Source: The Bedford Report
Natural Gas prices have been on the upswing this week as Japan's nuclear disaster has soured public sentiment on nuclear energy.
For comprehensive coverage of the Japanese nuclear power disaster and efforts under way to resolve it, visit PennEnergy’s Japan Earthquake and Nuclear Emergency 2011 special section.
Already, China has announced plans to freeze approvals for new nuclear plants, while Germany and Switzerland suspended their nuclear plans. Meanwhile, speculation has grown that the US will take a new direction with its nuclear energy policy.
Analysts argue that natural gas would be a direct beneficiary of a possible shift in a global energy strategy.
Nuclear power provided about twenty percent of Japan's electricity, and the expectations are that cargoes of Liquefied Natural Gas from Europe will re-route to meet additional demands from Japan as it starts recovering from the devastating earthquake.
Analysts at Deutsche Bank predict 5 billion to 12 billion cubic meters a year of liquefied natural gas supplies could now be diverted into Japan, driving spot prices higher.
Despite the country's oversupply, the US currently lacks the technology to easily liquefy large amounts of natural gas to sell abroad. More liquefied natural gas export facilities could be developed going forward. Currently, a subsidiary of Cheniere Energy is working on a deal to supply liquefied natural gas to one of China's largest independently owned natural gas companies.