Posted on 04/23/2012 12:52:08 AM PDT by neverdem
It may be the beginning of the end of ultra-cheap U.S. natural gas NG-FT. Less than a week after prices dipped below a decade low of $2 (U.S.) per million British thermal units, American authorities approved the nation’s first big gas export plant in half a century on Monday. Assuming Cheniere Energy LNG-A can secure financing, its liquefied natural gas terminal will provide struggling producers a way out of the gloomy domestic market. That may eventually force U.S. consumers and chemical producers to pay more. But it should also create a more stable market.
Global energy markets have been screaming for America’s natural gas bounty. The rise of fracking has caused prices stateside to plunge to about a fifth the level in Europe and about an eighth the Asian price.
At full capacity, Cheniere’s Sabine Pass plant will produce just over two billion cubic feet of liquefied natural gas per day, equal to about 3 per cent of daily U.S. gas production. And where Cheniere has gone, others will follow. Sabine Pass and other projects currently up for approval could eventually export up to 12 billion cubic feet of gas per day, according to estimates from energy consultancy IHS Cera, or the same as Russia’s daily sales to Europe.
It’s unlikely that all the planned export capacity will get built. Political opposition or lower global gas prices may rein in the ambitions of exporters eventually. And first production from Sabine Pass isn’t expected before 2015.
But eventually, U.S. and global prices should start to converge, taking the pressure off American drillers. Many have already idled rigs or are diverting more resources to recovering dearer crude. Without an export pressure valve, that would have been a recipe for future underinvestment, supply shortages and volatile prices.
The long-run effect of higher prices...
(Excerpt) Read more at theglobeandmail.com ...
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Look at the bill. I have a gas water heater and clothes dryer = $6 of a $24 bill. Everything else is service and tax charges.
yitbos
Never thought of that. Thanks!
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