Cheap Natural Gas Heralds an Energy Revolution

All bets are off for the future of energy in the United States and, indeed, the world, as the price of natural gas plummets to ever-lower values -- thanks to the development of technology that can access gas and liquids trapped in hitherto inaccessible shale rocks.  In 2011, shale gas accounted for a quarter of U.S. natural gas production.  But this seemingly bright future may depend on a court decision (expected in June 2012) and, of course, on the outcome of the November elections. The Economics of Natural Gas Consider the history of natural gas prices just in the last few years.  In mid-2008, the spot price (at Henry Hub) reached a peak of $13 per mcf (1,000 cubic feet, with a heat value of 1 million Btu -- denoted as 1 MMBTU) -- having doubled since mid-2007.  Since then, the price has decreased sharply, dipping to $2 in mid-March, and it now stands at $2.30.  If prices decline further, natural gas will be cheaper than the average steam coal, which up...(Read Full Article)