The natural gas industry wants state policymakers and residential customers to believe that low natural gas prices are here to stay, but large market forces are aligning to drive up demand and prices, according to recent news articles.
Recent articles by The Examiner and Inside Climate News highlight the emergence of two sources of large-scale demand that could put an end to the low natural gas prices customers have enjoyed in recent years.
The Examiner reports in a recent article that U.S. natural gas producers are preparing to export large quantities of U.S.-produced natural gas to Europe. The article quotes U.S. Energy Secretary Ernest Moniz as saying, "We anticipate becoming big players, and I think we'll have a big impact. We're going to influence the whole LNG market." Moniz said four LNG export terminals are under construction and the first exports may be shipped overseas as early as this year.
The exporting of natural gas will force U.S. consumers to compete with buyers in Europe, where prices are triple what Americans pay now. The European natural gas market is currently dominated by Russian natural gas giant Gazprom.
Another driver of massive demand is the rapid retirement of coal-fired power plants, which is leading to the construction of new natural-gas fired plants, thus creating more new demand - and the prospect of higher natural gas prices. Inside Climate News reported in a recent article that as much as one-third of all U.S. coal production could stop by 2025 due to closing of coal-fired power plants. Power plants would mainly switch to natural gas in the short term, the article states.
To read the Examiner article, click here.
To read the Inside Climate News article, click here.