In mid-2008 oil prices climbed to almost $150/barrel, then dropped to around $40 and now moved back to $100. Natural gas prices have remained very uneven throughout the world. In the US it sells for about one fourth of its “BTU-parity” with oil. There are many reasons for this situation: the considerable demand destruction in Russia; large new capacity of liquefied natural gas (LNG) in Qatar and elsewhere; and of course, the inertia of the success in shale formation activities in the United States.
Massive new deposits of natural gas are discovered continuously, such as the recent feats in Eastern Mediterranean. The International Energy Agency has suggested that ultimate world recovery is over 30,000 Tcf of natural gas, 300 years of supply at current rate of use.
Price gyrations affect all aspects of the natural gas world including LNG trade, the desirability or lack thereof of arctic pipelines, conventional and, especially unconventional gas production. A significant feature of future gas prices is that they are likely to be technology driven, similar to oil prices, rather than resources driven. Shale production and widely available LNG facilities will unify the price of gas internationally and reduce its seasonality in the not too distant future. It is likely that the United States will be exporting LNG within two years from today to a hungry China and a Russian-dependent Europe. Other modes of transportation, including new versions of compressed natural gas will also be brought into the market to serve niche applications.