The American natural gas industry has gone global with the war in Ukraine and the demand will keep rising with the Asian-European need for liquefied natural gas and Mexico’s conversion to gas-powered electrical plants.
That’s according to Suzanne Ogle, president-CEO of the Dallas-based Southern Gas Association, who says gas has a big role to play in calming the world’s anxiety about ensuring an energy system that’s secure, affordable and sustainable.
“Germany was dependent on Russian gas and they had somewhat compromised their system by an over-dependence on renewables, so now we’re hearing a lot of talk about that dilemma,” Ogle said in a phone interview with the Odessa American.
“The U.S. natural gas market is more dynamic and more subject to forces in the international markets. Overall I would say the markets are undergoing a fundamental transformation.”
Panhandle Producers & Royalty Owners Association President Judy Stark of Amarillo said gas prices, stubbornly low since last year at a little over $2 per thousand cubic feet, “are a function of market supply and demand.
“The factors of consumption, an unusually warm winter, high production levels, storage inventory levels and sales from storage create lower prices,” Stark said.
“As the summer temperatures rise, demand will rise and prices will increase slightly because of continued U.S. production levels.
“It’s hard to predict pricing, but energy experts project $2.75 per thousand cubic feet for December 2023 and a continued slight rise going forward into 2024,” she said.
Ogle said Mexico “is switching from diesel to gas-powered generation of electricity and the Energy Transfer and Howard Energy Partners pipelines from the U.S. will play key roles.
“By 2025 Mexico will require additional infrastructure to switch over,” she said. “Natural gas is cheaper and it offers lower emissions.”
Ogle said LNG exports are gaining prominence with American producers to Europe, India, China and Southeast Asia sure to gain importance.
“Power generation is using gas more than it ever has historically,” she said. “It’s moving away from coal and nuclear and now that wind and solar are getting more use, we need natural gas to back those up and have system resilience.
“I’m very optimistic. Some people talk about phasing out fossil fuels, but that is an uninformed expectation driven by an agenda rather than a collaborative, reality-based approach.
“Average citizens don’t understand how the energy system works because it is complicated,” Ogle said. “Any time there is an increased electrical demand on the grid, you’re using natural gas to backstop it.
“We need an energy system for the world that maintains a quality of life people can afford.”
