Inertia and price wars
The original analysis seems spot on to me, though it overlooks one other aspect of the recent history of natural gas production in the face of ever lowering prices. The overlooked aspect is the existential threat to long term profitability that was posed by the "nuclear renaissance" that was widely discussed and in progress during the period from 2005-2009.
By about 2005, after five years of ratcheting increases in the price of natural gas, the nuclear energy industry started to show signs of life. After the passage of the Energy Policy Act of 2005, there was a flood of applications for new projects and many hundreds of millions invested in the early engineering work required to turn those applications into real projects.
In 2008, when the economy collapsed, partially due to ever increasing energy prices and wealth transfers from consumers to oil and gas producers, the price of gas fell dramatically. Almost overnight, the nuclear projects became uneconomical if the now far lower prices for natural gas were projected far out into the future.
I believe that the majors have supported the continued drilling in the US to purposely keep our domestic prices FAR below the world average prices. (Natural gas in Japan is selling for about 5-6 times as much as it is in the US. In Europe the ratio is about 3-4 times the US price.)
The well promoted view is that gas is cheap and will remain cheap forever. That is discouraging the needed investment in nuclear energy - which requires patient and sustained investments in order to bring a very low marginal cost energy production play into operation.
The multinationals can afford to suppress gas prices in the US because they are rolling in cash from international operations and from the 50% or so of their energy output that comes from selling petroleum at the world elevated market price.
