How Purchasing Managers Can Control Costs by Switching to Natural Gas

How Purchasing Managers Can Control Costs by Switching to Natural Gas

How Purchasing Managers Can Control Costs by Switching to Natural Gas

Many companies are switching to natural gas. The reasons for this are numerous due to all the advantages of natural gas for commercial business organizations. The reasons are also easy to understand. With natural gas, cost savings can add up on a monthly, quarterly and annual basis. This article examines the benefits of converting to natural gas.

Should You Switch Your Facility’s Energy Source to Natural Gas?

Switching from one fuel type to another can be a confusing prospect for anyone unfamiliar with the differences between the options at hand. If, for example, you currently use electricity or foreign oil as the energy source at your facility and have done so for several years, you might have doubts about changing to another fuel type. So why switch to natural gas? It helps to understand the market situation and how it relates to competing options.

In the U.S., commercial natural gas suppliers have multiplied due to deregulation and the increased abundance of domestic sources. This abundance, combined with the influx of market players, has made natural gas a more affordable commodity. When the environmental benefits are taken into account, the natural gas advantages become more readily apparent.

If you are wondering whether you should switch to natural gas, you could easily find the answer if any of the following situations apply to your company:

1. Your Current Energy Source Is Expensive

The cost of energy can account for a sizable share of a company's overhead. If you are looking for ways to improve your company's bottom line, one of the most effective choices that you can make is to switch to natural gas. Over the course of a typical year, you could trim your company's energy costs by five figures. Natural gas costs less because most of it originates in the United States. natural gas does not have to be shipped into this country from overseas.

Natural Gas Costs Less

When you cut your energy costs, you can pass these savings down to consumers. At manufacturing plants, natural gas makes it less expensive to turn out products in vast quantities. The same holds true in assisted-living facilities, where natural gas makes it less expensive to heat rooms and hallways on a floor-by-floor basis.

2. You Want to Control Costs

Most companies are looking to control costs. When you consider the volatility of the international oil market, the most fiscally sound option would be domestic natural gas, the price of which is not vulnerable to political conditions in other parts of the world. With natural gas, there are many options available because numerous suppliers exist in today's market. If you do not like the rates and terms of one supplier, you can always opt for a competing natural gas suppliers.

By using natural gas, you can make your budget for future quarters with greater accuracy because the price is generally steadier when compared to other fuel types. Whether your main goal is to trim overhead or invest in expansion and development, both goals could be more realistic and easier to attain with natural gas as your energy alternative.

3. You Have a Bad Relationship With Your Current Energy Provider

If the terms are unfavorable with your current energy provider, one of the best options for your organization is to switch to natural gas. When it comes to terms and customer benefits, natural gas is the more favorable option on numerous fronts because the customers have more control. With other fuel and energy types, the choices are often limited, and customers are forced to cope with the unfair and often greedy policies of suppliers.

With natural gas, a different set of rules apply. As the domestic market thrives for natural gas, suppliers face growing amounts of competition, which compels every supplier to compete for the business of each customer with better deals and offers. When you switch to natural gas, you can generally set a pricing structure best suited to the budget of your organization. Additionally, you will get friendly assistance any time an issue arises with your service.

4. You Have More Options Since Deregulation Has Opened up Competition

In the past, natural gas options were narrow because there were few suppliers from which to choose. For organizations in the U.S., the prospects of natural gas seemed no better than the competing options, such as coal and electricity. After all, why switch to a less popular, less proven fuel like domestic natural gas when that option is more confining?

Today, the situation has reversed itself thanks to the deregulation of the U.S. natural gas sector. Without the bureaucratic red tape that once confined the market to a few monopolistic suppliers, an influx of smaller suppliers have stepped into the market to offer better services to businesses on a localized, personalized scale. The additional suppliers have made natural gas more readily available in the U.S., and have driven down the price of the fuel.

Natural Gas Deregulation

5. You Want a Cleaner and Friendlier Option for Both Workers and the Environment

In today's market, eco-friendliness is a major selling point for any company. Consumers demand environmental accountability from suppliers of products and services. For the organizations that do business with the public, it is now more critical than ever to engage in practices that help reduce emissions.

If you switch to natural gas, your company could significantly reduce its carbon footprint. As the public learns more about the environmental advantages of natural gas over other fuel types, customers are likelier to do business exclusively with the manufacturers and service providers who have made the switch.

For company personnel, natural gas can also create a healthier working environment. In a factory, for example, natural gas is far less toxic than other types of fossil fuel. Employees who come into frequent contact with natural gas are less likely to develop health problems as a result of their daily work conditions.

The Advantages of Natural Gas Energy

Like most organizations, the biggest goals among your company staff are likely to trim overhead, increase your bottom line and strengthen your image within the market that you serve. Whether you operate as a B2B or a B2C organization, the ultimate end-goal is to make money, and the most surefire way to guarantee that is to be in good standing with your market. By switching to natural gas, your organization could easily meet both goals.

The advantages of natural gas for commercial business operations are numerous. At facilities where energy costs are high, natural gas could make a huge difference in the amount of money that would need to be earmarked for this expense.

