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U.S. energy producers’ recent successes in extracting natural gas from shale may have contributed to a price-dampening oversupply for now, but it’s also spurring tens of billions of dollars in capital investments by a reinvigorated industry.
Investments in pipelines and other natural gas infrastructure are expected to enter the trillions of dollars over the next two to three decades, with heavy investment in the near term.
“The gas business in North America has suddenly gone through a dramatic revolution,” as new horizontal drilling and hydraulic fracturing technologies have allowed access to tremendous natural gas resources, notes industry consultant James Jensen, president of Jensen Associates of Weston, Mass.
The industry needs new pipelines to accommodate the significant gas resources being discovered in places where it previously wasn’t found, he said, noting also that "fracking" is leading producers to oil.
Shale gas is also sparking capital expenditures by chemical producers that use natural gas as fuel and feedstock, and by other energy-intensive industries, and may prompt investment in natural gas-fueled power generation as well.
The shale discoveries could potentially shift the United States to an export market, as well, as shale gas is expected to reduce reliance on liquefied natural gas imports and pare U.S. electricity prices.
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