The World Gas Market in 2030: Development Scenarios Using the World Gas Model

25 Pages Posted: 1 Nov 2009

See all articles by Daniel Huppmann

Daniel Huppmann

International Institute for Applied Systems Analysis (IIASA)

Ruud Egging

SINTEF Technology and Society

Franziska Holz

German Institute for Economic Research (DIW Berlin)

Sophia Ruester

European University Institute - Florence School of Regulation

Christian von Hirschhausen

German Institute for Economic Research (DIW Berlin) - Department of International Economics

Steven Gabriel

Department of Mechanical Engineering and Applied Mathematics, Statistics, and Scientific Computation Program, University of Maryland

Date Written: October 2009

Abstract

In this paper, we discuss potential developments of the world natural gas industry at the horizon of 2030. We use the World Gas Model (WGM), a dynamic, strategic representation of world natural gas production, trade, and consumption between 2005 and 2030. We specify a "base case" which defines the business-as-usual assumptions based on forecasts of the world energy markets. We then analyze the sensitivity of the world natural gas system with scenarios: i) the emergence of large volumes of unconventional North American natural gas reserves, such as shale gas; ii) on the contrary, tightly constrained reserves of conventional natural gas reserves in the world; and iii) the impact of CO2-constraints and the emergence of a competing environmental friendly "backstop technology". Regional scenarios that have a global impact are: iv) the full halt of Russian and Caspian natural gas exports to Western Europe; v) sharply constrained production and export activities in the Arab Gulf; vi) heavily increasing demand for natural gas in China and India; and finally vii) constraints on liquefied natural gas (LNG) infrastructure development on the US Pacific Coast. Our results show considerable changes in production, consumption, traded volumes, and prices between the scenarios. Investments in pipelines, LNG terminals and storage are also affected. However, overall the world natural gas industry is resilient to local disturbances and can compensate local supply disruptions with natural gas from other sources. Long-term supply security does not seem to be at risk.

Keywords: Natural gas, investments, reserves, climate policy

Suggested Citation

Huppmann, Daniel and Egging, Ruud and Holz, Franziska and Ruester, Sophia and von Hirschhausen, Christian and Gabriel, Steven, The World Gas Market in 2030: Development Scenarios Using the World Gas Model (October 2009). DIW Berlin Discussion Paper No. 931, Available at SSRN: https://ssrn.com/abstract=1496816 or http://dx.doi.org/10.2139/ssrn.1496816

Daniel Huppmann

International Institute for Applied Systems Analysis (IIASA) ( email )

Schlossplatz 1
Laxenburg, A-2361
Austria

Ruud Egging

SINTEF Technology and Society ( email )

Norway

Franziska Holz (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Sophia Ruester

European University Institute - Florence School of Regulation ( email )

FRS/EUI
Via Boccaccio 151
Florence, 50133
Italy

HOME PAGE: http://www.sophia-ruester.de

Christian Von Hirschhausen

German Institute for Economic Research (DIW Berlin) - Department of International Economics ( email )

Mohrenstra├če 58
Berlin, 10117
Germany
+49-30-89789-343 (Phone)
+49/30/897 89 -200 (Fax)

Steven Gabriel

Department of Mechanical Engineering and Applied Mathematics, Statistics, and Scientific Computation Program, University of Maryland ( email )

1143 Glenn L. Martin Hall
College Park, MD 20742-3021
United States

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