Is Natural Gas Primed to Become the U.S.'s Primary Energy?

America’s reliance on imported oil leads The International Business Times to ponder the implications of escalating tensions in the Middle East, especially in and around the Straits of Hormuz where the Iranian Navy has recently been threatening U.S. warships.

In an article posted earlier this week, reporter Joseph Lazzaro notes that possible sanctions against Iran being considered by the European Union will undoubtedly lead to higher prices for crude oil on a global basis.

A closure of the Straight of  Hormuz, through which about one-sixth of the world’s oil flows, would send prices to stratospheric levels. Oil hit an all-time high of $147.27 barrel in 2007, during the leveraging bubble.

Lazzaro points out that domestic natural gas offers significant strategic advantages for the U.S. versus imported oil. In addition, it is less than one-fifth the price, based on the amount of energy it delivers.

[M]ore recently, natural gas has added another advantage: it’s cheaper. Natural gas fell 6.5 cents to $2.99 per million BTUs (MMBtu) — again pushing below major psychological support at $3. There’s 5.8 MMBTUs in a barrel per oil. Hence, at $101.55 per barrel, oil is 5.85 times more expensive than natural gas, for the same amount of energy.

Read more HERE.