Raw natural gas is extracted as a fossil fuel formed over millions of years in huge quantities from the remains of organic matter - ancient plants and animals. It has played a significant role in the energy mix of many countries worldwide and has been utilised for heating, cooking, electricity generation, for the production of chemicals, fertilisers and other industrial applications.
Despite its widespread use, the history of natural gas extraction has been marked by controversy and challenges. The extraction process of conventional natural gas or unconventional gas deposits (especially shale gas), known as fracking, has been criticised for its potential impact on the environment and human health because of a potent greenhouse gas - carbon dioxide - or use of hydrogen sulphide in drilling processes. Additionally, the fluctuating prices and geopolitical tensions associated with natural gas supply and demand have led to volatility in global markets.
However, despite these challenges, natural gas is expected to remain a critical component of the world's energy mix in the future. As governments and businesses increasingly prioritise reducing greenhouse gas emissions, natural gas is seen as a cleaner-burning alternative to coal and oil.
In addition to its use as a bridge fuel to a cleaner energy future, natural gas is also being developed for use in innovative applications, such as fuel for transportation and as a feedstock for the production of renewable fuels.
While the future of natural gas usage is promising, competition from renewable energy sources such as solar and wind power is growing, and regulatory pressure on carbon dioxide emissions from natural gas production and consumption is expected to increase. Additionally, some conventional natural gas deposits are associated with coal mining - now in decline.
Nonetheless, with the continued investment in technological innovation, the natural gas industry is expected to remain a significant player in the global energy market for decades to come. As the world transitions to a cleaner energy future, natural gas production will likely continue to play an essential role in the energy mix, providing a reliable source of energy and an interesting option for investors.
What is Natural Gas?
Conventional natural gas is one of highly versatile fossil fuels that finds multiple uses as an energy source and in the production of various goods. Natural gas forms from organic material under high pressure in rock formations under the earth's surface and it's a naturally occurring mixture. Comprising coalbed methane, ethane, propane, carbon dioxide and other hydrocarbons, this combustible gas is primarily obtained from natural gas deposits through deep hydraulic fracturing, vertical and horizontal drilling beneath the Earth's surface. Natural gas comes often in association with coal beds and deposits of crude oil.
This non-renewable resource is formed over millions of years through a complex process beginning with the remains of ancient flora and fauna that accumulate over time in sedimentary basins. As sediment builds up, it exerts pressure on the organic material, causing it to break down into hydrocarbons. These hydrocarbons migrate through rock layers and reach a suitable trap, where they can be extracted. Specific conditions, including the right temperature, pressure, and the presence of certain minerals, are necessary for natural gas formation.
Most natural gas extraction involves drilling wells into the Earth's surface and using various methods to extract the gas from huge high pressure quantities of underground deposits, often associated with coal mining activities. Once extracted, burning natural gas - thanks to intense heat - can be used for a variety of purposes such as heating homes and businesses, generating electricity, and powering vehicles.
While natural gas is a valuable resource, it is also a non-renewable fossil fuel that has significant environmental impacts, especially extraction at shale gas wells. The process of extracting and transportation of natural gas deposits can release greenhouse gases into the atmosphere, contributing to climate change and global warming. However, it is considered a relatively clean-burning fossil fuel producing fewer emissions than coal or oil. Additionally, technological advancements make it possible to capture and store carbon emissions from natural gas, reducing its impact on the environment.
Liquefied natural gas, also known as NATGAS, plays a crucial role in our energy sector and system. Its formation is a complex and fascinating process that has taken millions of years to complete. Although there are environmental concerns related to its use, it is an attractive alternative to other fossil fuels because of its low emissions. As we move towards a more sustainable future, it is essential to explore new ways to minimise the impact of natural gas extraction on the environment.
Natural gas has been known since centuries, but its commercial use is relatively young. It has taken hundreds of years to find enough natural gas deposits and to become an effective energy source, although the history of its use dates back to ancient times.
Around 1000 BC in ancient Greece, the Delphian oracle was built on Mount Parnassus at a site that proved to be a source of natural gas. Around 500 BC the Chinese began using "pipelines" made of bamboo to transport the gas that came to the surface. The Chinese used it to boil sea water to make drinkable water.
Naturally occurring natural fossil gas was discovered and identified in North America in 1626, when French explorers found natives who were lighting gases around Lake Erie. It is likely they discovered that lightning strikes ignited the gas rising from the ground.
However, the very first use of first commercialised natural gas occurred 160 years later, in Great Britain. Around 1785, the British used natural gas extracted as coalbed methane from coal to light streets and households. 30 years later, Baltimore, Maryland, became the first city in the United States to produce natural gas to light its streets.
In 1821, William Hart drilled the first natural gas supply well, in upstate New York. Thus was founded the Fredonia Gas Light Company, which became America's first distribution company to produce enough natural gas extracted for commercial use.
For most of the 19th century, burning natural gas was used almost exclusively as a light source, but in 1885, Robert Bunsen's invention opened up its new uses for natural gas consumption. In the 20th century, efficient interstate pipelines to transfer gas reserves began to be built. Today, the U.S.A. - one of the biggest gas producers in the world - possesses more than 2,2 trillion cubic feet of natural gas produced and stored in the country.
Then the use of processed natural gas expanded to light houses and to include home gas stove cooking and heating. Natural gas also began to power appliances such as water heaters and furnaces, manufacturing and processing plants, and boilers to generate electricity.
Nowadays, natural gas production is one of the most important and basic sources of energy on Earth. The newest technology and the Internet provide an opportunity to trade on natural gas markets and make money in the energy commodity
The future of NATGAS and its importance
The conventional natural gas industry believes that it can make significant contributions to sustainable energy and decarbonisation, which will play a major role in addressing climate change due to carbon dioxide emissions. Natural gas production has the potential to complement renewable energy by providing backup power for when renewable sources are unavailable due to intermittency. Therefore, natural gas has a strong medium-to-long-term future as long as the gas industry embraces the energy transition. NATGAS has several advantages, including its flexibility in additional applications such as waste disposal, transportation, as feedstock for chemicals, fertilisers, and pharmaceutical products.
In the short term, the future for processed natural gas looks promising as coal is phased out and nuclear power may also be phased out in some cases. Mining companies also pay attention to alternative unconventional gas deposits - the shale gas or tight gas finds, which may play a more significant role in the future. However, beyond 2030, the future becomes less clear. As the cost of renewable energy, particularly solar and wind power, significantly decreases, the role of natural gas consumed as a primary fuel for power generation will face increasing pressure. On the other hand, mining companies estimate that natural gas reserves are expected to be the only fossil fuel to experience demand growth. That applies especially to the Asian market, where gas consumption is expected to rise until 2050.
Thus, gas investors may still find trading NATGAS an attractive commodity with investment potential, but it is crucial to monitor market developments in the upcoming years.
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