U.S. natural gas in 2011 and beyond

In January 2011 the refrain was “$5 natural gas forever,” based on the U.S. Energy Information Administration’s (EIA) annual outlook, which argued that natural gas prices will remain below $5 per million Btu until 2022. The underlying rationale was growth in the “vast” U.S. shale gas resource base. Many bloggers, bankers and bureaucrats accepted the verdict. Not to be outdone, the Paris-based International Energy Agency (IEA) issued a press release on January 20th (2011) and in the press release they claimed that “booming” shale gas production in the United States would prompt a “global rush” to explore for the “new” resource against a backdrop of natural gas prices in Europe and Asia ranging from $8 to $11 per MMBtu (Fig. 1).