RE: Jeffrey Saut's views I hope he is correct . The gas glut on the spot market was brought about by overdrilling . Overdrilling because most major companies were running on hedges at app 6.00 per tcf . They were also able to ( and still can ) book natgas reserves on a 6 tcf = 1 barrel basis . This bulked up the theoretical valus of the reserves regardless of how discounted the natgas price was . Companies were drilling to maintain landrights . And if they spent 2000 or 2500 per acre( in the states where they are primarily dealing with private landowners ) they had to drill or lose the property . Then along came the liquids plays where the natgas production doesn't matter to the well economics but does collateral damage to natgas prices .
There are thousands of natgas wells in the states which haven't been piped in yet so thats a hangover to natgas prices . But the bright side is that as soon as the drilling stops depletion in the shale gas wells will reduce natgas supply faster than it did before . The typical multifrac dry shale well comes on at 10 mmscfd and is down to 3 mmscfd in a year . Supposedly the well levels off to 1.5 mmscfd for many years . Another factor is that although shale properties are a lot more consistent than conventional plays there are still sweet spots in the shale plays . And with natgas economics the way they are and geology the way it is they are finding the best plays and milking them for all they're worth now . The same way ten years ago only the best gold deposits were being mined .
I wouldn't place a bet on when the turnaround will happen . Theres weather , the anti-fracking lobby ( which Obama and his administration is almost stupid enough to support ) to worry about . But I'm sure it will be in less than 2 years . And when it does these LNG plants they're building , in the States , not Canada , will look as silly as the LNG import terminals they were building 5 years ago .
regards
G