A new report by Wall Street energy-market analyst Sanford Bernstein & Co. finds that gas prices in Asia will double in the next couple of years—with global knock-on effects—thanks to new, oil-linked natural gas pricing policies announced by governments in India and China, two of the world’s biggest, fastest-growing, gas-consuming countries.

The Bernstein report throws cold water on recent, popular notions that world natural gas prices are “decoupling” from oil prices. In fact, just the opposite is happening, according to the new Bernstein report, titled The Era of Cheap Gas Ends.

What’s more, the new China/India pricing policies inevitably will stimulate more exports of liquefied natural gas (LNG) from North America—hence spiking U.S. natural gas prices in the future and further undercutting the “cheap gas forever” claims of U.S. gas industry proponents pushing conversions of diesel engines to LNG or compressed natural gas (CNG).

“The changes announced in the way in which oil and gas prices are set has enormous implications for the energy industry in both countries [China and India],” according to Bernstein.

“Although gas production growth has been impressive in China, India and much of Southeast Asia over the past 10 years, the problem has been the tendency for governments to regulate gas prices at low levels, making natural gas the sideshow to oil.

“While this has been good for gas consumers and downstream distribution companies alike who have enjoyed high margins and strong growth, it has been less good for upstream producers who have enjoyed marginal returns from gas at best.

“This has created a number of problems for the nascent gas industry. Firstly, low domestic gas prices have meant that domestic supply has not kept pace with demand, as producers have been unable to commercialize gas resources at price levels set by governments.

“In India for example, Reliance Industries has over 20 offshore gas discoveries, which remain undeveloped because of artificially low-pricing policies.

“In China, which has the largest reserves of shale gas and tight gas outside of the U.S., development continues to be painfully slow given the weak gas-price environment.

“The second problem is that as demand growth outpaces domestic supply, gas imports into China and India have surged.

“As a result, companies such as PetroChina are hemorrhaging cash subsidizing imports, which would be better spent expanding domestic gas supply. Last year, PetroChina incurred losses of more than $5 billion importing LNG and pipeline gas at international prices and selling at a loss.

“As governments across the Asia-Pacific region are now finding out, if they want to have a sustainable gas industry, [then] gas prices need to move higher, ” according to the report.

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