Search

Strong liquefied natural gas (LNG) demand growth, especially in Asia, could increasingly motivate gas infrastructure development in North America. Nevertheless, opposition to new gas infrastructure is formidable in some of the U.S. states and Canadian provinces that are well positioned to supply LNG to the Asian market. In this paper, we investigate the combined effects of LNG demand growth and export infrastructure restrictions on North American natural gas markets through 2050. To do so, we build a mixed complementarity model with endogenous capacity investments. It is parameterized using publicly available data sources. Our results show that even if new export terminals cannot be constructed on the West Coast, LNG exports largely shift to other regions rather than suffer an overall decline. Increasing external demand for LNG puts upward pressure on regional prices in North America, and directs production and pipeline flows toward the regions that export LNG. [ABSTRACT FROM AUTHOR]

The increase in liquefied natural gas trade has accelerated the integration of previously segmented markets in North America, Europe, and Asia. This paper provides evidence on the integration of the transatlantic natural gas market; it thus complements other papers in the EMF 23 study that focus on prices and international natural gas trade. We test the theoretical proposition that in integrating markets commodity prices should move closer than before. Using 2,059 pairs of daily spot prices for natural gas in North America and Europe we investigate price dynamics covering the period from 1999 until 2008. We apply the Kalman Filter technique which measures convergence by allowing for dynamic structural change to gain detailed information on trends inherent in prices over time. Results suggest an increasing convergence of spot prices on either side of the Atlantic Basin. [ABSTRACT FROM AUTHOR]

This paper presents results of simulating a more collusive behavior of a group of natural gas producing and exporting countries, sometimes called GASPEC. We use the World Gas Model, a dynamic, strategic representation of world gas production, trade, and consumption between 2005 and 2030. In particular, we simulate a closer cooperation of the GASPEC countries when exporting pipeline gas and liquefied natural gas; we also run a more drastic scenario where GASPEC countries deliberately hold back production. The results show that compared to our Base Case, a gas cartel would reduce total supplied quantities and induce price increases in gas importing countries up to 22%. There is evidence that the natural gas markets in Europe and North America would be affected more than other parts of the world. Lastly, the vulnerability of gas importers worldwide is further illustrated by the results of a sensitivity case in which price levels are up to 87% higher in Europe and North America. [ABSTRACT FROM AUTHOR]

The extent to which future United States demand for natural gas is satisfied by imports of LNG is contingent on the adequacy and cost competitiveness of North American supplies. One of the cheaper and more important sources of natural gas supply is accounted for by reserve appreciation, i.e., reserve growth, in known fields. Based on an extensively applied methodology developed by Arrington (1960), the increase in proved ultimate recovery is presumed to increase at a diminishing rate with the age of the field. In this paper, a single equation model of natural gas reserve growth in the Gulf of Mexico is developed and estimated. The results strongly suggest that the annual growth rate in the reserves of afield is significantly affected by initial discovery size, price, water depth, and unobserved field-specific effects. Hence, estimating oil and gas reserve growth using an Arrington based approach may underestimate the response of reserve growth to changes in economic fundamentals. [ABSTRACT FROM AUTHOR]

We explore the relationships among the North American, European and Asian natural gas markets for evidence of convergence and integration for the January 1997 through May 2011 period. The analyses are conducted under a multivariate framework, so the dynamics among the prices can be captured without the necessity of identifying an anchor price series. We find evidence of convergence among the Japanese, Korean, Taiwanese and UK prices. The North American price displays behaviour that is distinct from this group of prices. We conclude that there is not a fully integrated international natural gas market. The integration between European (represented by NBP) and Asian geographic regions appears to be due primarily to underlying contractual mechanisms specifically linking natural gas prices to oil prices rather than the result of market supply and demand interactions. We also find that the relationship among the Asian markets has evolved with Japanese prices adjusting to changes in South Korean and Taiwanese prices. [ABSTRACT FROM AUTHOR]

Analyzes the degree of price convergence in North American natural gas spot markets. Application of a time-varying parameter analysis; Theory and empirical methodology; Cointegration, convergence and Kalman Filter; Unit root and cointegration results.

By 1993, refining capacity in Western Europe and North America was about in line with demand. The massive surplus in capacity evident in the early 1980s had been eliminated by reductions in capacity and increases in demand. This rebalancing, together with changes in the structure of crude pricing have laid the basis for a more sound economic performance than has been the case hitherto. Against this background there is a substantial investment requirement in the coming years, both positive, to take account of new business opportunities, and negative, needed just to stay in business. These latter investments stem from environmental legislation, tightening the specifications required both for finished products and operations of refineries. These requirements, coming on top of the poor profit performance of the last ten years have led to continued rationalisation by the industry despite evidence of emerging bottlenecks. [ABSTRACT FROM AUTHOR]

Discusses the liberalization of trade in Mexico due to the North American Free Trade Agreement. Changes in Mexico's petrochemical sector; Increase of capital flows and productivity; Adjustment of domestic regulations; Trade regime for the Mexican petrochemical industry.

Discusses the environmental aspects of the North American Free Trade Agreement (NAFTA). Rate and efficiency of resource extraction brought about by the increased level of activity in industries; Standardization of environmental policies among nations at different levels of economic development.

Discusses the restructuring of Mexico's economic policies to facilitate the North American Free Trade Agreement's (NAFTA) programs. Limited success of NAFTA in the absence of reforms in the energy industry; Government policies on law and energy.

Presents several simulations of oil and gas trade between Canada and the United States if the North American Free Trade Agreement (NAFTA) had been implemented before the oil price shock of 1973. Substantial additional exports of Canadian oil giving the United States bargaining power; Dampening effect to oil price.

Presents developments in Latin America's oil industry. Impact of the Free Trade Agreement between Canada and the United States and the North American Free Trade Agreement; Shifts toward liberal and privatized trade investment; Factors contributing to substantial restructuring and downsizing in major companies.

Presents criticisms on the North American Free Trade Agreement's failure to increase accessibility to Mexico's hydrocarbon reserves. Decrease in potential consumer welfare; Impact on the world market; Effect on future levels and prices; Need for foreign investment in Mexican energy.

Discusses the evolution of natural gas trade in Canada, Mexico and the United States from 1967 to 1972. Provisions of the North American Free Trade Agreement (NAFTA) affecting natural gas trade; Impact of deregulation policies on cross-border trade.

Summarizes the research by the Ninth Energy Modeling Forum (EMF) working group which focused on the evolution of the North American natural gas market through 2010. Standardized scenarios on the natural gas market; Insights developed about the gas market's development under these scenarios; Factors that will affect the usage and price of gas in the future.