Essay On Natural Gas Market

662 Words3 Pages
Executive Summary (not exceeding 150 words) on a separate front page; Natural gas consists of gases existing in layers of sediment in either liquefied or gaseous form. It is a common non-renewable resource used for industrial, residential and commercial purposes. In particular, it is an important energy source for heating buildings, providing power to industry and as fuel for vehicles as well as for generating electricity The natural gas market, however, is in an upturn as recent figures demonstrate – contracted demand higher gas prices. The relationship between demand and supply, which regulates the market price and quantity, are influenced by various factors (any changes in market other than a change in prices) resulting curves to shift – that is, market price and quantity increases or decreases. In this report it will discuss the followings; • Economic patterns of natural gas market in Australia The reasons behind the patterns • Exportation of gas • Increases in network costs • Increase in carbon costs Introduction In recent times, In the case of gas, prices for households and businesses are expected to increase significantly in eastern Australia, as the development of new gas export terminals leads to a tightening of supply. As the tightening of supply in the natural gas industry this result in an increase of the gas price in NSW. These increase of gas price effect on the households and business in NSW especially industrial gas users such as trade-exposed businesses. “Industrial gas users in the eastern states face ‘a doubling or tripling’of wholesale prices, with the impacts to be felt throughout the chemicals, fertilisers, food processing and other sectors”(Mark Goodsell, Australian Industry Gro... ... middle of paper ... ...won’t offer a solution for manufactures in the short to medium term. Regardless of policy settings, There is also a need for governments to help households and businesses transition away from gas that will continue to become more expensive by subsidy to producer to avoid gas exporters turn to a higher profit selling overseas. Figure 2 (Not to scale) our market supply curve has shifted to the RIGHT. At any price the quantity supplied is going to be GREATER than it was relative to "S w/o Subsidy". Conclusion The increase in price of natural gas market was caused by a combination of reasons. Exportation of gas to the Asian market, Increases in network costs and carbon costs. Although supply for gas has raised supply is expected to be decreased in the near future when the development of industrial scale renewable power solutions is essential for manufacturing.

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