The Shale Gas Revolution Is Dead … Here’s What To Do Now

It’s difficult to look beyond bitcoin and MicroStrategy (NASDAQ:MSTR) at the moment, the later in particular. Nobody expected this, not even Chairman Michael Saylor. The returns have been astonishing. A couple of readers have reported to me that the gains have been life-changing. Wow! What an email to receive.

It’s easy to get hubristic when you have a big win. Instead, let us express gratitude for the good fortune that has smiled upon us.

But look beyond we must, and so today I want to look at what I can only describe as a stealth bull market – natural gas. The price is creeping up, and few are talking about it.

Natural gas is a bit like silver: if it can disappoint, it will. So we begin this piece with that reminder. Natural gas has broken the soul of many a wiser man than me.

On the other hand, the next five years look pretty positive.

It’s obvious that the world is going to go nuclear now, and that Small Modular Reactors (SMRs) are going to provide the power AI so badly needs. However, it will be a good five years before they on stream, so what is going to provide the power in the interim?

The answer is natural gas.

There is a problem, however: Supply.

America’s Gas Wells Are Drying Up

The North American Shale Gas Revolution dramatically changed the outlook for fossil fuels. Peak Oil was a huge theme leading up to the Global Financial Crisis, and then it disappeared, almost overnight.

Between 2005 and 2020, US natural gas production grew by 90%, with shale accounting for the bulk of it. In 2005, shale gas made up about 5% of US natural gas production; by 2020, it was over 75%. By 2017, the US had become a net exporter, especially of more transportable liquefied natural gas (LNG).

The price, meanwhile, plummeted. Good for consumers!

Here’s the long-term chart so you can see those price declines since 2005. From almost $16 to $3.50 today (as low as $1.50 earlier this year, where it has formed an attractive double bottom – you know how I like those).

Obviously, we in the UK and Europe pay way more for our natural gas than they do in North America. It’s so dumb; we have enough to supply ourselves in the UK. But we don’t because fracking is deemed environmentally damaging. So we import gas from abroad, which is produced by, you guessed it, fracking. I guess if it is fracked somewhere else, it’s less harmful. Not

Then there are the transport costs and the environmental costs that come with that.

Anyway …

Spanning Ohio, New York, West Virginia, and Pennsylvania, Marcellus is the largest natural gas-producing field in the United States, contributing over 25% of production. In 2010, output was 2 billion cubic feet per day (bcf/d). By 2023, it exceeded 35 bcf/d, but production has been falling for almost a year now. We are currently at 26.7 bcf/d

The next largest is Haynesville, in Louisiana, Texas, and parts of Arkansas. Extraction costs here are higher, and production stands at 16 bcf/d, but it is slowing here too, according to analysts Goehring & Rozencwajg.

One of the few areas of growth is the Permian Basin, in Texas and New Mexico, currently around 23 bcf/d, but even there, growth is modest.

Now, it might be that the reason for stagnating growth is low prices – they often are – and higher prices will result in increased production. They usually do. That is the way with commodities.

But natural gas prices have already doubled this year, and they keep on creeping up.

The other interpretation is that the North American Shale Gas Revolution has passed its peak.

With America’s new president, you can expect plenty more investment in production than under the Democrats, and that should bring the price down, but the gas price has actually risen – from $2.70 to $3.50 – since the election.

It might also be that Russian gas taps come back online to the EU sometime next year, which means America will lose its new market.

But all of this conjecture is factored into the price. And that is rising.

Dominic Frisby ~~ The Flying Frisby

It’s easy to get hubristic when you have a big win. Instead, let us express gratitude for the good fortune that has smiled upon us.

But look beyond we must, and so today I want to look at what I can only describe as a stealth bull market – natural gas. The price is creeping up, and few are talking about it.

Natural gas is a bit like silver: if it can disappoint, it will. So we begin this piece with that reminder. Natural gas has broken the soul of many a wiser man than me.

On the other hand, the next five years look pretty positive.

The answer is natural gas.

There is a problem, however: Supply.

America’s Gas Wells Are Drying Up

The price, meanwhile, plummeted. Good for consumers!

Then there are the transport costs and the environmental costs that come with that.

Anyway …

One of the few areas of growth is the Permian Basin, in Texas and New Mexico, currently around 23 bcf/d, but even there, growth is modest.

Now, it might be that the reason for stagnating growth is low prices – they often are – and higher prices will result in increased production. They usually do. That is the way with commodities.

But natural gas prices have already doubled this year, and they keep on creeping up.

The other interpretation is that the North American Shale Gas Revolution has passed its peak.

It might also be that Russian gas taps come back online to the EU sometime next year, which means America will lose its new market.

But all of this conjecture is factored into the price. And that is rising.

Dominic Frisby ~~ The Flying Frisby

Our forecast will feel obvious in hindsight and controversial in advance — the hallmark of a Grey Swan.

Most analysts we speak to are thinking in terms of the history of Western conflict.

They expect full-frontal military engagement.

Beijing, from our modest perch, prefers resolution because resolution compounds its power. Why sacrifice the workshop of the world, when cajoling and bribery will do?

Taiwan will not fall.

It will merge.

Wars, technology races, and political upheavals — all of them rest on fiscal capacity.

In 2026, that capacity will tighten across the developed world simultaneously. Democracies will discover that generosity financed by debt carries conditions, whether voters approve of them or not.

Bond markets will not shout so much as clear their throats. Repeatedly.

Taken together, the seven Grey Swans of 2025 behaved less like isolated events and more like interlocking stories readers already recognize.

The year moved in phases. A sharp April selloff cleared leverage quickly. Policy shifted toward tax relief, lighter regulation, and renewed tolerance for liquidity. Innovations began to slowly dominate the marketplace conversation – from Dollar 2.0 digital assets to AI-powered applications in all manner of commercial enterprises, ranging from airline and hotel bookings to driverless taxis and robots.

Back in April, when we published what we called the Trump Great Reset Strategy, we described the grand realignment we believed President Trump and his acolytes were embarking on in three phases.

At the time, it read like a conceptual map. As the months passed, it began to feel like a set of operating instructions written in advance of turbulence.

As you can expect, any grandiose plan would get all kinds of blowback… but this year exhibited all manner of Trump Derangement Syndrome on top of the difficulty of steering a sclerotic empire clear of the rocky shores.

The “phases” were never about optimism or pessimism. They were about sequencing — how stress surfaces, how systems adapt, and what must hold before confidence can regenerate. And in the end, what do we do with our money?!