January 16, 2014

Study predicts stable natural gas prices for next two decades

IHS CERA predicts that natural gas prices will stay in the range of $4 to $5 per 1,000 cubic feet due to efficient production from shale fields.

Shale production will keep natural gas prices in North America in the range of $4 to $5 per 1,000 cubic feet in 2012 dollars through 2035, according to a new report by energy researcher IHS CERA.

In its study released Thursday, IHS predicts that even at market prices of $4 or less, about 900 trillion cubic feet of unconventional gas resources can be produced economically. That’s more than 30 years of U.S. consumption at current levels and about a third of what IHS estimates are North America’s total recoverable resources.

“This means that the North American natural gas resource base can accommodate significant increases in demand without requiring a significantly higher price to elicit new supply,” Tim Gardner, IHS vice president, said in a news release. The study noted that gas prices will fluctuate in coming years but will maintain a steep discount to the equivalent amount of crude oil.

There has been considerable debate over whether plans to export natural gas from North America would run up domestic prices from their low levels in recent years, which are a boon to petrochemical companies and other manufacturers, as well as consumers. But IHS CERA doesn’t think so and predicts that the country will become a net natural gas exporter by 2019.

The study said that over 15 years, an average residence that uses natural gas for heat will save $5,731 compared to an all-electric home.

The study is titled Fueling the Future with Natural Gas: Bringing it Home.

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