As discussed in the Introduction, leading global energy forecasting agencies foresee a bright future for NG. They predict that it will first overtake coal and then oil to become the number one fossil fuel. There is an assumption that this process will occur in the natural course of events and nearly automatically because gas is cleaner than coal and has more long-term reserves than oil. In reality, what has been portrayed as a logical certainty may well not materialize at all. Unfortunately, there is almost no understanding that this prediction of the global mission for NG could fail unless the pricing mechanisms for NG undergo a profound change. The purpose of this book has been to explain the complex process of NG pricing to substantiate the necessity of change in pricing mechanisms to support the future of the NG sector.

The depressed level of pricing of NG is a widespread and observable fact. Low NG prices make the NG industry highly unattractive from an investor's point of view. This further leads to the inability of the NG industry to attract the billions needed for project finance to advance the fortunes of NG in the energy mix of the future. This investment crisis has been exacerbated by greenfocused investment funds that have made the political or policy decision not to invest in fossil fuels and climate action regulations in developed countries.

At the end of June 2020, American NG prices were at their lowest point since 1999 at $1.5/ MMBtu. Asian spot contracts dipped to $2.2/ MMBtu, a mark not broken since 2009. Day-ahead prices in Europe were also the lowest in a decade at $1.7/ MMBtu. That clearly put NG out of money even on a short-run marginal costs basis. My goal in this book is to show that the depressed pricing of NG is not simply the result of oversupply and cannot be fully understood on the basis of the state of market equilibrium. The extent of oversupply does not justify the extreme depth of the price plunge. Even on perfectly balanced markets, NG prices tend to be below the Pareto-optimal level. When supply outpaces demand, already low prices are pushed even further lower.