Substitutes For Natural Gas
There are a significant number of substitutes for natural gas that produce energy, but only a few of the substitutes are as efficient in producing energy and in reducing the pollution levels from hydrocarbon residues. The primary substitute product for natural gas is oil, which has been the staple energy source of the industrialized nations throughout the twentieth century. At the current time, it is the only energy source that is more widely used than natural gas. Other competing sources of energy are coal, nuclear power, hydropower and non-hydro renewable energy such as solar or wind power. The trend in both the industrialized and developing nations is to increasingly rely on natural gas as an energy substitute for oil. The way this trend impacts the types of energy used in an industrialized nation can be seen from the trend pattern over the past two decades in the United States.
The global demand for natural gas has increased at a faster rate, however, than the demand for other types of energy producing commodities with the exception of oil, which continues to be the major source of energy in the United States. The flattening in the rate of growth of coal is due to the use of substitutes in order to obtain environmental benefits. The continued growth rate in oil is due to the inability to obtain sufficient supplies of natural gas to meet demand. The flat growth rates of nuclear, hydropower and non-hydro renewable sources of energy is due to the public policy position that discourages expansion of nuclear capacity and the relative costs and low production output of hydropower and non-hydro renewable energy sources. This pattern of American energy consumption demonstrating a greater degree of reliance on natural gas is largely replicated in the other nations of the world.
Two of the key factors that affect the decision to use natural gas as a substitute for other energy producing commodities are price and availability. The price of natural gas, however, is driven by a large number of factors including speculation regarding future supply and demand. In addition, the costs associated with transportation of the natural gas to a specific destination can impact the decision regarding whether to use natural gas or another type of energy source.