By Javier E. David
While some observers are warning that surging shale development and new natural gas discoveries could spawn a potential glut, most energy market watchers say strong demand makes natgas oversupply a remote prospect.
Natural gas development is growing by leaps and bounds, especially in the United States. In the throes of what the International Energy Agency expects will be a 2.4 percent per year growth spurt in natgas through 2018, Exxon Mobil estimates global daily production of natural gas—helped in large measure by the US shale boom—will exceed 500 billion cubic feet per day by 2040.
Yet Jason Bordoff, the director of Columbia University’s Center on Global Energy Policy, views the situation differently. He noted that global liquefied natural gas (LNG) trade fell last year, and markets are currently experiencing “unprecedented tightness” as traditional fuel gradually cedes ground to natgas.
“We are far from a global supply glut,” said Bordoff, a former White House aide on energy policy. “The LNG market will loosen as new projects come online in a few years, and we will need that increased capacity to meet rapidly rising demand in Asian markets that are thirsty for more LNG.”
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