What are the risks of investing in natural gas?
Investing in the oil and gas industry carries a number of significant risks. Three of those risks are commodity price volatility risk, cutting of dividend payments for those companies that pay them, and the possibility of an oil spill or another accident during the production of oil or natural gas.
Natural gas is used in power and heat generation, heavy and light industry, and transportation. This means that as long as the industry has energy needs and households from all over the world use gas for cooking and heating, investors can expect the demand for the commodity to remain high.
Gas plants emit nitrogen oxides which increase smog and can cause respiratory problems for people living nearby. Using gas appliances at home creates indoor air pollution and can lead to asthma in children. Gas plants are often the top emitters of nitrogen oxides in communities.
Pros are lower emissions, domestic availability of fuel, lower fuel costs. Cons are high upfront vehicle costs, lack of fueling infrastructure, lower range per tank, and non-renewable resource.
2023 Market Recap
By the end of the year, the commodity was down 43.8% — the most significant decline since 2006 — closing out at $2.514 on the New York Mercantile Exchange. Overall, the natural gas market witnessed a tumultuous 2023, marked by an overarching downturn in performance.
Gas is the cleanest-burning hydrocarbon, producing around half the carbon dioxide (CO2) and just one tenth of the air pollutants of coal when burnt to generate electricity. There is enormous potential to reduce near-term CO2 emissions and air pollution by using gas instead of coal.
Even though natural gas is easier to store and transport than other fossil fuels and renewables, it has one big storage disadvantage. Its volume happens to be four times as big as petrol's. Because of this, natural gas storage is much more expensive since more storage space is needed.
Natural gas is a colorless, odorless, non-toxic gas. A chemical odorant, similar to the smell of rotten eggs, is added to natural gas as a safety measure so that any gas escape can be detected and corrected by the local distribution companies/utility districts/ multiple-owned systems in your area.
Natural gas has a flammability range of approximately 5 to 15 percent. That means that any mixture containing less than 5 percent or greater than 15 percent natural gas to air would not support combustion. Natural gas, when mixed with air and exposed to an ignition source, is combustible.
World Gas Reserves
The world has proven reserves equivalent to 52.3 times its annual consumption. This means it has about 52 years of gas left (at current consumption levels and excluding unproven reserves).
What are 3 benefits of natural gas?
Whether produced via conventional or renewable methods, the advantages of natural gas as an alternative fuel include its domestic availability, established distribution network, relatively low cost, and emissions benefits.
You may think that one of these energy sources is safer than the other, but as long as your home energy infrastructure is properly installed and in good working order, both sources are safe.
Natural Gas is lighter than air, non-toxic and contains no poisonous ingredients. Breathing natural gas is not harmful as long as there is an adequate supply of air to breathe along with it.
Natural gas is odourless, colourless and flammable. It is non-toxic and lighter than air; utility companies add the smell of rotten eggs – a product called mercaptan – to make leaks easier to detect.
Natural gas is a fossil energy source that formed deep beneath the earth's surface. Natural gas contains many different compounds. The largest component of natural gas is methane, a compound with one carbon atom and four hydrogen atoms (CH4).
Much like Occidental Petroleum Corporation (NYSE:OXY), Exxon Mobil Corporation (NYSE:XOM), and ConocoPhillips (NYSE:COP), Baker Hughes Company (NASDAQ:BKR) ranks as one of the most profitable natural gas stocks to invest in.
Renewable natural gas (RNG) is a pipeline-quality gas that is fully interchangeable with conventional natural gas and thus can be used in natural gas vehicles. RNG is essentially biogas (the gaseous product of the decomposition of organic matter) that has been processed to purity standards.
Natural gas has long been billed as a good stepping stone for a world looking to replace coal with renewable energy. As solar arrays and wind farms are being built, the theory goes, natural gas can be a stand-in for “dirtier” fuels, like coal and, in some cases, oil.
Since the temperature is usually more moderate in late spring and early fall, fewer people rely on natural gas to heat and cool their homes during those times. Lower usage is a factor in causing market prices to drop, making the shoulder months typically the best time to lock in natural gas rates.
The natural gas system's physical characteristics provide stability to the energy system. With an underground, looped infrastructure, pipelines are shielded from many major disruptive events.
Which is better natural gas or gasoline?
Natural gas is also more fuel-efficient than gasoline. It contains fewer hydrocarbons, and it has an octane rating of 130, which helps increase engine combustion and efficiency. It can be used in two forms in a natural gas engine: Compressed Natural Gas (CNG) or Liquefied Natural Gas (LNG).
Natural gas prices are affected by market supply and demand
Increases in natural gas supply generally result in lower natural gas prices, and decreases in supply tend to lead to higher prices. Increases in demand generally lead to higher prices, and decreases in demand tend to lead to lower prices.
DO leave the home, building, or area of the suspected leak. Get to a safe area as quickly as possible. After leaving your home, DO call the 24-hour emergency number for Peoples at 1-800-400-4271, or call your local emergency response number. DO call 911 to notify police and fire officials.
Natural gas leaks are rare but can occur in a variety of places, so it is important to be aware of the signs. Because natural gas is colorless and odorless, Unitil adds a harmless, non-toxic chemical that makes it easier to detect a gas leak before it can create a hazardous situation.
Natural gas is much lighter than air so when it is released into the air it rises quickly and dissipates outside. The mercaptan is heavier though so it can often sink and hang closer to the surface. This difference is important to why under certain weather conditions you might smell gas.
