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Natural gas industry adapts to low prices | 2016 Strategic Directions Report

Natural gas industry adapts to low prices | 2016 Strategic Directions Report

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Managing the Low Price Market
Precipitous swings in price underscore the tricky and fickle market for natural gas. Economic growth in emerging markets, global liquefied natural gas (LNG) trade and growing demand for cleaner energy sources have differing impacts on price. Upstream and midstream organizations are maximizing production and diversifying into downstream markets. Countries like India are capitalizing on low prices to embark on new projects. Additionally, as natural gas takes on a more prominent role in the power mix, careful coordination with the electric market will be integral to meeting future demand.
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Technology Brings Opportunities and Challenges
As the natural gas industry continues to evolve, companies are implementing new technological advances such as advanced metering infrastructure to create efficiencies, improve customer experience and better manage assets. Financial pressures are also forcing organizations to drive cost savings by using program management services. However, with increased technology use, cybersecurity is a growing concern.
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Regulations Shaping Operations and Planning
The Environmental Protection Agency’s recent release of its final rules aimed at reducing methane emissions as part of the Clean Air Act and Clean Power Plan has created specific regulations that will transform the U.S. natural gas sector. Underground natural gas storage operators are also facing historic regulatory challenges as the federal government expands oversight for active storage facilities.
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Closing Commentary
Factors stoking optimism for certain segments of the natural gas industry are plentiful. However, capital cost cutting has left many producers with natural gas oversupply and increasingly few places to send it profitably. How stakeholders across the natural gas value chain address the current correction will go far in determining natural gas’s full potential as world governments step closer to fulfilling agreements related to climate change.
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2016 Strategic Directions: Natural Gas Industry Report

The past year has seen an industry coming to grips with the reality that natural gas prices have yet to rebound. Steady price conditions have pushed industry players – and the markets they interact with – to find ways to adapt. Finding efficiencies to streamline production, investing in new technologies and capitalizing in downstream opportunities are just some of the approaches employed by industry leaders. The 2016 Strategic Directions: Natural Gas Industry Report examines how natural gas leaders are managing challenges — both old and new — and evolving for future growth. [Tweet This]


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