In 1967, given the fluidity: In contrast, in 1973, the Arab members of OPEC employed a much more effective tactic; rather than simply embargoing certain countries, they instituted a series of mounting production cuts that drove up prices.
Although the disruptions were minor: For more details on both the 2006 and 2009 crises, see Simon Pirani, Jonathan Stern, and Katja Yafimava, “The Russo-Ukrainian Gas Dispute of January 2009: A Comprehensive Assessment,” (NG 27, Oxford Institute for Energy Studies, Oxford University, Oxford, U.K., February 2009), https://www.oxfordenergy.org/wpcms/wp-content/uploads/2010/11/NG27-TheRussoUkrainianGasDisputeofJanuary2009AComprehensiveAssessment-JonathanSternSimonPiraniKatjaYafimava-2009.pdf.
Although Russia’s decision to cut off gas: During this crisis, at least eleven people froze to death. Dan Bilefsky and Andrew E. Kramer, “Deal to End Russia’s Cutoff of Gas Remains Uncertain,” New York Times, January 09, 2009, www.nytimes.com/2009/01/10/world/europe/10gazprom.html.
At the time, 80 percent: Andrew E. Kramer, “Russia Cuts Gas, and Europe Shivers,” New York Times, January 6, 2009, www.nytimes.com/2009/01/07/world/europe/07gazprom.html?pagewanted=all&_r=0.
So not only did Ukraine: See Aleksander Kovacevic, “The Impact of the Russia-Ukraine Gas Crisis in South Eastern Europe,” (NG 29, Oxford Institute for Energy Studies, Oxford University, Oxford, U.K., March 2009), https://www.oxfordenergy.org/wpcms/wp-content/uploads/2010/11/NG29-TheImpactoftheRussiaUkrainianCrisisinSouthEasternEurope-AleksandarKovacevic-2009.pdf.
Recognizing that the transit of its gas: See Morena Skalamera and Andreas Goldthau, “Russia: Playing Hardball or Bidding Farewell to Europe?,” discussion paper 2016-03, Geopolitics of Energy Project, Belfer Center for Science and International Affairs, Harvard University, Cambridge, MA, June 2016, http://belfercenter.hks.harvard.edu/files/Russia%20Hardball%20-%20Web%20Final.pdf.
Since deregulation of natural gas: For more on the deregulation of U.S. natural gas markets, see Andreij Juris, “Development of Competitive Natural Gas Markets in the United States,” (Note No. 141, Public Policy for the Private Sector, The World Bank Group, April 1998), http://siteresources.worldbank.org/EXTFINANCIALSECTOR/Resources/282884-1303327122200/141juris.pdf.
The fact that, even in 2016: According to the U.S. EIA, transportation consumed 56 percent of all global oil consumption in 2016. “IEO2016: Energy use: Liquids,” U.S. Energy Information Administration, https://www.eia.gov/outlooks/aeo/data/browser/#/?id=15-IEO2016®ion=4-0&cases=Reference&start=2010&end=2040&f=A&linechart=Reference-d021916a.2-15-IEO2016.4-0~Reference-d021916a.26-15-IEO2016.4-0~Reference-d021916a.34-15-IEO2016.4-0~Reference-d021916a.18-15-IEO2016.4-0~Reference-d021916a.10-15-IEO2016.4-0&map=&ctype=linechart&sid=Reference-d021916a.26-15-IEO2016.4-0~Reference-d021916a.34-15-IEO2016.4-0~Reference-d021916a.18-15-IEO2016.4-0~Reference-d021916a.10-15-IEO2016.4-0~Reference-d021916a.2-15-IEO2016.4-0&sourcekey=0.
Anita George, former senior director: Tim Ward, “5 Questions for the World Bank on Ending Routine Gas Flaring and Climate Change,” Huffington Post, December 7, 2015, www.huffingtonpost.com/tim-ward/5-questions-for-the-world_b_8733362.html.
Even as late as 2016: Fred Julander, in-person conversation with the author, Aspen, CO, July 6, 2016.
The agenda of the two leaders: Richard C. Bush, “Shinzo Abe’s Visit to Washington,” Brookings, February 22, 2013, https://www.brookings.edu/blog/up-front/2013/02/22/shinzo-abes-visit-to-washington/.
