Summitt Blog
Canadian & Global News

Will Natural Gas Remain Cheap for 10-20 Years?

The Energy Collective
August 17th, 2011

The Colorado School of Mines estimates that the total potential of U.S. gas supply increased by 71 percent from 2000 to 2010.

And they are not alone; CERA, MIT and others believe that the U.S. is flush with natural gas.

The process of getting to this shale gas is raising some environmental concerns. We believe, as many experts do, that additional environmental regulations will increase the price of extracting shale gas but will not destroy its cost.

historical-gas_aug2011

Though it has not yet affected the US, the price of natural gas in Western Europe has already increased by about 15% – 30% in the aftermath of Fukushima. Shutting down German and Japanese nuclear plants has not increased the world’s output from wind or solar systems; it has increased the demand for natural gas. At current prices, natural gas in the UK costs more than 3 times as much as it does in the US or Canada, making suppliers consider the idea of shipping gas via LNG tankers. If that happens, the price differential will narrow considerably. I do not expect the narrowing to come from lower prices in Europe.

Read More

Share Button

Related posts: