Natural gas prices for residential use have been dropping for 10 years, thanks to new natural gas discoveries and ongoing advances in production technologies. An excellent graph of natural gas prices appears here. The long-term decline in natural gas prices is unlikely to reverse itself anytime soon, as the United States has abundant natural gas resources and new technologies to inexpensively recover these natural gas resources. This translates to a long-term future of stable or declining electricity prices as more power plants switch to natural gas – unless policymakers intervene and put new roadblocks in the way of natural gas production.
Another interesting development is an increase last year in U.S. natural gas exports. European nations have been particularly vulnerable to adverse Russian foreign policy decisions because of Europe’s heavy dependence on Russian natural gas. A decision by Vladimir Putin to cut the supply of natural gas to Europe would create an energy crisis that Europe desperately seeks to avoid. More U.S. natural gas exports can enhance American foreign policy goals by giving other nations natural gas import options beyond relying on Russia’s goodwill.
A decade ago, American energy companies began planning and in some cases building liquefied natural gas import terminals to supply the United States with more clean-burning natural gas. Late last decade, however, the fracking revolution dramatically increased domestic natural gas production, making such import facilities unnecessary. Those same facilities, however, can now export American natural gas to other nations. Nevertheless, David Blackmon at Forbes.com notes that the Obama administration has been dragging its feet approving such export terminals. That is bad news for the American economy, bad news for American foreign policy goals, and bad news for environmentalists in other nations who would like to see natural gas replace coal power plants in their countries, as has occurred here in America.