U.S. Natural Gas Supplies Continue To Grow

While oil and gasoline prices remain at the high end of the historical price range because of tight supplies, there is one energy source that appears to be growing. It's also located in the United States.

The production of U.S. natural gas, which many consumers use to heat their homes, increased by nearly five percent in 2010 over the preceding year, according to the U.S. Energy Information Administration (EIA).

Continuing a steady upward trend, U.S. natural gas production has risen by 20 percent over the last five years, the report shows.

One of the reasons natural gas is so plentiful is new technology that allows its extraction from shale, found in several eastern and Midwestern states. Several companies have recently stepped up their drilling efforts in Pennsylvania, Ohio, New York, North Dakota and Montana.

While rising gasoline prices have been blamed, in some quarters, for helping to slow the economic recovery, the increase in natural gas supplies has kept the price of that fuel relatively low. As a result, demand for the fuel is rising the EIA report shows.

Natural gas consumption rose last year, led by a seven percent increase in demand from power plants. Residential and commercial demand was up three percent.

The increase occurred with few, if any, government incentives or support. But private industry is pushing the fuel as a bigger player in America's energy mix.

Chesapeake Energy, earlier this year, announced plans to invest $1 billion to explore expanded uses of natural gas in the U.S., including its use as a motor fuel. One of the technologies said to be under study is a natural gas-based gasoline substitute that would sell for around $2 a gallon.