• 17 hours How The Stock Market Predicts Electoral Victory
  • 1 day Tesla's "Battery Day" Could Deal A Blow To Cobalt Miners
  • 2 days New TikTok Deal Hopes To Bypass National Security Concerns
  • 2 days Where Will Gold Go From Here?
  • 3 days COVID-19 Is Fueling A Pastic Waste Crisis
  • 3 days Gold Output Set To Decline
  • 4 days Uber And Lyft Look To Go Electric
  • 5 days COVID-19 Is Crushing Palladium Demand
  • 6 days This ‘Once-Boring’ Tech Company Is Now Super Hot
  • 7 days Will Air-Based Protein Be Our Future Food?
  • 7 days Google Pledges To Go Carbon-Free By 2030
  • 8 days A New Twist In The TikTok Saga
  • 8 days Gold Inches Closer To $2,000
  • 9 days Delivery Drones Are Coming Sooner Than You Think
  • 9 days Traders See More Volatility Ahead For Commodities
  • 10 days How COVID-19 Is Transforming The World's Sovereign Wealth Funds
  • 10 days Electric Vehicle Demand Set To Outpace Battery Metal Production
  • 11 days Copper Continues To Outperform
  • 12 days The Jury Is In: ESG Is A Megatrend Now Worth $250B
  • 12 days Today’s Young Adults Aren’t Leaving the Nest
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Oilprice.com

Oilprice.com

Writer, OilPrice.com

Information/Articles and Prices on a wide range of commodities: We have assembled a team of experienced writers to provide you with information on Crude Oil,…

Contact Author

  1. Home
  2. Markets
  3. Other

Great Divide Developing in U.S. Natural Gas

Bentek Energy managing director Rusty Braziel sees a great divide developing in U.S. natural gas.

Bentek are one of the leaders in tracking and analyzing American gas pipeline flows. Where gas is flowing, who's using it, and at what price.

Speaking at the LDC Gas Forum Northeast in Boston this week, Braziel told industry professionals that America may have made some mistakes in designing its gas pipeline network over the past several years.

He notes that the boom in shale gas has created a price disparity between east and west. Shale gas plays are located mostly in the east, and carry lower breakeven prices. Between $3.10 and $4.00 per mcf, according to Bentek estimates.

By contrast, conventional gas plays are more concentrated in the west. And come with higher price tags, beginning in the $4.50 per mcf range.

Cheaper gas in the east, expensive in the west. And yet, over the past years pipeline companies have been busy building new pipe like the Rockies Express to take gas from western producing areas to markets in the northeast. As Braziel summed up, "About $15 billion has been spent on taking gas from where it's more expensive to where it is cheap. It was a mistake."

That's a pricey mistake. And one that's not easy to fix. Several pipeline companies are now looking at reversing directions on pipelines initially intended to run west-to-east. This "backhaul shipping" may become more prominent as shale gas development continues in the east.

Yet another sign of the severe dislocation shale gas has caused in U.S. (and global) gas markets. Dislocations create mis-pricing, and mis-pricing creates investment opportunities.

Here's to the beast in the east.

Source: http://oilprice.com/Energy/Natural-Gas/Great-Divide-Developing-in-U.S.-Natural-Gas.html

By Dave Forest for Oilprice.com who offer detailed analysis on Oil, alternative Energy, Commodities, Economics and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit: http://www.oilprice.com

 

Back to homepage

Leave a comment

Leave a comment