Natural gas prices skyrockets, will wells and fracking follow?

Natural gas is burned off next to an oil well being drilled at a site near Tioga, North Dakota on August 23, 2011.

If you were to fly over the Bakken natural gas fields of North Dakota at night you would see huge spires of flame shooting out of the ground.

"It just looks like a bunch of flares going up into the night sky. It's quite dramatic," says Charles Ebinger, a senior fellow at the Brookings Institution.

Those flares are the result of natural gas being burned simply because we don't have the infrastructure to get that gas to market.

"So we have to invest literally millions of dollars in new pipeline infrastructure," says Ebinger.

The rise in natural gas prices provides incentive to hire the engineers and construction workers needed to build those pipelines.

"There's a range of natural gas producing opportunities and they are progressively unlocked as prices get higher," says Michael Levi, the author of the The Power Surge. He says the increase in production will be gradual.

Gas producers who capped their wells were waiting for the price of gas to rise. Now that natural gas is above $4, those wells are getting uncapped. And if prices stay high expect to see increase in new wells being fracked.

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David Weinberg is a general assignment reporter at Marketplace.
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The natural gas industry is overproducing their product so much so, they are forced to burn it because they don't have adequate storage or piping capacity. This is only one reason why we shouldn't trust these companies, they can't even manage their production in a manner that is not wasteful. In addition to being sinfully wasteful, this practice is also emitting harmful substances into the air.

President Obama recently stated that he wouldn't approve the Keystone pipeline if it can be proven that the pipeline through the United States would increase carbon dioxide emissions. Shouldn't we use that same barometer with the natural gas industry, and force them to stop hydrofracking and producing gas if they can't get it to market. Burning the gas at the wells is increasing carbon dioxide emissions.

Instead the debate gets framed around the need for more delivery pipelines for oil and gas, and the American people get brainwashed into thinking more pipelines are the solution.

The other serious question is, how can the price of natural gas be going up when there is a serious glut on the marketplace? If they are burning the gas at the production wells, there is surely an oversupply, and prices should be going down if it were truly supply and demand economics.

What the government should do is tax the gas companies for every cubic foot of natural gas that they burn because of overproduction. The money could then be used to fund the development of renewable energy projects and the construction of a smart grid to transport clean energy to the demand centers. This would increase jobs and increase renewable energy which does not emit carbon dioxide.

Renewable energy and electric vehicles will solve many of the nation's problems. It won't happen without a serious comittment from the American people. Why can't we try other ways of energy production? We need to keep asking that question. The answer is scary.

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