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    Financial Times: Natural gas: Hydrocarbon copies

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Summary

Natural gas prices can be blamed on the shale gas boom and a very mild winter. The Financial Times also pits fungibility as the larger culprit. Where the same gas is 4x more in Europe or Asia, there is no practical way to transport America’s surplus without the construction of controversial liquefactions facilities

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Press Notes

Financial Times: Natural gas: Hydrocarbon copies

Fungibility is underrated. Take a bunch of hydrogen and carbon atoms, link them together in certain ways, and they can become among the most useful and concentrated sources of energy on earth. But markets can be awfully fickle about what they are willing to pay for the same unit of energy.

Right now in the US, 1m British thermal units of gas can be had for about $2.40. That is not only the lowest in a decade; it is the cheapest ever compared with an equivalent amount of oil, at about 14 per cent of the price. A little over six years ago, natural gas peaked at 140 per cent of oil’s price.

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