Russia, Iran and Opec are going to be greatly weakened, while the US, Europe and China will be greatly strengthened. India can be a major beneficiary....some countries may start converting their transport fleets into gas-based ones, hitting the demand for and prices of petrol and diesel. Fourth, converting gas into oil will become economic.
...Shale has long been known to contain natural gas, but this was not worth extracting with conventional technology. Now a new technology, ‘fracking' , plus horizontal drilling, have greatly increased shale gas productivity, so extraction is now viable at $3-4 /mmbtu. The new technology has been pioneered in the US so successfully that the US has overtaken Russia as the world's biggest gas producer. US gas reserves have increased from 30 years consumption to 100 years consumption. Port terminals to import LNG (liquefied natural gas) into the US will instead export LNG to Japan.
The US dream of energy independence remains fanciful, but its dependence can indeed fall dramatically. Historically , the price of gas was linked to that of oil: gas cost one-sixth to oneseventh the price of oil. That equation has been smashed in the US, where oil costs $72/barrel but gas costs one-eighteenth as much ($4/mmbtu).
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at email@example.com