But amidst a program: See “Abe to ask Obama to boost shale gas exports to Japan,” Japan Times, April 20, 2014, www.japantimes.co.jp/news/2014/04/20/national/politics-diplomacy/abe-to-ask-obama-to-boost-shale-gas-exports-to-japan/#.WVpsQo-cHrg.
In addition, natural gas: “How Much Carbon Dioxide Is Produced When Different Fuels Are Burned?” U.S. Energy Information Administration, June 14, 2016, https://www.eia.gov/tools/faqs/faq.cfm?id=73&t=11.
at least in certain parts of the world: Europe is the notable exception where advocates of natural gas have been unable to persuade policymakers and citizens that natural gas holds unique benefits. See, for instance, Jonathan Stern, “The Future of Gas in Decarbonising European Energy Markets: The need for a new approach” (OIES PAPER: NG 116, The Oxford Institute for Energy Studies, Oxford University, UK, January, 2017), https://www.oxfordenergy.org/wpcms/wp-content/uploads/2017/01/The-Future-of-Gas-in-Decarbonising-European-Energy-Markets-the-need-for-a-new-approach-NG-116.pdf.
President Obama, in his 2014: President Barack Obama, “State of the Union Address,” The White House Office of the Press Secretary, January 28, 2014, https://www.whitehouse.gov/the-press-office/2014/01/28/president-barack-obamas-state-union-address.
Scholars Maximilian Kuhn: Maximilian Kuhn and Frank Umbach, “The Triple ‘A’ Argument for Natural Gas,” International Association for Energy Economics (First Quarter 2012), 34–38, https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwiqjKKNrpXQAhVK2oMKHa5dAUUQFggdMAA&url=https%3A%2F%2Fiaee.org%2Fen%2Fpublications%2Fnewsletterdl.aspx%3Fid%3D160&usg=AFQjCNGa_DV9Yj3wmKkCgK5Bz6nKDX29tg&sig2=YVqXxnMwYJwlWqL-XlCUQQ.
Some industry experts, such as Oklahoma: See Robert Hefner III, “The Age of Energy Gases: The Importance of Natural Gas in Energy Policy,” paper, Aspen Institute’s Aspen Strategy Group conference “The Global Politics of Energy,” Aspen, Colorado, August 3–8, 2007, www.ghkco.com/downloads/ASG-ImportanceofNaturalGasinEnergyPolicy08.07.doc.
In this scenario, the use of natural gas: In this vision of the world in 2035, the IEA anticipates China’s demand for gas rising from roughly equivalent to Germany’s demand in 2010 to be equal to the demand of the whole European Union. Demand for natural gas from the Middle East almost doubles in this time period and India’s quadruples. See International Energy Agency, World Energy Outlook 2011 Special Report: Are We Entering a Golden Age of Gas? (Paris: OECD Publishing, 2011), 7–13, www.worldenergyoutlook.org/media/weowebsite/2011/WEO2011_GoldenAgeofGasReport.pdf.
In the United States, as well as in China: IEA, World Energy Outlook 2011 Special Report, 8.
According to this vision of the future: The scenario perceived as the one most likely to materialize is usually called a “reference case” scenario. For the IEA this most likely scenario is termed the New Policies Scenario. The IEA notes that, in the golden age of gas, “global energy-related CO2 emissions in 2035 are only slightly lower than those in the New Policies Scenario.” Ibid.
In 2012, in its Shale Gas Five-Year Plan: The 2012 Shale Gas Five-Year Plan included targets of producing between 2.1 trillion cubic feet (tcf) to 3.5 tcf of shale gas per year by 2020. David Sandalow et al., “Meeting China’s Shale Gas Goals,” working draft, Center on Global Energy Policy, Columbia School of International and Public Affairs, September 2014, http://energypolicy.columbia.edu/sites/default/files/energy/China%20Shale%20Gas_WORKING%20DRAFT_Sept%2011_0.pdf. This amount would equal roughly 2 percent to 3 percent of the world’s overall natural gas production, or 40–70% of Chinese demand in 2012. “IEO2016: Total natural gas production: Total World,” U.S. Energy Information Administration, November, 2015, https://www.eia.gov/forecasts/aeo/data/browser/#/?id=41-IEO2016®ion=0-0&cases=Reference&start=2010&end=2040&f=A&linechart=Reference-d021916a.47-41-IEO2016&ctype=linechart&sid=Reference-d021916a.47-41-IEO2016&sourcekey=0.
