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North American Natural Gas Markets Under LNG Demand Growth and Infrastructure Restrictions

Author

Listed:
  • Baturay Çalci
  • Benjamin D. Leibowicz
  • Jonathan F. Bard

Abstract

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.

Suggested Citation

  • Baturay Çalci & Benjamin D. Leibowicz & Jonathan F. Bard, 2022. "North American Natural Gas Markets Under LNG Demand Growth and Infrastructure Restrictions," The Energy Journal, , vol. 43(2), pages 17-40, March.
    • Handle: RePEc:sae:enejou:v:43:y:2022:i:2:p:17-40
    DOI: 10.5547/01956574.43.2.bcal
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    References listed on IDEAS

    as
    1. Huppmann, Daniel, 2013. "Endogenous production capacity investment in natural gas market equilibrium models," European Journal of Operational Research, Elsevier, vol. 231(2), pages 503-506.
    2. repec:aen:journl:hh-se-a08 is not listed on IDEAS
    3. repec:aen:journl:1986v07-03-a02 is not listed on IDEAS
    4. repec:aen:journl:hh-se-a09 is not listed on IDEAS
    5. Steven A. Gabriel & Supat Kiet & Jifang Zhuang, 2005. "A Mixed Complementarity-Based Equilibrium Model of Natural Gas Markets," Operations Research, INFORMS, vol. 53(5), pages 799-818, October.
    Full references (including those not matched with items on IDEAS)

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