Environmental Engineering Reference
In-Depth Information
Price
Another reason why gas is not making many inroads into oil's share in
the overall energy mix is that gas prices generally tend to rise or fall along
with oil prices. In some markets and sectors, such as power generation
in developing countries, the two fuels compete with each other, and this
seems to keep their prices very roughly in line.
In industrialized countries, the two fuels no longer compete much with
each other (oil being mainly confined to transport, and gas to power). But
in some of these markets, especially in continental Europe, gas and oil are
almost contractually prevented from competing with each other by con-
tracts in which gas prices follow the price of crude or oil products with a
six- or nine-month time lag. However, gas demand is generally more sen-
sitive to price than oil, because substitutes exist for gas in its main use for
power generation, while no real alternative yet exists for oil in transport.
Regional differences and trade
If unconventional gas resources are taken into account, gas resources are
fairly widely spread around the world. But some of these reserves, such
as methane hydrates, may be unexploitable, and there are considerable
disparities between those that can be developed.
Three countries - Russia, Iran and Qatar - hold 56 percent of conven-
tional reserves. Russia has the largest single share (25 percent), but Iran
and Qatar together have 30 percent of world reserves, and a large bubble
of this 30 percent exists in one single field. Stretching across the Gulf, the
Qatari portion is called the North Dome, and the Iranian portion South
Pars. Yet, despite its 40 percent share of reserves, the Middle East accounts
for only 11 percent of production, while at the opposite extreme is North
America, which with only 4.5 percent of conventional reserves is respon-
sible for 26 percent of world gas output.
To some extent, consumption patterns will even out in the years ahead.
So the biggest absolute future increase in gas use is expected to come from
Middle Eastern countries using more of their own gas at home. But they
will also export more. Overall, the gas trade between the major regions of
the world is forecast to nearly double in the next two decades.
Global gas through LNG?
In one sense, liquefied natural gas (LNG) is the solution to the problem of
transporting a gaseous form of energy. Freezing natural gas to minus 163
