In a raft of articles on this blog and elsewhere, the surge in U.S. gas production–due mostly to rapidly increasing output from shale formations–has been touted as a key savior of domestic drillers and consumers.
At the same time shale gas has been more than a headache for LNG exporters and pipeline monopolists, for some it threatens to become a nightmare – softening prices, competing with pipeline supplies, driving LNG demand to spot markets – generally making a pain of itself, from the viewpoint of the gas industry’s would-be GOPEC.
By providing a plentiful alternative source of supply for the world’s largest gas market, the U.S., shale gas has reduced wellhead netbacks throughout the Atlantic Basin. International reverberations have been dramatic. Even the Russian Bear, feeling the hot breath of the market, is softening its pricing terms for international gas sales.…