Spot prices of natural gas topped $3.72 per million Btu last week – the highest in two months – following the U.S. Energy Department’s weekly storage report that showed a tighter supply vs demand scenario.

The Natural Gas Storage Report, updated weekly by the Energy Information Administration (EIA) since 2002 – includes summaries on natural gas market prices and storage reserves estimates.

As the greater Middle-East undergoes profound Islamic awakening and political turmoil, energy prices are expected to remain high in the coming years.

United States and Europe have been excruciatingly slow to wean themselves away from addiction to Middle-Eastern energy supplies, and the current reserves in 48 contiguous states amount to 3.299 trillion cubic feet, down 187 billion cubic feet (5.4%) from last year’s level.

Production from shale using latest technological breakthroughs including combination of horizontal drilling and hydraulic fracturing have not yet brought North American energy outlook to the promised land.

Rising economies, led by China, the 800-lb gorilla of East-Asia, have made certain that global demand for natural gas will remain high and supplies will remain tight for decades to come.

According to British Petroleum’s latest statistical review of global energy, proven global natural gas reserves stood at 187.3 trillion cubic metres, sufficient to meet only 55.7 years of production, due to population explosion in Asia and Africa.

The world population is more than 7 Billion, with Asia producing 74 million births, or two Canadas each year.

Middle-East has the highest reserves to production ratio, with vast supplies locked under the hostile territory of Islamic Republic of Iran as well as the more friendly Arab Gulf States including Qatar, United Arab Emirates and Saudi Arabia.

If the monarchies of natural gas rich Sunni States are destabilized or toppled by Islamic Jihadis in next 10-15 years, the entire energy sector will turn on its head. Natural gas and oil prices will explode to levels never seen before.

The American economy and the US dollar, already under powerful assault from China and greater East-Asia, will be mortally wounded. To safeguard American people’s future, domestic energy supplies must be expeditiously sought, and relationship with Russia, a natural ally in the fight against global terror must be repaired.

Let prices of natural gas fluctuate naturally, but US policymakers must make sure that supply of energy exceeds demand to keep American manufacturing costs competitive and household bills tolerable.

[image from BP Statistical Review]