Michael Zenker, head of CERA’s North America Natural Gas Service, said liquefied natural gas (LNG) was expected to bring prices down in 2008-2009, if new LNG receiving terminals were operating.

Dozens of terminals have been proposed but only one is under construction. [There are only four operational LNG terminals in the US, and even those are under fierce local scrutiny—the NIMBY problem.]

“New LNG facilities are not guaranteed, and if they are delayed, gas prices could continue their upward trajectory beyond 2007,” CERA warned.

The study advises that policy responses be implemented quickly, noting that they must have an impact on the market within the next five years to be most effective.

The options identified include reducing demand for natural gas by encouraging the use of other less environmentally friendly fuels, promoting conservation, and encouraging new supply sources.

Since natural gas is increasingly being used as a fuel for power generation, that last recommendation puts power-generation back in the domain of coal—with its attendant emissions problems. It also raises very troubling prospects for a fuel that was increasingly being looked to as a bridge to hydrogen.

The report also speaks to the reality of making changes to the energy infrastructure—i.e., it takes time. If we wait until crises strike, we’ll be backed into bad decisions or Hobbesian choices.

There is an adage that defines insanity as “repeating the same behavior and expecting different results.” Here’s another one: seeing a disaster coming and doing nothing to avoid it. Or perhaps that’s better described as a sure-fire strategy for winning a Darwin award.