An increasing amount of liquefied natural gas being imported into the United States and new shale deposits resulting in cheap natural gas supplies have reduced the need to develop gas in the Arctic, potentially pushing back the need to use Arctic gas by 15 years, according to pipeline executive Steve Letwin.

Mr. Letwin, executive vice-president of gas transportation and international with Canada’s Enbridge, Inc., says that North America’s natural gas industry is “overbuilt”, explaining the continued weaken prices of gas.

While we faced a long period of time where there was concern about a shortage of gas due to conventional supply sources being used and not replenished, Mr. Letwin says we are now facing the opposite situation with more gas than there is need for.  The reason behind this drastic switch is the recent discovery of 1,200 trillion cubic feet of natural gas that is located in shale deposits, combined with  offshore liquefied natural gas supplies.  The gas found in the shale alone is enough to last us a century.

In an interviewed, Mr. Letwin said, “The biggest issue that we now have is [not enough] demand. And in the absence of demand, you are going to see a price for gas that is going to be kept between US$5 and US$7 for a long time to come.”

And because of this off balance of more supply than demand, Mr. Letwin is not anticipating a need for Arctic natural gas in the near future.  In fact, he said that gas from Alaska and the Mackenzie Delta – the two Arctic locations for a natural gas pipeline – will most likely not be needed until 2025, due not only to the decrease in demand and increase in supply from elsewhere, but due to the high transportation cost of Arctic gas.

“Alaska has 36 tcf of gas, way up in the North. Haynesville [in Louisiana and Texas] has potentially 70 tcf of gas [close to the market], so where are you are going to go?”