In 2011, Prime Minister: Tusk also anticipated that Poland could be “dependent mainly on our own gas” by 2035. “Commercial Extraction of Shale Gas Possible Already in 2014,” Prime Minister’s Office of Poland, September 18, 2011, https://www.premier.gov.pl/en/news/news/commercial-extraction-of-shale-gas-possible-already-in-2014.html.
Shale gas production boomed: The 2011 IEA report anticipated that, in 2035, the United States would be producing 779 billion cubic meters (27.5 tcf); in fact, the EIA reports that in 2015, U.S. natural gas production had already reached 27.2 tcf. International Energy Agency, World Energy Outlook 2011 Special Report: Are We Entering a Golden Age of Gas?, 27; “Table: Natural Gas Supply, Disposition, and Prices,” U.S. Energy Information
Administration, 2017, www.eia.gov/outlooks/aeo/data/browser/#/?id=13-AEO2017&cases=ref2017&sourcekey=0.
Natural gas seemed nearly ubiquitous: Timothy Puko, “Natural Gas Falls to All-Time Inflation-Adjusted Low,” Wall Street Journal, December 16, 2015, www.wsj.com/articles/natural-gas-dips-below-all-time-inflation-adjusted-low-1450280571.
In mid-2016, the spot price: In October 2005, the Henry Hub spot price was $13.42 per mmbtu; in May 2016, it was $1.92 per mmbtu. “Henry Hub Natural Gas Spot Price,” U.S. Energy Information Administration, November 2, 2016, www.eia.gov/dnav/ng/hist/rngwhhdM.htm.
In 2016, largely as a result: “Electricity Data Browser: Net Generation for All Sectors, Annual,” U.S. Energy Information Administration, https://www.eia.gov/electricity/data/browser/#/topic/0?agg=2,0,1&fuel=vvg&geo=g&sec=g&linechart=ELEC.GEN.ALL-US-99.A~ELEC.GEN.COW-US-99.A~ELEC.GEN.NG-US-99.A&columnchart=ELEC.GEN.ALL-US-99.A&map=ELEC.GEN.ALL-US-99.A&freq=A&start=2008&end=2016&ctype=linechart
Additionally, as a resurgence of cheap coal: See Guy Chazan and Gerrit Wiesmann, “Shale Gas Boom Sparks EU Coal Revival,” Financial Times, February 3, 2013, https://www.ft.com/content/d41c2e8a-6c8d-11e2-953f-00144feab49a.
In the first four years: China and Argentina did reach modest levels of commercial production in 2015. Faouzi Aloulou, “Shale Gas and Tight Oil Are Commercially Produced in Just Four Countries,” U.S. Energy Information Administration, February 13, 2015, www.eia.gov/todayinenergy/detail.cfm?id=19991. According to the EIA, China drilled approximately six hundred shale gas wells and produced 0.5 bcf/d a day of shale gas from 2010 to 2015. Faouzi Aloulou and Victoria Zaretskaya, “Shale Gas Production Drives World Natural Gas Production Growth,” U.S. Energy Information Administration, August 15, 2016, www.eia.gov/todayinenergy/detail.php?id=27512.
Just two years after rolling out: Chen Aizhu, Judy Hua, and Charlie Zhu, “China Finds Shale Gas Challenging, Halves 2020 Output Target,” Reuters, August 7, 2014, www.reuters.com/article/2014/08/07/us-china-shale-target-idUSKBN0G71FX20140807.
Instead, in 2016, talk of an enduring: The IEA’s June 2016 Medium Term Gas Outlook predicted oversupplied natural gas markets for the next several years. International Energy Agency, Medium-Term Gas Market Report 2016 (Paris: OECD Publishing, 2016), http://www.iea.org/bookshop/721-Medium-Term_Gas_Market_Report_2016; the International Gas Union, in 2017, wrote of a “looming LNG supply glut.” International Gas Union, IGU World LNG Report: 2017 Edition (Barcelona: International Gas Union, 2017), 32 and 46, http://www.igu.org/sites/default/files/103419-World_IGU_Report_no%20crops.pdf.
