“The New Hydrocarbon Interdependencies: Connections between Natural Gas, NGLs and Crude Oil”
As the U.S. shale phenomenon has spread from natural gas liquids, to NGLs and now to crude oil, these hydrocarbon fuel markets are becoming increasingly interdependent. Now a bump in one commodity can result in upheaval in another.
- Could a surplus of NGLs kill the economics of rich gas production (since low-BTU gas already has problems), resulting in a decline in total gas supply?
- Could lack of gas gathering infrastructure result in major constraints in crude oil production growth? What would that mean for the outlook for associated gas?
- If ethane prices fall to a level that would motivate gas processors to reject the product, where would the incremental natural gas production go?
- What does the reality of these new interdependencies mean for natural gas supply and prices?
