American refiners with unlimited access to world supplies were able to replace lost oil with diversions from Europe, Asia, and the Middle East. If North American natural gas markets are to function with the flexibility exhibited by oil, more extensive access to the vast world reserves of gas is required.
Markets need to be able to adjust effectively to unexpected shortfalls in domestic supply in the same way that they do in oil. Access to world natural gas supplies will require a major expansion of LNG terminal import capacity and the development of the newer offshore re-gasification technologies. Without the flexibility such facilities impart, imbalances in supply and demand must inevitably engender price volatility.