The history of technology both destroying and creating wealth may be repeating itself with Japan's gas hydrates breakthrough and American LNG exports now on a collision course. Here is the rest of the story.
In 2005 the USA was facing a natural gas shortage, and big dollars were being invested in facilities that would import LNG. At that point, shale gas was being produced, but very few understood its implications. By 2009, booming shale gas production turned a gas shortage into a gas glut and creatively destroyed billions of dollars invested to import LNG.
The boom in US gas production has birthed a rush to invest billions in facilities to export natural gas. Today, a particularly attractive market for LNG exports is gas-poor Japan and Asia, where gas is priced as much as $16 per thousand cubic feet. But gas exports won't make it across the Pacific for about another 5 years.
As the shale gas boom in the US shows, a lot can happen in 5 years that turns markets upside down. Indeed, that may have happened just last week.
Last week's news that Japan successfully produced natural gas from oceanic hydrates could make Japan and many other nations gas rich for the first time in human history.
http://www.nytimes.com/2013/03/13/business/global/japan-says-it-is-first-to-tap-methane-hydrate-deposit.html?_r=0. The Japanese believe that they may be able to produce oceanic gas commercially within 5 years and by so doing escape expensive gas and end their need for LNG imports.
For investment in America pouring into LNG export facilities that are supposed to begin operating in about 5 years, last week's technological advance to produce gas from ocean hydrates is a brand, new risk. How big a risk only time will tell.
But Japan's oceanic hydrate breakthrough may well crush America's LNG exports to it and other nations in the currently lucrative Asian gas market.