The benefits of converting to natural gas also extend into areas such as the health of workers and the respect of consumers. Simply put, natural gas results in lower emissions, which makes it the more environmentally sound energy option. These benefits positively affect workers and boost a company's appeal among the public at large.

The advantages of using natural gas can be summarized as follows:

1. Natural Gas Is Cost Effective

The primary advantage of switching to natural gas for energy is the relatively low costs involved. As one of America's most abundant fuel sources, natural gas is readily available as an energy alternative to businesses throughout the country. Organizations across the industrial, medical, residential, commercial and human-services sectors are switching to natural gas because it allows them to save money over other types of energy.

A major factor in the lowered pricing of natural gas has been deregulation, which has opened up the market to new competitors. Whereas before, a few mega-corporations monopolized the market, today various providers compete with different prices. Since there are more options to please customers, providers now must offer what the customers want. For the vast majority of organizations, that means reliable energy at prices that allow companies to trim overhead and pass the savings over to consumers.

2. Domestic Natural Gas Is Abundant

Switching to natural gas is made easy by its abundance here in the United States. The availability of domestically drilled gas has come about, in part, through improved drilling technology, which has allowed companies to isolate and extract natural gas from source locations that were unknown to the industry in decades past. During the first 10 months of 2018, domestic natural gas production was 11% higher than it had been the previous year while U.S. exports of natural gas exceeded imports.

For natural gas providers, an optimal extraction point is Marcellus Shale in Pennsylvania, which is expected to help keep prices on domestic natural gas at reasonable rates for several years to come.

The domestic availability of natural gas has allowed the U.S. fuel industry to rely less on products from the Middle East. This, in turn, has facilitated lower prices in two ways. For starters, domestic natural gas is less expensive because it does not have to be imported from overseas. More importantly, domestic natural gas is not vulnerable to political turmoil halfway around the world.

3. Natural Gas Is Clean-Burning

Numerous organizations favor natural gas because it is among the cleanest-burning types of fossil fuel. When you opt for natural gas, your building will emit fewer greenhouse gases and have a smaller carbon footprint. As such, many environmental advantages come with choosing natural gas over other types of fuel.

Natural Gas Is Clean-Burning

To understand the clean-burning quality of natural gas, consider the difference between gas and coal. In Centralia, Pa., a fire has been burning underground for more than 55 years. The reason why this fire has burned for so long is that the town is situated on one of the most concentrated natural coal supplies in the world. The noxious fumes emitted from this fire have rendered this once-thriving area a virtual ghost town.

With natural gas, noxious fumes are never a factor because of the clean-burning properties of the fuel. When you consider the American public's eco-conscience of recent years, any organization can raise its esteem in the eyes of consumers by switching to natural gas.

What to Look for in a Natural Gas Vendor

Once you are sold on the benefits of converting to natural gas, you must examine the service features of each prospective vendor. With whichever vendor you choose, the service should be dependable, fairly priced and available around the clock. Keep the following factors in mind when you speak with vendor representatives:

Natural Gas Vendors

1. Reliability

When it comes to choosing one natural gas vendor over another, your first concern should be the reliability of the service being offered. Will the provider offer you fuel supplies in necessary quantities when you need them, or will the deliveries be inconsistent?

One way to find out is to read reviews on a prospective natural gas vendor. If the reviews are glowing and the majority of businesses are happy with the vendor's services, chances are the vendor is equipped to handle the B2B demands in question. Ask yourself which features of the service are most important to your facility. If a specific theme within the reviews raises any red flags, compare and contrast the vendor with the nearest competition.

2. Fair Pricing

Another factor to consider is whether you can rely on the vendor to be consistent with pricing. Will the vendor commit to uniform rates for the length of a contract or will the price change at whim according to fluctuations in the market? As you read about an offer from a natural gas vendor, make sure that the offer specifically states whether the rates for a given service package are fixed or subject to change during the course of the contract.

The best vendors that offer natural gas provide multiple pricing options so that each business can tailor a plan that works most conveniently with its own budget.

3. 24/7 Service

Another important feature from a natural gas vendor is round-the-clock service, 365 days a year. Energy is the most vital resource for any facility, and you must be assured access to your service provider at any time, day or night. As good as a service might be, there is no telling when something might occur that will require the help of vendor technicians or delivery people. Make sure that the vendor you choose offers 24/7 service and has someone you can call for help at any time.

4. Ability to Build a Relationship to Understand Your Facility’s Needs

Another essential quality from any service vendor is the ability to communicate with customers. When you first discuss terms with representatives from a prospective natural gas provider, pay attention to how they present the services in question. Do they ask questions with concern for your needs as a customer, or are they simply eager to promote their service and lock you into a contract? The right vendor will put your needs first.

Shipley Energy Can Help You Improve Your Bottom Line

Shipley Energy offers commercial natural gas services that feature year-round savings, predictable pricing and simplicity. We offer multiple pricing options so you can make the best choice for your business.

Contact Shipley Energy to learn more about how our commercial natural gas services can benefit your facility or commercial business.

Contact Shipley Energy