Report: Natural gas prices to surpass wood pellets in 8 years

June 5th, 2012 in News, News Archive

By:  Luke Geiver
Biomass Power and Thermal

A new report issued by FutureMetrics LLC predicts that the price of natural gas will be higher than that of wood pellet fuel within the next three to eight years.

“We believe that well before 2020 we will see the end of cheap natural gas,” the report noted. “Rapidly increasing global demand in the transportation and power sectors and the rapid growth of LNG export capacity will force domestic users to bid for gas against users in sectors and locations that are willing to pay much higher prices than we pay today.”

The report, “An Analysis of the Future of Natural Gas Prices and Wood Pellet Prices: Natural gas will become much more costly than wood pellets,” uses the common reference of the U.S. as “the Saudi Arabia of natural gas,” to help explain the pricing future of natural gas. From 2010 to 2011 alone, the report notes, the U.S. Energy Information Agency’s estimates of total dry gas reserves increased from 1,950 trillion cubic feet (tcf) to roughly 2,550 tcf. That increase came from shale gas reserves that increased from 350 tcf to 825 tcf from 2010 to 2011. According to the report, common wisdom shows that with even more shale gas reserve increases expected, the price for natural gas will remain low.

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