A New World Energy Map is Emerging. Exhibit A: Natural Gas Glut in America Fuels An Export Debate

Natural gas futures contracts closed at a price of $2.67 (per million BTUs) in trading Friday on the NYMEX (see chart above).  That's the lowest closing price since March of 2002, almost ten years ago, and that's not adjusted for inflation.  In real terms, it's the lowest price since 1999.  As VangeIV and some others have pointed out in the comments section, $2.67 is likely far below the actual cost of producing natural gas for most companies.As this Houston Chronicle article points out, natural gas is selling for as much as $12 per million BTUs in Europe (see chart) and as high as $18 in some Asian markets (that's "off the chart" above!).  Andrew Ware, a spokesman for Houston-based Cheniere Energy, is quoted in the article saying  "We have so much natural gas coming up that we don't know what to do with it."Well, it seems like a natural solution to our "glut" would be to export America's cheap, abundant American natural gas to Europe and Asia and allow U.S. companies to take advantage of the huge price difference, but that's generating some controversy as the article points out:"Debate is brewing over whether to keep the nation's glut of natural gas at home for cheap energy or export it at five times the price, possibly creating jobs and boosting the domestic economy. Businesses that purchase natural gas for industrial and residential use have rallied against proposals to liquefy and export the fossil fuel to Asian and European nations willing to pay much higher prices.Nine companies have sought federal approval to export about 10 billion cubic feet of liquefied natural gas per day, which would boost prices for U.S. customers. Cheniere Energy's Sabine Pass LNG plant in Louisiana already has won approval to ship out more than 2 billion cubic feet of liquefied natural gas a day.There's little doubt that exports will cause the price of natural gas to rise. The debate is whether the rise in gross domestic product and gas field employment might offset the negative effects of higher domestic energy prices."MP: It's quite an interesting development that the U.S. now has such an abundant supply of domestic natural gas thanks to the shale revolution that we're now having a debate on whether American companies should be allowed to export gas.  The debate over natural gas exports is more evidence that a new world energy map is emerging, and it is centered not on the Middle East but on the Western Hemisphere as Daniel Yergin pointed out recently in the Washington Post.Very few people predicted the historic "game-changing" domestic energy developments that have emerged in 2010 and 2011.  And Yergin provides some insight on why that is - "The transformation is happening not as part of some grand design or major policy effort, but almost accidentally. This shift was not planned — it is a product of a series of unrelated initiatives and technological breakthroughs." HT: Jim Curtis