Fact: coal and nuclear plants in North America are not popular. Fact: building new coal and nuclear plants means high construction costs and increased financial, regulatory and environmental risks. Fact: the U.S. Nuclear Regulatory Commission forecasted 21 new applications to build 32 new reactors within the next two years, and so far has received only four applications for seven new reactors. Fact: Wall Street is not rushing to help finance the building of new coal and nuclear plants. Potential result: natural gas could win the energy race simply by default, and become more expensive in the process.

Why? For starters, building a natural gas plant costs much less and it is much easier to do. In addition, natural gas is much more environment friendly, as it contains about half the harmful carbon emissions of coal and it burns cleaner. But the negative aspect of this preference would be higher prices per cubic feet of gas.

Analysts expect this imbalance between the higher demand and flat or lower supply to result not only in higher prices, but also in an increased reliance on imported liquefied natural gas, or LNG for short. Although Canada has its own sources of natural gas, it still also relies heavily on imports, which are mostly transported by ship, just like oil. This leaves us very much exposed to volatilities in the global LNG markets.

There are other problems with LNG. For example, it takes additional energy to transform natural gas into its liquefied form. Moreover, during transportation, certain methane emissions evaporate (it is simply the nature of the beast), resulting in its carbon emissions reading getting closer to that of coal.

And just to illustrate how dangerous the reliance on foreign exporters can be, there is the example of Petro-Canada and TransCanada giving up on building the new LNG terminal in Quebec, following the decision of Russia's Gazprom to cancel the export of fuel from the Baltic Sea and focus more on the Arctic Ocean and the Nord Stream pipeline to Germany.

Analysts still believe that LNG is a viable option for increasing the supply of natural gas; however, the concern is that LNG is not going to be sufficient to meet the globally increasing demand for natural gas. This is why the Ontario Power Authority is working hard on at least doubling the number of new natural gas plants within the next 10 years. What could help alleviate the price pressures would be designing a more diversified energy mix, focusing perhaps more on nuclear energy than on fossil fuels. But that kind of thinking still needs to be developed.

In any event, this little story about natural gas is likely to have a two-fold impact. From a consumer's point of view, Canadians should get prepared to take another hit on their wallets, as the imbalance between demand and supply keeps pushing prices of natural gas higher. And from an investor's point of view, it may be time to give producers and distributors of natural gas a second look.