We must act now to protect our energy futureAugust 1, 2008
Elizabethtown Gas
Don Cater for Inside Business/Gateway Regional Chamber of Commerce, N.J.
Now that we have made it through the presidential primaries, our nation is about to embark on an intense debate over the issues that most affect Americans. I can not think of a single, more critical issue to our national security, our economy and our future than the issue of energy policy.
All energy prices are up. Oil and gasoline prices have doubled since last summer, with oil in excess of $130 a barrel and gasoline at more than $4 a gallon, the highest average in U.S. history. Natural gas is no different. The wholesale price of natural gas that producers charge -- that is the price we pay for the gas we deliver to customers without a mark-up -- has more than doubled since last summer. Elizabethtown Gas adjusts the fuel charge up or down depending on how much we are paying for natural gas.
So what can be done to combat these rising prices and secure our energy future? It will take a combination of tactics -- there is no silver bullet.
Governor Jon Corzine recently released the New Jersey Energy Master Plan, which calls for the reduction of energy consumption by at least 20 percent by the year 2020, and signed the Global Warming Response Act, which calls for reductions in the state's contribution to global warming.
The plan highlights conservation, energy efficiency and alternative energy sources as methods of achieving these goals. This is a giant step in the right direction for our state, but as a nation we still need more clean energy than currently exists and is readily available.
Today, our society recognizes the need to conserve our energy resources and limit our effect on the environment. We must continue the exploration and development of alternative and renewable energy sources. However, renewable energy is simply not ready to replace fossil fuels.
Meeting the nation's future electric generation demand will require the development of a wide range of clean generation options, starting with renewable sources, but also including advanced coal and nuclear. But these technologies will not come online overnight. Our energy has to come from somewhere while we convert to these options, and fossil fuels -- particularly clean-burning natural gas -- will remain in great demand. Most electric generation capacity built in the last decade, and projected to be built in the next decade is fueled by natural gas, which emits 45 percent less carbon dioxide (CO2) emissions than coal and 30 percent less than oil.
Residential demand is up as well. Despite the sharp price increases, natural gas is still the best energy value for home heating. With all energy costs on the rise, not only is natural gas the more environmentally responsible choice, it is a less expensive choice than oil, propane or electric heating. Homes that directly use natural gas for furnaces, hot water heaters and other appliances produce 40 percent less carbon dioxide emissions than homes using electric appliances. Its efficiency speaks for itself. Through the direct use of natural gas, ninety percent of what is produced is delivered as useful energy. This is compared to less than one third of the energy converted to electricity reaching customers.
Demand for natural gas is up sharply, yet production has struggled to keep pace. The U.S. has an abundance of natural gas, but there are relatively few areas open to production. As a result, the market price of natural gas reflects an extremely tight balance between supply and demand and will continue until we increase domestic production. Offshore drilling, while not popular in this state, must be considered for the good of the nation. Denying this access keeps the U.S. tied to oil and gas imports from volatile portions of the world.
Energy is the lifeblood of this state and our nation. It feeds our industries, keeps our families warm and allows us to enjoy the highest quality of life of any nation in the world. We must act now and look at all energy options that will decrease our dependence on foreign oil.
Don Carter is vice president and general manager of Elizabethtown Gas.