The US gets over 80% of its gas from shale. That gas, among other things, fuels 43% of our electricity generation. As far as I can see, everyone thinks the US has an endless supply of it.

The US is an exporter of gas, meaning that when the US has a shortage of gas from falling production, prices will zoom to world prices. A good shorthand is to divide the price of WTI by 6. That will be the new price of gas. At current prices of $102/barrel, that yields about $17/thousand cubic feet. Even back at $55/barrel, that still yields $9/thousand cubic feet.

Currently, the US price for nat gas is $3/thousand cubic feet. We would face a natural gas shock of enormous proportions. A three- to six-fold jump in gas prices is baked into the cake with every new LNG terminal we build. If we simultaneously face an oil shortage, the effects will be mind numbing.