President Obama faces a shale gas dilemma that threatens to damage his bid to secure a second term in the White House, stated the latest report from natural resources experts GBI Research.
The United States is currently endowed with a wealth of natural gas following years of overproduction, and while allowing exports would win friends within the industry and potentially boost the economy, it would anger those seeking to keep domestic prices low, says the new report.
The past few years have seen natural prices falling to around $3 to $4 per million British thermal units (MMBtu), and the U.S. Energy Information Administration EIA expects the annual wellhead natural gas price trend to remain at around $5 per MMBtu until 2025.
By contrast, liquefied natural gas (LNG) prices in potential trade countries, particularly those in Asia, are three times higher, suggesting a highly lucrative export market. However, shipping LNG abroad would alter the supply/demand balance and naturally result in a higher cost for U.S. consumers.
The development of shale gas over recent years has significantly altered the U.S. energy outlook and major industry players have significantly increased their 2012 capital expenditure (capex) for the development of shale plays.
Read the whole article on Rigzone.