Looking at the following chart Gas prices we can see that while volatile, the gas price is reaching new record heights.

Now I want to refer to some articles: Germany has to decide on gas-to-power plants quickly - grid operator, NGO and Replacing nuclear energy: Engie Electrabel plans four gas plants. These articles tell use that even while the European Union has labeled nuclear energy as green energy, most European countries are still choosing to close their nuclear power plants and to 'temporarily' rely on gas plants until renewable energy sources like solar and wind are efficient enough to fulfill the demand for electricity.

My question is: Counting in the already rising gas prices, and inflation, won't it be the case that if countries are building more gas plants the demand for gas will increase a lot? Because those gas plants need to burn gas. Is that not the same gas the average households use to warm their homes? So, won't countries building more and more gas plants not result in even more rising gas prices for the average person? Because more demand = higher price.


1 Answer 1


If everything else stays constant then increase in demand will lead to increase in prices.

However, in real life everything constantly changes. For example, if gas producers increase production of gas price may even decrease in long-run. There is also still a lot of unexploited natural gas under the ground. The Our World in Data shows that world's natural gas reserves, which show how much untapped natural gas is still under the ground, are during last decade at the all time high (the data show we have more natural gas reserves today than in 1980. The 1980 world gas reserves were 70.89 trillion $m^3$ in 2020 world had 188.07 trillion $m^3$). So there is potential for increasing the production to meet and even outpace demand.

  • $\begingroup$ Thanks for your answer. Would it be a smart move to invest in 'Gas Mining' companies right now? $\endgroup$
    – O'Niel
    Jan 14, 2022 at 8:36
  • 1
    $\begingroup$ @O'Niel smart move is to invest into passive index fund that just tracks average performance of an economy. You never know what happens, what if tomorrow EU will push to phase out gas like coal. Active trading does not make sense unless you have large teams (or enough time) to make some smart algorithms. You also would need lot of money as that would allow you to beat the market by few percentage point. Other than that you are just gambling. Smart move is to just get into passive fund move bit into bonds as you age and get your average 12-13% return per year without any headaches or hard work. $\endgroup$
    – csilvia
    Jan 16, 2022 at 1:50

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