But now it seems like the tables have turned and we won't be discussing that topic any more. My own awareness of the game changing nature of unconventional natural gas began one year ago with this Daniel Yergin editorial in the Wall Street Journal describing massive new amounts of gas now becoming accessible in the US and elsewhere via new recovery techniques.
There is now so much of this new-found natural gas that it's no longer helpful to call it unconventional. Then came a briefing I was fortunate to attend last month at MIT with BP's chief economist, Christof Rühl. Describing the future of global oil and gas markets, and including projections for renewable energy and nuclear, he said the whopper that's changing everything is the recently realized super-abundance of natural gas ... everywhere.
Here then, is the take-away for Gazprom and its ardent admirers:
Seldom has a giant been hit by so many big blows in one year. First, by repeatedly cutting its deliveries without prior warning, Gazprom has acquired a solid reputation as an unreliable supplier. Second, after the United States has suddenly started mass-producing cheap shale gas and become the biggest gas producer in the world, the European market is flooded with new liquefied natural gas (LNG). Third, there is plenty of shale gas in Europe, and soon production is likely to start there as well. Steadily increased European demand for gas has been replaced by a gas glut, which the International Energy Agency predicts will last for 3-5 years. Fourth, the gas surplus is naturally depressing spot gas prices.And it gets worse. But I'll leave that to you if you're interested. The full article in European Energy Review can be found here. Depending on where you're reading from, I think you may find it a rather pleasant change of pace.