American Gas Association Predicts Moderate Increase In Natural Gas Price

Jack Gerard. Photo from the American Petroleum Institute.
Jack Gerard. Photo from the American Petroleum Institute.

The head of the American Gas Association predicts a modest uptick in the price of natural gas this year.

It’s unlikely to have an effect on a proposed Alaska pipeline.

There has been a spate of recent reports about the incredible growth in the U.S. oil and gas sector.

Here’s just one tidbit Jack Gerard boasted at an oil and gas symposium in Washington Wednesday afternoon. He’s the head of the American Petroleum Institute.

“Recently the International Energy Agency reports that the United States is on track to surpass Saudi Arabia as the global leader in oil protection, and to do so by 2020, seven short years,” Gerard said.

And it’s not just oil. The advances in hydraulic fracturing and horizontal drilling have lead to an abundance of natural gas in the Lower 48.

Congressman turned lobbyist Dave McCurdy heads the American Gas Association. He says that as the economy picks up, so will the depressed price of natural gas.

Though he expects it to be slow and steady, not a spike. Right now it’s about $3.40 for a million BTU’s.

“I would be surprised to see four dollars before the end of the year,” McCurdy said.

If producers were to build a pipeline from the North Slope to tidewater, the liquefied natural gas would be exported to Asia – not the Lower 48.

150x162LarryPersilyLarry Persily says it’s possible a price increase in natural gas from the continental U.S. could have an unrelated affect on Alaska, albeit several years from now. Persily is the federal coordinator the Alaska Natural Gas Pipeline.

He says Alaska’s competition would be the proposed export terminals on the Gulf Coast.

“If those plants have to pay significantly higher prices to buy North American gas to liquefy, put in a tanker and send to Asia, that’s going to drive up the price of their commodity in Asia, which could help us, because we’re not connected to Lower 48 pricing,” Persily said.

The Department of Energy is considering about a dozen Gulf Coast permit applications. One facility, owned by Cheniere Energy, is already under construction. But the earliest gas could be exported from there is the end of 2015.

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