Politics and Violence" Driving Natural Gas Prices Higher.

Bloomberg today reports that, worldwide, energy companies are shelving new natural gas projects in response to political squabbles and, in some cases, violence. The result, Bloomberg predicts, will be rising natural gas prices borne by the consumer:

Natural gas prices are three times higher than during the 1990s and consumption of the fuel will outpace the 1.6 percent annual gain in energy demand for the next 25 years, according to the International Energy Agency. Gas is also becoming more popular because it emits 29 percent less carbon dioxide than oil and 45 percent less than coal burned in power stations.

``Costs are going up and they're going up far faster than anybody expected,'' said Andy Flower, a U.K.-based consultant to the LNG industry and a former BP Plc executive. He forecasts that the world LNG shortage will last until at least 2011.

Bloomberg notes that this trend is especially evident with LNG:

None of the world's biggest energy companies approved developments last year to increase production of liquefied natural gas, which helps heat homes and run power plants from Tokyo to Boston. The main reason is the cost to build LNG plants has tripled in six years, according to Bechtel Group Inc., the biggest U.S. contractor.

Violence in East Timor, Nigeria, and Iran has held up LNG projects, as has political pressure like the ongoing saga in Malibu.

Chevron, Shell Delay LNG Projects, Sending Gas Higher [Bloomberg]