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Bentek Official Sees $4-6 Gas for Possibly Up to Five Years

Natural gas prices of $6/Mcf or less are not a short-term market aberration, but rather will be around for awhile, a Bentek Energy executive said last week.

"We see the $4-6/Mcf market here for a year, 18 months. I should say range [of price] because $4-6 could be here for up to five years," said James Simpson, Bentek vice president of analytics, at an Energy Information Administration energy conference in Washington, DC.

"I'm pretty sure you can count on natural gas prices not being stable because demand isn't stable," said John Strom, co-founder of Houston-based Haddington Ventures, a developer of gas storage projects.

Brian Jeffries, executive director of the Wyoming Pipeline Authority, has witnessed three gas market downturns, the first one in the 1980s and the second one in the late 1990s. "What makes this one seem different from the other two is you got a downturn in price and it looks to me like we're going through a period of excess supply."

Rick Smead, a director with Navigant Consulting Inc., believes natural gas is being treated as a stepchild by the Obama administration. "Is there anybody here who has ever been an unappreciated staffer when your boss had it wrong and you had it right? [Think of] Melanie Griffith in [the movie] Working Girl. That's natural gas today," he noted.

"President Obama in his campaign was the one who got it right, distinguishing gas from oil. He always included it as part of his overall inventory of solutions to our problems and now" it seems to have "dropped off the map," Smead said.

"I think that there's a lot of schizophrenia in terms of trends for...natural gas," said energy analyst Christine Tezak, who was formerly with Stanford Group Co. "On one side you can look at forecasts for the deployment of renewables and they wind up displacing natural gas." Yet on the flip side, there are several former Clinton officials working in the Obama administration, who were once "very focused" on natural gas, she said.

Even with the Clinton influence, she raised the issue of whether the Obama administration will regulate hydraulic fracturing, a method to stimulate the production of oil and gas, under the Safe Drinking Water Act.

On the liquefied natural gas (LNG) front, "the common thinking a year or two ago, given worldwide natural gas prices, was it would be difficult for the U.S. to attract incremental or base LNG cargoes...That landscape has changed dramatically over the course of six or eight months," Smead said.

"From the standpoint of LNG, we believe the U.S. is going to be the market maker and price maker for the world, as opposed to the price taker," said Simpson.

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