Looking ahead, natural gas: See International Energy Agency, World Energy Outlook 2016 (Paris: OECD Publishing, 2016), 64; “Table: Delivered energy consumption by end-use sector and fuel,” U.S. Energy Information Administration, May, 2015, https://www.eia.gov/outlooks/aeo/data/browser/#/?id=15-IEO2016®ion=4-0&cases=Reference&start=2010&end=2040&f=A&linechart=~Reference-d021916a.60-15-IEO2016.4-0~Reference-d021916a.57-15-IEO2016.4-0~Reference-d021916a.56-15-IEO2016.4-0~Reference-d021916a.55-15-IEO2016.4-0&map=&ctype=linechart&chartindexed=0&sid=Reference-d021916a.55-15-IEO2016.4-0~Reference-d021916a.56-15-IEO2016.4-0~Reference-d021916a.57-15-IEO2016.4-0~Reference-d021916a.60-15-IEO2016.4-0&sourcekey=0.
Moreover, even in scenarios: The IEA’s 450 Scenario sees the world keeping emissions below the amount required to be consistent with limiting a rise in global temperatures to 2 degrees Celsius—and increasing its consumption of natural gas out to 2040. In contrast, a new joint scenario by the IEA and the International Renewable Energy Agency has greater climate ambition; it sees increases in natural gas consumption rise until 2030, and then begin to decline thereafter. International Energy Agency, World Energy Outlook 2016 (Paris: OECD Publishing, 2016), 64; International Energy Agency and International Renewable Energy Agency, Perspectives for the Energy Transition: Investment Needs for a Low-Carbon Energy System (Paris: OECD/IEA and IRENA Publishing, 2017), 57, http://www.irena.org/DocumentDownloads/Publications/Perspectives_for_the_Energy_Transition_2017.pdf.
Either of two policy extremes: See, for instance, BP p.l.c., BP Energy Outlook: 2017 edition (London: BP, 2017), 82-85, www.bp.com/content/dam/bp/pdf/energy-economics/energy-outlook-2017/bp-energy-outlook-2017.pdf.
On a hazy Sunday: “First LNG Shipment Imminent as Tanker Docks at US Cheniere’s Sabine Pass,” Reuters, February 21, 2016, www.reuters.com/article/cheniere-energy-lng-idUSL3N1611GE.
Natural gas, which had been cooled: “Watch Cheniere Energy Ship First Ever Lower 48 LNG Cargo,” YouTube, 1:09, posted by “Nikkiso Cryo,” April 25, 2016, https://www.youtube.com/watch?v=uXWFxhCgkGI.
A few days later: Jacob Gronholt-Pedersen, “U.S. Exports First Shale Gas as LNG Tanker Sails from Sabine Pass Terminal,” Reuters, February 24, 2016, www.reuters.com/article/us-shale-export-idUSKCN0VY08B.
For Cheniere, the American company: The celebration was real, if qualified, given the narrowing window between regional natural gas prices (which limits the potential for arbitrage) and with global enthusiasm for long-term contracts ebbing. See “Cheniere Aims to Export Disruption to Global LNG Market,” Houston Business Journal video, 04:01, April 25, 2016, www.bizjournals.com/houston/video/Axd2ozMzE6tKbjUU6SDilS-jCZZ2WWis.
By 2016, shale accounted: See “Oil and Gas: Crude Oil: Lower 48 Average Wellhead Price,” Annual Energy Outlook 2017, U.S. EIA, https://www.eia.gov/outlooks/aeo/data/browser/#/?id=14-AEO2017®ion=0-0&cases=ref2017&start=2015&end=2050&f=A&linechart=ref2017-d120816a.34-14-AEO2017~ref2017-d120816a.37-14-AEO2017&ctype=linechart&sid=ref2017-d120816a.37-14-AEO2017~ref2017-d120816a.34-14-AEO2017&sourcekey=0.
The U.S. EIA has already assessed: “World Shale Resource Assessments,” U.S. Energy Information Administration, September 24, 2015, https://www.eia.gov/analysis/studies/worldshalegas/.
According to those initial estimates: See Table 4.2, International Energy Agency, World Energy Outlook 2016 (Paris: OECD Publishing, 2016), 176.
