Michael J. Bradshaw - Natural Gas

Anthony Burke, Uranium

Peter Dauvergne & Jane Lister, Timber

Kate Ervine, Carbon

Andrew Herod, Labor

Kristy Leissle, Cocoa

Michael Nest, Coltan

Elizabeth R. DeSombre & J. Samuel Barkin, Fish

Jennifer Clapp, Food, 3rd edition

David Lewis Feldman, Water

Gavin Fridell, Coffee

Gavin Bridge & Philippe Le Billon, Oil, 2nd edition

Derek Hall, Land

Kate ONeill, Waste

Bronwyn Parry & Beth Greenhough, Bioinformation

Ben Richardson, Sugar

Ian Smillie, Diamonds

Adam Sneyd, Cotton

Bill Winders, Grains

MICHAEL BRADSHAW AND TIM BOERSMA

polity

Copyright Michael Bradshaw and Tim Boersma 2020

The right of Michael Bradshaw and Tim Boersma to be identified as Authors of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.

First published in 2020 by Polity Press

Polity Press
65 Bridge Street
Cambridge CB2 1UR, UK

Polity Press
101 Station Landing
Suite 300
Medford, MA 02155, USA

All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.

ISBN-13: 978-1-5095-4285-7

A catalogue record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Names: Bradshaw, Michael J. (Michael John), 1935- author. | Boersma, Tim, author.
Title: Natural gas / Michael Bradshaw and Tim Boersma.
Description: Cambridge ; Medford, MA : Polity Press, 2020. | Series: Resources series | Includes bibliographical references and index. | Summary: A compelling analysis of natural gas geopolitics-- Provided by publisher.
Identifiers: LCCN 2019050902 (print) | LCCN 2019050903 (ebook) | ISBN 9780745659978 (hardback) | ISBN 9780745659985 (paperback) | ISBN 9781509542857 (epub)
Subjects: LCSH: Gas industry. | Gas industry--Political aspects. | Natural gas.
Classification: LCC HD9581.A2 B73 2020 (print) | LCC HD9581.A2 (ebook) | DDC 338.2/7285--dc23
LC record available at https://lccn.loc.gov/2019050902
LC ebook record available at https://lccn.loc.gov/2019050903

The publisher has used its best endeavours to ensure that the URLs for external websites referred to in this book are correct and active at the time of going to press. However, the publisher has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain appropriate.

Every effort has been made to trace all copyright holders, but if any have been overlooked the publisher will be pleased to include any necessary credits in any subsequent reprint or edition.

For further information on Polity, visit our website: politybooks.com

ACERAgency for the Cooperation of Energy RegulatorsAPECAsia-Pacific Economic CooperationAPRAsia-Pacific regionbcfbillion cubic feetbcmbillion cubic metresbcmabillion cubic metres per annumBECCSbiomass and CCUSBGRGerman Federal Institute for Geosciences and Natural ResourcesBtuBritish thermal unitCACCentral-Asia-Centre pipelineCBMcoal bed methaneCCGTCombined-Cycle Gas TurbineCCScarbon capture and storageCC(U)Scarbon capture utilization and storageCNGcompressed natural gasCNPCChina National Petroleum CorporationCSGcoal seam gasEIA(US) Energy Information AdministrationENRBureau of Energy Resources (US State Department)EPA(US) Environmental Protection AgencyETSEmissions Trading SystemEUEuropean UnionFIDfinal investment decisionFLNGFloating Liquefied Natural GasFSRUFloating Storage and Regasification UnitGGFRGlobal Gas Flaring Reduction PartnershipGHGgreenhouse gasGIIGNLThe International Group of Liquefied Natural Gas ImportersGTSGasunie Transport Services BVIEAInternational Energy AgencyIMOInternational Maritime OrganizationIOCinternational oil companyIPCCInter-Governmental Panel on Climate ChangeIGUInternational Gas UnionLNGliquefied natural gasLPGliquefied petroleum gasmcf/dmillion cubic feet per daymcm/dmillion cubic metres per dayMENAMiddle East and North AfricaMMBTumillion British thermal unitsMTPAmillion tonnes per annumNBPNational Balancing PointNGLnatural gas liquidNGOnon-governmental organizationNIMBYNot in My Back YardNOCnational oil companyOECDOrganisation for Economic Co-operation and DevelopmentOIESOxford Institute for Energy StudiesONGCOil and National Gas Corporation Limited (India)PGNiGPolskie Grnictwo Naftowe i Gazownictwo (Polish State Oil and Gas Company)ppmparts per millionSMRsteam methane reformingTANAPTrans-Anatolian Natural Gas PipelineTAPTrans-Adriatic PipelineTAPITurkmenistanAfghanistanPakistanIndia Pipelinetcftrillion cubic feettcmtrillion cubic metresTNKTyumen Oil Company (Russia)TSOtransmission system operatorTTFTitle Transfer FacilityUKERCUnited Kingdom Energy Research Centre

Source: BP, BP Statistical Review of World Energy, June 2019. London: BP, 2019.

The global natural gas industry has experienced an unprecedented period of growth and change, best captured by the International Energy Agency (IEA)s 2011 notion of the Golden Age for Gas. When this book was first planned, it was conceived as an antidote to the tendency to lump the gas industry together with oil when considering geopolitics and energy security. We maintain that the materiality of natural gas as an energy source, and thus its geopolitics, is quite different from that of oil. Even today, the majority of natural gas is consumed within the country where it is produced. Until relatively recently, the vast majority of traded natural gas was moved by pipelines it is only in the last decade or so that the growth of liquefied natural gas (LNG) production and trade has taken flight, to the extent that it will likely rival international pipeline trade sometime in the foreseeable future. However, most natural gas is still traded on a regional basis with regional prices and differences in price formation. In Asia, natural gas prices largely remain indexed to the oil price, although that may change due to market pressures, and institutional reform in key gas-consuming countries. In North America, and to a large extent in the EU, gas prices are formed based on gas-on-gas competition and the interplay between supply and demand. But, as this book explains, the status quo is continuously subject to change. Thanks to the expansion of the LNG trade, regional markets are increasingly linked and developments in one region impact on another. Thus, the price of natural gas in Europe is strongly influenced by the strength of demand in Asia (just as the oil price has traditionally played an important role). Investments in natural gas infrastructure are cyclical in nature. Periods of tight supply and high prices stimulate a new round of investment in production, which, depending on how demand responds to lower prices, may result in a period of over-supply and lower prices when new volumes come to market. As demand absorbs that supply and markets tighten, prices increase, stimulating a new round of investments, and so on.

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