It is a given that the global economy needs as many forms of energy as can be generated using all of our natural resources. The focus in contemporary times is on a cleaner and more efficient source while maintaining or lower the costs associated with the particular fuel type. The movement away from coal and towards natural gas is currently in full flux as the inventories of natural gas are ever-increasing as a result of fracking technology.
It also means that natural gas can also be supplied at a reduced cost in most instances, or at least that was the concept when the new capacity for retrieving gas from the earth was introduced. Of course, as with every product of increased demand, the price of natural gas is currently on the rise, and it appears to be on an ever-increasing upward slide as well as demand. What this means for consumers is that public utility companies using gas now includes electricity and electricity manufacturers will be converting natural gas to liquid for generating their product. This will in turn ultimately increase the price of electricity per kilowatt hour.
Low Introductory Costs
The shift away from coal to the use of natural gas as an electric fuel source has been a slow one while LNG companies build inventories. Those inventories today are at historical highs with this production focus. However, the expenses incurred in the conversion process to liquid form are also beginning to increase with no signs of letting up. This means that electricity suppliers will be looking for ways to keep costs down for consumers however they can, including Edmonton electric rates. The initial marketing concept of lower prices is assuredly fading as manufacturing expenses increase, and Edmonton electric company officials are getting ahead of the curve for the benefit of their customers.
The cost savings being implemented for Edmonton customers may be a model for other electric providers to follow. For beginners, the company is offering one month of free electricity used in August of 2020. This is a bargain regardless of production costs, and could well encourage most customers to sign up for the plan. Everyone needs heat in the winter, especially in Canada. The price for electricity generated from LNG resources will be locked in for three years and also include a free maintenance system inspection for all who enter into the agreement.
Possible Investment Opportunities
What this perceived increase in production costs also means as a side benefit is fueling a potential investment opportunity for both individuals and companies looking to expand their portfolios in the near future. With market volatility what it is, every investor is looking for predictable upside and generally lowered risk for the downside of market direction. Energy sources have always been a sound investment, but the current market conditions could mean that even the novice investor may want to research the viability of adding natural gas to their holdings.
One thing is for certain in the transitioning from coal to liquified natural gas. It is a trend that will continue as more focus is applied to environmental concerns as fallout of using traditional natural resources for supplying electricity. This will affect every electricity consumer in the western hemisphere. Understanding the global economy is transitioning is important for everyone, and we all must adjust our thinking to some degree. And this is especially true with respect to new fuel sources for all necessary utilities.