Demand for natural gas has not kept up with the phenomenal growth in supply. Thats indicated by the extremely low current price and the thousands of recently developed unconventional natural gas wells that are shut-in. Unconventional natural gas production from “dry” wells those that dont produce useful petroleum liquid products is at a virtual standstill.
This signals that some recovery in North American natural gas prices is likely—to the range of $4 per thousand cubic feet, perhaps—which would be welcomed by producers. Consumers who heat their homes with gas, and chemical companies and other manufacturers who rely on this raw material for producing petrochemical and polymers, should enjoy several decades of abundant supply.
A United States hopelessly dependent on imported oil and natural gas is a thing of the past. Most energy experts now project that North America will have the capacity to be a net exporter of oil and natural gas by the end of this decade.
To be sure, a North America independent of oil imports still isn’t energy independent. The U.S. economy will continue to be subject to world oil prices, and supply disruptions in the world will still create price spikes. Close allies such as Germany and Japan will remain significantly dependent on oil imports from unstable regions, and their dependence will constrain U.S. foreign-policy choices.
Still, the security benefit of North America’s new oil is significant.