Crowdsourced: Should the U.S. have a natural gas sovereign wealth fund?

August 8, 2013
What will more abundant natural gas mean for business and the economy? (Photo by Matthew Staver/Bloomberg)
What will more abundant natural gas mean for business and the economy? (Photo by Matthew Staver/Bloomberg)

In this month's Wonkblog Crowdsourced discussion of how cheaper natural gas will affect the U.S. economy and business, reader "imersion" has a provocative idea about some of the less obvious possible consequences of the more plentiful shale gas obtained through hydraulic fracturing. The ripples, "imersion" argues, will flow through to a range of industries, buying time for the solar industry and battery makers to get their technologies working better as home heating and autos rely more on natural gas for the time being. Could the U.S. make so much money from the stuff that the nation needs to find something to do with it, much as Norway does with its oil supplies? Well, that's a different question.

Here's "imersion":

World natural gas prices are around $11 or $12 while US natural gas is at 3.67 USD/MMBtu for Jun 2013. That is a whopping big difference and the biggest reason that many energy intensive industries are quickly re-establishing US branches (e.g. Lenovo computers). Exporters are rushing to begin to make hay but the overwhelming supply produced by fracking will make little dent into this price divergence. While fracking technology is applicable anywhere in the world, the rest of the world simply does not have the enormous drilling resources of the US to implement it, so again this divergence will converge only slowly, much more slowly than manufacturing in the US will ramp up. . . .

Electrical power plants will switch to lower pollution gas. This will give solar energy industry time to improve their technologies. Cars will use gas. This will give battery makers a breathing spell to improve batteries for rechargeable cars. Offsetting energy will drive oil prices down and permit oil to be used for more productive things like plastics, fertilizer, and stuff. Home heating systems will become predominantly gas driven, saving homeowners money they can use for other purposes, charging the economy. . . .

The soaring stock market will create pressures for a US Sovereign Fund based on natural gas (like Norway's sovereign oil fund) to share the wealth among all Americans.

Disagree? Agree? Either way, leave your analysis of the likely business and econoimc consequences of more plentiful natural gas here, or just go upvote those responses you find most compelling.

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UGC FROM ARTICLE: !!!

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UGC FROM ARTICLE: !!!

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Evan Soltas | August 8, 2013