The Era of Cheap Natural Gas Has Arrived

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Simply put, the era of cheap and abundant natural gas has begun. The price of natural gas is now less than one-quarter that of oil on an energy equivalent basis. Indeed, it has fallen more than 25 percent over the past three years. When adjusted for inflation, American consumers haven't had cheaper natural gas since December 2002 (see chart).

The success of horizontal hydraulic fracturing of shale gas and the profound importance of natural gas on America's energy future can't be minimized any longer. The surging supply of domestically-produced shale gas in the last few years provides overwhelming evidence that the U.S. has enough natural gas to easily meet demand well into the next century.