Natural Gas Price Implications from the Tragedy in Japan

According to Energy Solutions, Inc. President, Valerie Wood, “If Japan’s entire loss of nuclear power is made up with LNG, it would likely result in an increase of 1.1 Bcf/day of LNG imports to Japan.  However, because the U.S. doesn't rely heavily on LNG supplies, this development isn’t expected to have a huge impact on U.S. natural gas prices and supply levels.  This volume is viewed as easily replaced via available domestic supplies.”

Near-term, the tragedy in Japan is expected to have a downward impact on commodity prices as the consumption of commodities, including oil, will decline temporarily.  It is projected that the initial decline in oil demand from Japan will potentially offset the loss of oil production from Libya.

As reported in the March 2011 issue of Natural Gas Buying Guide, a publication of Energy Solutions, Inc., there are some anticipated longer-lasting impacts for the nuclear industry because the hurdles associated with the construction of nuclear power just got higher.  Nuclear power in the U.S. was enjoying widespread political support, but the outlook for nuclear power now becomes cloudy.  Now, the policy of nuclear power will again become increasingly influenced by public opinion, especially since federal regulators have indicated that one-fourth of U.S. nuclear reactors in 13-states use the same containment system design as the Japanese reactors.

Valerie Wood concludes that, “Overall, the Japan tragedy is expected to have limited near-term impacts on natural gas prices in the U.S, but the longer-term impacts could be a very different story as this tragedy will likely put an increased reliance on natural gas-fired electric generation around the globe, a solution and result that is very viable for the U.S. given the amount of prolific shale gas supplies.”

Natural Gas Buying Guide offers a three-step approach to help companies improve their profitability.  If natural gas purchasing is implemented in the manner described therein, companies should be securing a natural gas price that will enhance their competitive edge.  The Decision Timeframes outlined in this publication have been time tested and provide readers with some of the same benefits that, until now, have only been available through tailored consulting services.  Click here to learn more and secure your copy of Natural Gas Buying Guide.

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About Energy Solutions, Inc. 

Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 50 years of experience in the natural gas industry, our team focuses on natural gas prices and in helping businesses improve their internal processes for the purchase of natural gas.