As natural gas prices rise, utility companies have started to explore alternative energy options.
The biggest players in the market include Dominion Energy, which announced plans to build a natural gas storage facility in Kentucky that would store gas in a giant tank, and Chesapeake Energy, a major natural gas producer that’s expanding its natural gas production capacity.
Other companies are exploring the use of methane, a gas that can be used to produce electricity, or methane-extracted oil, which could be used in fracking.
And even some small companies have tried their hand at drilling wells.
But natural gas has been slow to catch on in the United States, where the federal government’s natural gas market was created in 2009 and requires a license to drill.
The new rules are expected to encourage the use in the U.S. of natural gas as a renewable source of energy, even if some utilities are still hesitant to embrace it.
Some have expressed skepticism about natural gas for domestic use, arguing that it’s too expensive, particularly for new projects, and that its volatility could result in more carbon emissions than conventional fuels.
“The market is still very fragmented,” said Stephen Pomerantz, an analyst at market research firm The Energy Group.
“There are very few proven natural gas companies.”
Natural gas prices have soared as the United Kingdom, the Netherlands, Norway and other countries have boosted subsidies for electric vehicles, while prices in China have dropped, raising the possibility that Chinese demand could decline.
But as natural gas producers invest in new natural gas projects, the market is becoming more crowded, especially as new natural-gas wells are drilled.
Natural gas producers like Dominion have said that drilling for natural gas is an investment that should be done with caution, as it may lead to the production of volatile gas.
“It’s a very complicated area to understand and analyze,” said Matt Smith, a Dominion spokesman.
“We think that we’re well prepared for this type of development, but it’s not a sure bet.”