Will natural gas get cheaper or more expensive in 2015?
In early 2014, many energy industry experts and consumers alike feared that the price of natural gas would spike across Australia, leading to higher gas bills for customers Down Under. In recent months, however, changes in the energy market have made the natural gas sector more vulnerable than was previously predicted. What does this mean for energy policy, both here and abroad, and how will it affect gas prices for consumers using the fossil fuel?
2014 natural gas predictions
Last year, as oil prices continued to climb, many developed countries looked to natural gas, viewing it as an ideal path toward a sustainable energy future. Natural gas has a lower carbon footprint than oil, though it is not a renewable resource in the way that solar and wind technologies are. However, due to its power, availability and lower rate of emissions, it was seen as a great alternative to oil. In fact, US president Barack Obama hailed the fossil fuel as a 'bridge' source between unsustainable energies like coal and oil and renewables like wind and solar.
The US, Canada and Australia all focused on natural gas in 2014, particularly in the face of high oil prices. In fact, Australia was predicted to outpace other leading countries in its exporting of the fossil fuel. A report by the Grattan Institute even stated that Australia's natural gas industry could be worth $60 billion by 2018.
As a result, many industry experts worried that the abundance of natural gas Australia would be supplying to foreign customers such as Japan would drive up energy costs at home.
" … domestic consumers will soon have to pay gas suppliers the same high price that suppliers can fetch on the global market," Tony Wood wrote for the Grattan Institute in October.
Looking ahead to 2015, the oil and natural gas industries have changed somewhat. Oil prices have fallen globally, to the joy of many consumers. However, those who have invested in natural gas may be less pleased.
According to ABC news, the falling price of oil has hurt the prospects of liquified natural gas. Not only does the increased demand for oil hurt the market price of the controversial fossil fuel, the fact that gas sources are generally remote and energy-intensive to reach has made gas less viable.
"Because gas markets have traditionally been landlocked it was difficult and costly to transport gas long distances," ANZ senior commodities analyst Daniel Hynes told ABC.
With one of Australia's main energy purchasers being Japan, the natural gas industry's profitability rests heavily on that country's preferences for either oil or gas. Hynes told ABC that Japan is currently happy to purchase oil, due to its low cost. It remains to be seen how natural gas will fare in 2015.