Dr. Tim Boersma (Senior Research Scholar) and Dr. Tatiana Mitrova (Fellow), two energy analysts from Columbia University’s Center on Global Energy Policy, recently penned an eight-page, wide-ranging paper entitled A Changing Global Gas Order. This is a quick and worthy read, but those of you looking for the nuggets, here goes:
- The U.S. shale energy revolution is the fundamental reason why global natural gas markets are in the midst of a “dramatic shake-up.” And, while other nations would like to follow the U.S. lead in shale, there are many reasons why that won’t happen (at least in the near-term).
- Other factors influencing the shake-up: (1) high levels of infrastructure development and gas penetration are increasing around the world; (2) new LNG technologies (most notably FSRUs) are making the gas market more flexible on the demand side; (3) the number of both gas exporting and gas importing countries is growing rapidly; (4) intensifying inter-fuel competition, especially in the electricity sector, has forced gas pricing to become more market-based; and (5) substantial new gas supplies, combined with weaker-than-expected demand, are creating a gas glut (but that may be short-lived).
But, as the authors point out, it all comes back to this…
U.S. shale gas production has increased from about 5 billion cubic feet (bcf) per day in 2005 to nearly 40 bcf/day today, accounting for about half of America’s dry gas production.
That’s already a big deal… and America is just getting started!