more financially acceptable and renewable construction sank.

Business runs by the simple principal of supply and demand. The supply of natural gas dramatically increased causing steep decline in price. This led to people calling natural gas the possible the successor to coal. Coal producers freaked, but it was also having an impact on renewable fuels as well.

Renewable energy, while it’s great for the environment, is basically only financially viable thanks to federal incentives. With natural gas as the new golden fuel, businesses stopped investing in wind farms and instead backed the more cost effective natural gas.

You couldn’t drive down an open highway without seeing people putting up wind farms five years ago, but new construction has stopped for the most part. Existing farms continue to plug away and create kilowatts of electricity, but they couldn’t compete with natural gas.  

The tide seems to be turning as natural gas prices have doubled as producers slow production in order to stabilize the industry. Analysts have been heeing and hawing for months that the gas boom couldn’t last for too much longer because it was simply bad for business.

The good news for consumers is the increases will likely be moderate and gone are the days of exorbitant natural gas prices, but the increase could put renewable energy back on the radar. Natural gas’ reputation has also been hit by environmental groups because of the fracking and other pollution minded methods of obtaining it.

Renewable energy is something that United States must embrace wholly and with the increase in natural gas prices, it once more can come to the forefront. Do I expect the renewable energy boon of the past? No. I expect more sensible and smaller farms being built to provide local electricity.

Photo courtesy of courtneyday.com.