Natural Gas Price Volatility Could Stage Comeback

October 2013, Vol. 240 No. 10

As part of a “U.S. Century” fueled by global shale gas dominance, domestic natural gas prices will rise and volatility will return in the next three to five years, participants at the LDC Gas Forum Mid-Continent in Chicago were told on Sept. 10.

The big story in natural gas will shift over the next five years from one of abundant supply to one of increasing demand, ConocoPhillips’ senior analyst Jim Duncan said. “No matter what your view [on price], odds are, consumption of natural gas is going to go up,”
Duncan predicted U.S. gas demand could rise by 7 Bcf/d to 20 Bcf/d through 2017, driven by power generation regulations, LNG exports, ethylene plants and transportation growth.

Deeming the ample supplies of domestic natural gas a “silver lining,” Duncan said a number of industrial users — such as steelmakers and automobile manufacturers — are increasingly seeking to invest in the United States. Emission regulations, specifically the federal mercury and Air Toxics Standards poised to come into effect next year, Duncan said, could potentially reduce the number of coal-fired plants and increase the amount of gas-fired generation.

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