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Foreign gas key to U.S. supply: Executives, investors don’t see Alaska as big player
Gary Park Petroleum News Calgary correspondent
Although they think a squeeze on domestic natural gas supplies is the toughest challenge facing the U.S. energy industry, only 3 percent of 400 oil and gas executives and investors polled by RBC Capital Markets think that Alaska will be a major part of the solution.
The results show strong doubt among the decision-makers that gas from Alaska will reach the Lower 48 “anytime soon,” according to RBC analyst Joe Allman.
Overall, 52 percent of the respondents believed the gas outlook for the United States is as bad, or worse, than the oil crisis of the early 1970s, but 48 percent were confident the challenge was manageable.
However, 92 percent said the United States will increasingly rely on foreign sources of gas within five years and 54 percent believe it will become as dependent on foreign gas as foreign oil. Gas prices expected to hit $5.03 per mcf by year's end Of the other findings:
• Gas prices will hit $5.03 per thousand cubic feet by year’s end and advance to $5.16 at the end of 2004 and $5.32 at the end of 2005. The RBC’s 2002 annual survey forecast prices of $3.89 an mcf at the end of 2002, 70 cents below the actual level.
• Almost two-thirds of executives and investors identified Canada as the leading external source of gas in the future, followed by the Middle East at 19 percent, Russia 15 percent and 15 percent South Asia.
Allman said RBC does not expect Canada to grow much above its current exports of 10 billion cubic feet per day or about 15 percent of U.S. demand, predicting just a 0.5 percent rise by 2010.
He said the respondents’ interest in the Middle East, Russia and South Asia reflects the rapid emergence of liquefied natural gas as a supply source.
RBC is counting on LNG imports to expand from 1.7 billion cubic feet per day at the end of June to 7 bcf per day by 2010.
• The poll yielded a prediction for crude oil prices of $28.24 per barrel by the end of 2003, easing back to $27.83 over the next year.
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