As there was so much supply, the Energy industry was told less than two years ago to get used to the fact that oil and gas prices would be lower for longer. Coal was on its way out, and the future appeared to be bright and green. Let’s fast forward to October 2021. We have record-high gas prices, oil prices over $80 per barrel, and a surge in coal consumption that has resulted in price increases that were probably unfathomable even a year ago for many. What comes next? It appears that no one knows.
Oil demand was expected to be nearing its peak, but forecasters are suddenly modifying their estimates because it appears to be defying all attempts to restrict it artificially. Demand for gas is at an all-time high, as are costs. And, as with oil, analysts are divided on whether this is a transient, short-term issue or one that could persist for a longer time.
Aspects of Energy Amrita Sen goes even farther, arguing in a recent editorial piece for the Financial Times that high fossil fuel prices are here to stay. Instead of attempting to lower them, stakeholders should embrace the fact.The argument is that increased fossil fuel prices will encourage us to abandon them instead of lower-carbon alternatives.
As a result, US firms are contemplating billion-dollar investments in a new wave of LNG export terminals on the supply side. Russia is pumping at an all-time high and plans to increase output even further. Qatar is planning to significantly increase its gas production capacity in the following years, while Australia has set its eyes on becoming the world’s largest LNG exporter.