IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v37y2009i4p1518-1528.html
   My bibliography  Save this article

The development of natural gas supply costs to Europe, the United States and Japan in a globalizing gas market--Model-based analysis until 2030

Author

Listed:
  • Lochner, Stefan
  • Bothe, David

Abstract

Quickly declining natural gas reserves in some parts of the world, increasing demand in today's major gas consuming regions, the emergence of new demand centres and the globalization of natural gas markets caused by the rising importance of liquefied natural gas (LNG) are changing global gas supply structures and will continue to do so over the next decades. Applying a global gas market model, we produce a forecast for global gas supply to 2030 and determine the supplier-specific long-run average costs of gas supplied to three major consuming regions. Results for the three regions are compared and analysed with a focus on costs, supply diversification and the different roles of LNG. We find that while European and Japanese external gas supply will be less diversified in international comparison, gas can be supplied at relatively low costs due to the regions' favourable locations in geographic proximity to large gas producers. The US market's supply structure on the other hand will significantly change from its current situation. The growing dependency on LNG imports from around the world will lead to significantly higher supply costs but will also increase diversification as gas will originate from an increasing number of LNG exporting countries.

Suggested Citation

  • Lochner, Stefan & Bothe, David, 2009. "The development of natural gas supply costs to Europe, the United States and Japan in a globalizing gas market--Model-based analysis until 2030," Energy Policy, Elsevier, vol. 37(4), pages 1518-1528, April.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:4:p:1518-1528
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(08)00756-8
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Holz, Franziska & von Hirschhausen, Christian & Kemfert, Claudia, 2008. "A strategic model of European gas supply (GASMOD)," Energy Economics, Elsevier, vol. 30(3), pages 766-788, May.
    2. Akimoto, Keigo & Tomoda, Toshimasa & Fujii, Yasumasa & Yamaji, Kenji, 2004. "Assessment of global warming mitigation options with integrated assessment model DNE21," Energy Economics, Elsevier, vol. 26(4), pages 635-653, July.
    3. Knut Einar Rosendahl & Eirik Lund Sagen, 2009. "The Global Natural Gas Market: Will Transport Cost Reductions Lead to Lower Prices?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 17-40.
    4. Perner, J. & Seeliger, A., 2004. "Prospects of gas supplies to the European market until 2030--results from the simulation model EUGAS," Utilities Policy, Elsevier, vol. 12(4), pages 291-302, December.
    5. Remme, Uwe & Blesl, Markus & Fahl, Ulrich, 2008. "Future European gas supply in the resource triangle of the Former Soviet Union, the Middle East and Northern Africa," Energy Policy, Elsevier, vol. 36(5), pages 1622-1641, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lochner, Stefan, 2011. "Identification of congestion and valuation of transport infrastructures in the European natural gas market," Energy, Elsevier, vol. 36(5), pages 2483-2492.
    2. van Goor, Harm & Scholtens, Bert, 2014. "Modeling natural gas price volatility: The case of the UK gas market," Energy, Elsevier, vol. 72(C), pages 126-134.
    3. Goncharuk, Anatoliy G. & Storto, Corrado lo, 2017. "Challenges and policy implications of gas reform in Italy and Ukraine: Evidence from a benchmarking analysis," Energy Policy, Elsevier, vol. 101(C), pages 456-466.
    4. Vitor Miguel Ribeiro & Gustavo Soutinho & Isabel Soares, 2023. "Natural Gas Prices in the Framework of European Union’s Energy Transition: Assessing Evolution and Drivers," Energies, MDPI, vol. 16(4), pages 1-46, February.
