Surge of cheap gas may put coalmines out of action

A price war between liquefied natural gas and coal could lead to the temporary closure of coalmines, according to leading energy consultants, because of a surge in shipments of the gas from the Middle East into Europe and North America.

Gas prices, already tumbling as a result of the recession, are suffering a triple whammy, according to Cambridge Energy Research Associates (Cera): from recession in the Far East; a long-awaited build-up in new supplies of liquefied natural gas (LNG); and unexpected discoveries of new gas reserves in the United States.


The emerging gas glut could even displace coal in the supply of fuel to power stations in Europe, Michael Stoppard, managing director of Cera, said.

In the teeth of a recession, the LNG industry is about to take a big upward step, Mr Stoppard said.