By Simon Miller

The US energy markets will be changed significantly because of shale gas, the former chief executive of BP said today.

Speaking at Resource2012, Lord Browne of Madingley said that the economics of shale gas would lead to market changes in the US as it is an "infinite" resource leading to the country becoming independent of oil by 2012.

"Natural gas is a local market and the price will be depressed for some time," he said. "Oil price is not set by production costs but the needs of the producers."

Browne continued: "[Gas] price is set by the last molecule you got so the price of gas in the US will be much much lower and will change the US energy market place," he said.

Browne dismissed concerns that a flood of cheaper gas would add to the volatility of the market price and commodity market, pointing out that "most oil and gas markets have significant volatility anyway".

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