It’s the high costs of the difficult to reach and developing basins now being tapped to supply this nation’s growing demand for natural gas that have driven prices to a new level, and those costs won’t go away regardless of the worldwide price of oil, a ConocoPhillips vice-president recently told Natural Gas Intelligence.
While some believe natural gas prices have been dragged higher by $100 per barrel of oil or pushed up by supply shortfalls, these factors don’t explain the step-change gas prices have experienced. Higher full-cycle gas production costs, due particularly to greater reliance on unconventional supply basins, have driven the prices all gas consumers pay to a new level, one where they’re bound to stay, according to Will Hussey, ConocoPhillips senior vice-president for origination.