Today's U.S. Gas Market - The Culmination of 'The Perfect Storm'

• Author: Wendell Mottley
• Profession: New York-based Investment Banker having previously served as executive director of the company which eventually became the pivot of Trinidad and Tobago s natural gas-led industrialization and as Minister of Finance, credited with playing a decisive role in setting Trinidad and Tobago on a sustained path of growth from 1994 onwards
• Pages: 66-74

66

TRINIDAD AND TOBAGO INDUSTRIAL POLICY 1959–2008

As pointed out in the previous chapter, developments in the

U.S. gas industry bear significantly on the Trinidad and Tobago

industry. For decades, the U.S. gas market has been supplied by

more than ample domestic production. Developed pipeline and

storage systems service that nation. In addition, Canadian and

Mexican gas has fed into this infrastructure to boost the domestic

supply.

As we related in the previous chapter, easy supply growth in

response to demand has led to a long period of low average U.S.

gas prices in the range of $1.00 per mcf in 1976 to $2.50 per mcf in

1992 (see Figure 5.1). The chart also illustrates a recent decisive

upward shift in gas prices which peaked at $10.00 per mcf in 2003

and are, at the time of writing (March 2008), $9.00 per mcf.1

Figure 5.1

Natural Gas Wellhead Prices ($/Mcf)

TODAY’S U.S. GAS MARKET

– THE CULMINATION OF

‘THE PERFECT STORM’

Chapter Five

Source: Credit Suisse

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