As you can see above (courtesy of the government of Nebraska), natural gas in the United States has gotten really cheap. Fracking and horizontal drilling mean that supplies are skyrocketing, but an unseasonably warm winter means that demand for natural gas was unusually low. Meanwhile gas is much more expensive in Japan and Europe, but we don’t have the infrastructure to liquify North American gas on large scale and ship it abroad. Consequently, yesterday prices fell below $2 per million British Thermal Units—the arbitrary line that signals to journalists the need to write articles about how ridiculously cheap natural gas has become.
The most interesting angle in this is that it’s not actually clear we even have any place to put all this gas, since nobody really planned for the boom. Stored supplies have increased 56 percent year-on-year “suggesting supplies may test demonstrated capacity of 4.1tn cubic feet before heating demand resumes next winter.” What we’re looking at is essentially a race between the ever-growing stockpile of gas and utilities’ efforts to switch away from coal-fired electricity generation over toward natural gas.