is gaining more attention as of late than coal or oil. Global users are quickly shifting to natural gas as global production and demand increase. This morning US natural gas prices climbed just under $4.00 as winter cold weather pushes temperatures lower than expected increasing residential demand. Until recently residential and spare capacity has been the only use for US natural gas, it was not until recently that the DOE began to approve projects designed to export the commodity as production skyrockets using new fracking methods. Driven by surging natural gas consumption in Asia and the United States, global use of this form of fossil fuel rebounded 7.4 percent from its 2009 slump to hit a record 111.9 trillion cubic feet in 2010, according to a new Vital Signs Online report from the Worldwatch Institute. This increase puts natural gas’s share of total energy consumption at 23.8 percent, a reflection of new pipelines and natural gas terminals in many countries.
The world’s largest incremental increase in natural gas use occurred in the United States, where low prices triggered a 1.3 trillion-cubic-feet increase to 24.1 trillion cubic feet, just over one-fifth of global natural gas consumption. But the Asia Pacific region experienced the strongest growth as a share of 2009 consumption levels, with China, India, South Korea, and Taiwan all experiencing demand growth of over 20 percent. China, which surpassed Japan in 2009 to become Asia’s largest natural gas consumer, by and large led the region’s growth spurt by consuming 3.9 trillion cubic feet, or 3.4 percent of world usage.
Natural gas producers have responded to this revived demand with a 7.3 percent boost in production. The United States maintained its position as the leading source of natural gas, accounting for just under one-fifth of the world’s total production in 2010. In Russia, which holds nearly a quarter of the world’s proved natural gas reserves, production jumped 11.6 percent. In the Middle East, growth in production of natural gas far outstripped that of consumption, rising by a full 13.2 percent. Last year, Qatar and Iran alone accounted for 29.4 percent of global proved reserves.
Crude oil on the other hand is also witnessing a shift in production as the US becomes the world’s largest producer of crude oil using new methods to pull the black gold from the earth. These new methods have made the US energy independent and have created new exports for the US helping increase its GDP and trade balance. While these new production methods are exceeding demand and capabilities, the US is witnessing a glut of oil with EIA inventories at record highs as pipeline construction lags. This has recently pushed crude oil to trade well below its recent average range, trading today at 94.02 well within the estimates given earlier this year by the EIA. The lower the price of oil, the lower inflation and consumer prices which helps business grow and costs decline supporting the global recovery. Brent oil is trading at 111.44 well below its longer term average as prices eased after the historic agreements between Western Allies and Iran.