Price spikes for natural gas are of particular concern to electric power generators and other large end users. Volatility and price variations are essential mechanisms that send signals to consumers and suppliers to balance the market. The extremes, however, can be destabilizing with very adverse results—and thus the need for "shock absorbers" to reduce the impact of hurricanes or other events that might temporarily disrupt supplies. The newfound expansion of unconventional gas, combined with the expansion of LNG import facilities in the United States and Canada and increased storage, has introduced new supply shock absorbers to respond to disruptions and market imbalances. Past experience of natural gas prices raises a question among large users as to whether relatively more stable prices are at hand, as opposed to the bottom of a cycle. As the giant new shale gas plays are brought into production, end-user confidence in the long-term sustainability of shale gas supply will likely grow.
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