The Long Term Outlook For Natural Gas

It is hard to overstate the impact of the shale gas revolution in the U.S. In 2005, U.S. natural gas production had dropped below 50 billion cubic feet per day (Bcf/d), and it was widely believed that the U.S. was set to become a growing importer of liquefied natural gas (LNG). In fact, a company called Cheniere Energy built a massive complex at Sabine Pass on the coast of Louisiana to handle what was expected to be a deluge of LNG imports.

Fast forward a decade, and natural gas production in the U.S. has surged by 50%, natural gas prices have fallen from $13 per million British thermal unit (MMBtu) to ~$3/MMBtu, and Cheniere Energy is now exporting LNG. (See How Cheniere Energy Got First In Line To Export America’s Natural Gas). In 2009 the U.S. jumped past Russia to become the world’s top natural gas producer:

Read More …