Natural gas will become more expensive than wood pellets within several years
According to the report published by Future Metrics company, in several years natural gas will get more expensive than wood pellets.
It's notified in the report that the time of cheap gas will be over by 2020. A swift increase of the demand in transport and power sectors as well as increase of exported liquid gas volumes will make domestic consumers pay for this fuel a much higher price. In addition, these days more and more foreign industrial companies and also private buyers are ready to offer a bigger payment for natural gas.
In order to give proof of the high forecasted fuel rates, the experts consider as an example a present situation in the Saudi Arabia power sector. In this country from 2010 to 2011 years the total dry gas reserves increased from 1,950 trillions cubic feet till 2,550 tcf. Such a significant growth is mainly caused by the growth of the shale gas reserves from 350 tcf till 825 tcf. Be guided by a common sense, anyone may conclude, that further increase of the shale gas reserves will most likely make the price for natural gas low.
Still it should be noted, that Saudi Arabia is really interested in penetrating the world market with its fuel, especially in ship delivering its liquid gas to such starving countries like Japan, India, China, South Korea and Brazil. It's noted in the report that such export will be an actually profitable business for sellers of natural gas. However, for domestic consumers these advantages are rather questionable. The supply of the national producers will always have to adjust to the demand in the world market. In case those producers have whatever extra product they will be able to search for the purchasers abroad. In most cases, as it's notified in the report, these purchasers will be ready to pay the higher rate compared to the one in the domestic market. Consequently, the prices for natural gas within the country will rise.
The influence of export, which potentially may lead to increased fuel prices, is not excluded within a wood pellet market as well. There exists probability that the growth of the European demand for pellets from the North America will lead to the growth of prices for such fuel. Everything depends on how strictly the carbon emissions will be controlled. Still for today it's more beneficially to buy wood pellets from the domestic producers and not from the sellers abroad. Oftentimes foreign pellets must be used together with coal and thus be pulverized beforehand. This process requires additional electricity costs, what finally leads to higher costs of these pellets.
