Technological advances in the production and transportation of natural gas are bringing new opportunities but the old way of doing business in gas markets is being challenged, according to a report from IHS Cambridge Energy Research Associates (IHS CERA) and the World Economic Forum. The report, Energy Vision 2011: A New Era for Gas, says that advances in unconventional gas production combined with growing liquefied natural gas (LNG) trade are changing long-standing assumptions about natural gas markets around the world. The report also states that the biggest demand for natural gas will come from the power generation industry because it is less expensive and emits fewer greenhouse gases than other fossil fuel sources. As a result of the shale gas revolution, North America has enough recoverable gas to meet current levels of use for more than 100 years. Global LNG trade doubled from 2000 to 2010 and is expected to increase another 50 percent or more in the next decade. Recent advances in technology mean that there is likely to be more gas available at a lower price than was assumed a few years ago. Shale gas also helped to slow or reverse the move toward the convergence of prices and a truly global gas market, the report says. North America is much less dependent on LNG than was projected three years ago. The increase in gas supply also challenged the traditional linking of gas prices to oil in Europe as gas suppliers are offering more flexibility in contract terms and pricing to compete with growing amounts of LNG.

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