With NG futures topping $7, let's hope this new golden age for NG sticks for a few years before we go through another bust cycle.
A while back (a couple of years ago I think), somewhere I posted on GHS that it was possible we were heading into a NG golden age. And now it seems to me like the Russian sanctions and Europe's need for LNG should stay around for a number of years.
Of course, the seven sisters/indies always tend to over drill and dump gluts on the market and drive down prices. Yet this is quite a unique geopolitical situation. I can see a lot of oil drilling coming and oil dropping back down relatively fast, but the demand for NG could hold up the futures markets for several years.
Jesse, in addition to the possibility of operators over producing which may be less likely this time around, what does seem likely to me is that sustained high prices will act to increase investment in and deployment of renewable and nuclear energy. Certainly it looks like that will be the immediate effect in western Europe. If LNG is the driver of the current price environment, that might be a fairly short lived Golden Era.
even the newer, not fully proven modular nuclear reactors wouldn't be producing power for several years, if Europe started today. I don't know what it would take, and how much time it would take, for Germany to try and bring its reactors back on line. Surely years.
For renewables, they continue to increase their load on our grid here in the US, but they are a long way from being a replacement for oil and gas. Not sure about how that stands in Europe. Of course, it is still true that necessity is the mother of invention.
Europe is far ahead of the US in deploying renewables and much of the nuclear power will actually be plants set to be decommissioned that will remain on line. 70% of France's electricity is generated by nuclear. Germany was on a trend to decommission nuclear plants but three remain in operation and another three were shut down December 31. I doubt they will take years to be brought back into operation. Renewable investments will go up significantly, public and private. And microgrids can be built and operational in a matter of months. I don't see a 100% replacement for natural gas but next heating season but the decline in demand may not be far behind the next.