Demand for natural gas has risen in recent months while the supply has fallen, causing prices to spike domestically and especially overseas. “Gas market chaos” has driven prices 280% higher in Europe this year and led to a more than 100% surge in the U.S., Reuters reports. Nasdaq.com lists some key reasons for the increase:
- Slow restoration of hurricane-affected operations of natural gas producers following hurricanes Ida and Nicholas
- Late-season hot weather in the U.S. driving consumption above normal levels
- Surging consumption in Europe, Asia and Latin America increasing demand for liquefied natural gas exports from America
There are some benefits for Louisiana’s industrial sector. Petrochemical plants depend on natural gas as a fuel and feedstock, but since the prices they pay for natural gas have not gone up nearly as much as for their counterparts in Europe and Asia, the state’s plants “are not in danger of being out of competition” internationally, says Loren Scott, an economist who closely watches the sector.
The Haynesville natural gas play will become much more competitive, which should benefit the state’s economy, particularly in the Shreveport area, he adds. Haynesville also is convenient for southwest Louisiana’s LNG facilities, which stand to gain from greater international demand. See the full story.