    5. Capece, Guendalina & Cricelli, Livio & Di Pillo, Francesca & Levialdi, Nathan, 2012. "New regulatory policies in Italy: Impact on financial results, on liquidity and profitability of natural gas retail companies," Utilities Policy, Elsevier, vol. 23(C), pages 90-98.
    6. Mel Devine & James Gleeson & John Kinsella & David Ramsey, 2014. "A Rolling Optimisation Model of the UK Natural Gas Market," Networks and Spatial Economics, Springer, vol. 14(2), pages 209-244, June.
    7. Wang-Helmreich, Hanna & Lochner, Stefan, 2011. "Natural Gas in Road Transportation - A Low-emission Bridging Technology?," EWI Working Papers 2011-14, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    8. Dieckhöner, Caroline & Lochner, Stefan & Lindenberger, Dietmar, 2013. "European natural gas infrastructure: The impact of market developments on gas flows and physical market integration," Applied Energy, Elsevier, vol. 102(C), pages 994-1003.
    9. Monforti, F. & Szikszai, A., 2010. "A MonteCarlo approach for assessing the adequacy of the European gas transmission system under supply crisis conditions," Energy Policy, Elsevier, vol. 38(5), pages 2486-2498, May.
    10. Kirat, Yassine, 2021. "The US shale gas revolution: An opportunity for the US manufacturing sector?," International Economics, Elsevier, vol. 167(C), pages 59-77.
    11. Yassine Kirat, 2021. "The US shale gas revolution: An opportunity for the US manufacturing sector?," Post-Print hal-03676616, HAL.
    12. Guo, Yingjian & Hawkes, Adam, 2019. "Asset stranding in natural gas export facilities: An agent-based simulation," Energy Policy, Elsevier, vol. 132(C), pages 132-155.
    13. Crow, Daniel J.G. & Giarola, Sara & Hawkes, Adam D., 2018. "A dynamic model of global natural gas supply," Applied Energy, Elsevier, vol. 218(C), pages 452-469.
    14. Steven Brakman & Charles van Marrewijk & Arjen van Witteloostuijn & Charles van Marrewijk, 2009. "Market Liberalization in the European Natural Gas Market - The Importance of Capacity Constraints and Efficiency Differences," CESifo Working Paper Series 2697, CESifo.
    15. Mahdi Fasihi & Dmitrii Bogdanov & Christian Breyer, 2017. "Long-Term Hydrocarbon Trade Options for the Maghreb Region and Europe—Renewable Energy Based Synthetic Fuels for a Net Zero Emissions World," Sustainability, MDPI, vol. 9(2), pages 1-24, February.
    16. Anatoliy G. Goncharuk, 2014. "Losers and Beneficiaries from the Growth of Natural Gas Prices," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 3(2), pages 117-126.
    17. Dong, Kangyin & Sun, Renjin & Wu, Jin & Hochman, Gal, 2018. "The growth and development of natural gas supply chains: The case of China and the US," Energy Policy, Elsevier, vol. 123(C), pages 64-71.
    18. Eser, P. & Chokani, N. & Abhari, R., 2019. "Impact of Nord Stream 2 and LNG on gas trade and security of supply in the European gas network of 2030," Applied Energy, Elsevier, vol. 238(C), pages 816-830.
    19. Senderov, Sergey M. & Smirnova, Elena M. & Vorobev, Sergey V., 2020. "Analysis of vulnerability of fuel supply systems in gas-consuming regions due to failure of critical gas industry facilities," Energy, Elsevier, vol. 212(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mel Devine & James Gleeson & John Kinsella & David Ramsey, 2014. "A Rolling Optimisation Model of the UK Natural Gas Market," Networks and Spatial Economics, Springer, vol. 14(2), pages 209-244, June.
    2. Ibrahim Abada, 2012. "A stochastic generalized Nash-Cournot model for the northwestern European natural gas markets with a fuel substitution demand function: The S-GaMMES model," Working Papers 1202, Chaire Economie du climat.
    3. Möst, Dominik & Perlwitz, Holger, 2009. "Prospects of gas supply until 2020 in Europe and its relevance for the power sector in the context of emission trading," Energy, Elsevier, vol. 34(10), pages 1510-1522.
    4. Gijsbert Zwart & S. Ikonnikova, 2010. "Reinforcing buyer power: Trade quotas and supply diversification in the EU natural gas market," CPB Discussion Paper 147, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Sziklai, Balázs R. & Kóczy, László Á. & Csercsik, Dávid, 2020. "The impact of Nord Stream 2 on the European gas market bargaining positions," Energy Policy, Elsevier, vol. 144(C).
    6. Anne Neumann & Juan Rosellón & Hannes Weigt, 2015. "Removing Cross-Border Capacity Bottlenecks in the European Natural Gas Market—A Proposed Merchant-Regulatory Mechanism," Networks and Spatial Economics, Springer, vol. 15(1), pages 149-181, March.
    7. Ibrahim Abada & Steven Gabriel & Vincent Briat & Olivier Massol, 2013. "A Generalized Nash–Cournot Model for the Northwestern European Natural Gas Markets with a Fuel Substitution Demand Function: The GaMMES Model," Networks and Spatial Economics, Springer, vol. 13(1), pages 1-42, March.
    8. Balazs Sziklai & Laszlo A. Koczy & David Csercsik, 2018. "The geopolitical impact of Nord Stream 2," CERS-IE WORKING PAPERS 1821, Institute of Economics, Centre for Economic and Regional Studies.
    9. Villada, Juan & Olaya, Yris, 2013. "A simulation approach for analysis of short-term security of natural gas supply in Colombia," Energy Policy, Elsevier, vol. 53(C), pages 11-26.
    10. Gabriel, S.A. & Rosendahl, K.E. & Egging, Ruud & Avetisyan, H.G. & Siddiqui, S., 2012. "Cartelization in gas markets: Studying the potential for a “Gas OPEC”," Energy Economics, Elsevier, vol. 34(1), pages 137-152.
    11. Massol, Olivier & Tchung-Ming, Stéphane, 2010. "Cooperation among liquefied natural gas suppliers: Is rationalization the sole objective?," Energy Economics, Elsevier, vol. 32(4), pages 933-947, July.
    12. Chyong, Chi Kong & Hobbs, Benjamin F., 2014. "Strategic Eurasian natural gas market model for energy security and policy analysis: Formulation and application to South Stream," Energy Economics, Elsevier, vol. 44(C), pages 198-211.
    13. Lochner, Stefan, 2011. "Identification of congestion and valuation of transport infrastructures in the European natural gas market," Energy, Elsevier, vol. 36(5), pages 2483-2492.
    14. Brkić, Dejan & Tanasković, Toma I., 2008. "Systematic approach to natural gas usage for domestic heating in urban areas," Energy, Elsevier, vol. 33(12), pages 1738-1753.
    15. Youngho Chang & Yanfei Li, . "An Integrated Asian Natural Gas Market: Potentials and Policy Implications," Chapters,, Economic Research Institute for ASEAN and East Asia (ERIA).
    16. repec:ntu:ntugeo:vol2-iss1-14-005 is not listed on IDEAS
    17. Devine, Mel T. & Russo, Marianna, 2019. "Liquefied natural gas and gas storage valuation: Lessons from the integrated Irish and UK markets," Applied Energy, Elsevier, vol. 238(C), pages 1389-1406.
    18. Megy, Camille & Massol, Olivier, 2023. "Is Power-to-Gas always beneficial? The implications of ownership structure," Energy Economics, Elsevier, vol. 128(C).
    19. Franziska Holz, Christian von Hirschhausen and Claudia Kemfert, 2009. "Perspectives of the European Natural Gas Markets Until 2025," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 137-150.
    20. Egging, Ruud & Pichler, Alois & Kalvø, Øyvind Iversen & Walle–Hansen, Thomas Meyer, 2017. "Risk aversion in imperfect natural gas markets," European Journal of Operational Research, Elsevier, vol. 259(1), pages 367-383.
    21. Peixiang Jiang & Chao Ding & Zhiliang Dong & Sen Liu & Yichi Zhang, 2022. "Research on the Trade Characteristics of Conventional Energy Network Countries: Based on the Trade Characteristics of Leading Countries," Sustainability, MDPI, vol. 14(24), pages 1-18, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:37:y:2009:i:4:p:1518-1528. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.