If we include other types: International Energy Agency, World Energy Outlook 2015, 233; U.S. Energy Information Administration, Annual Energy Outlook 2016, www.eia.gov/forecasts.aeo/data/browser/#/?id=14-AEO2016®ion=0-0&cases.
Given the difficulties of replicating: Ibid.
By 2040, the United States will still: Ibid.
By some assessments, by 2035: BP p.l.c., BP Energy Outlook: 2016 edition (London: BP, 2016), 32–33, www.bp.com/content/dam/bp/pdf/energy-economics/energy-outlook-2016/bp-energy-outlook-2016.pdf.
However, at the age of fourteen: Dennis Allen Jacobs and Karen Anita Branden, From McEnergy to EcoEnergy: America’s Transition to Sustainable Energy (Pittsburgh: Whitmore Publishing, 2008), 64.
Yet it was not until nearly a century: The significant lag between the first commercial plant and the Methane Pioneer was in part due to the failure of the Cleveland project and an explosion costing 130 lives. Malcolm Abbott, The Economics of the Gas Supply Industry (London: Routledge, 2016), 141.
Despite the success of this shipment: “Strategy for LNG Market Development: Challenges and Countermeasures Toward the Creation of Flexible LNG Market and LNG Trading Hub in Japan,” presentation, Ministry of Economy, Trade and Industry, Tokyo, Japan, May 2, 2016, 2, http://www.meti.go.jp/english/press/2016/pdf/0502_01a.pdf.
Now, according to Leslie Palti-Guzman: Leslie Palti-Guzman, in-person conversation with the author, Washington, DC, July 7, 2016.
Countries such as Egypt, Pakistan, and Turkey: International Gas Union, IGU World Gas LNG Report: 2017 edition (Barcelona: International Gas Union, April 2017), 7, www.igu.org/sites/default/files/103419-World_IGU_Report_no%20crops.pdf. Turkey’s FSRU came into operation in 2016. Daily Sabah, “Turkey’s First FSRU Opened, Ready to Boost Energy Supply Security by 20M cbm Daily,” Daily Sabah Energy, December 23, 2016, https://www.dailysabah.com/energy/2016/12/24/turkeys-first-fsru-opened-ready-to-boost-energy-supply-security-by-20m-cbm-daily.
In an absolute sense: “World LNG Trade More Than Doubles, from About 12 Tcf in 2012 to 29 Tcf in 2040,
” Chapter 3, “Natural Gas,” U.S. Energy Information Administration, May 11, 2016, www.eia.gov/forecasts/ieo/nat_gas.cfm.
Remarkably, nearly half this growth: BP p.l.c., BP Energy Outlook: 2016 edition (London: BP, 2016), 35, www.bp.com/content/dam/bp/pdf/energy-economics/energy-outlook-2016/bp-energy-outlook-2016.pdf.
According to BP, LNG volumes: See BP p.l.c., BP Energy Outlook: 2017 edition (London: BP, 2017), 57, www.bp.com/content/dam/bp/pdf/energy-economics/energy-outlook-2017/bp-energy-outlook-2017.pdf.
The advent of U.S. LNG: Holly Morrow writes that “Australia’s CBM industry has experienced such robust growth that CBM-based LNG projects are slated to make up nearly 30 percent of Australia’s LNG exports by 2020, even amid strong growth in conventional gas exports.” Holly Morrow, “Unconventional Gas: Lessons Learned from Around the World,” Geopolitics of Energy Project, Belfer Center for Science and International Affairs, Harvard University, Cambridge, MA, October 2014, http://belfercenter.ksg.harvard.edu/files/Unconventional%20Gas-%20Lessons%20Learned%20from%20Around%20the%20World.pdf.
Assuming these costs are between: Jurgen Weiss et al., LNG and Renewable Power: Risk and Opportunity in a Changing World (Cambridge, MA: The Brattle Group, 2016), 8, http://www.brattle.com/system/publications/pdfs/000/005/249/original/LNG_and_Renewable_Power_-_Risk_and_Opportunity_in_a_Changing_World.pdf?1452804455.
If all the applications: “Long Term Applications Received by DOE/FE to Export Domestically Produced LNG from the Lower-48 States (as of July 2016),” U.S. Department of Energy, http://energy.gov/sites/prod/files/2016/07/F33/Summary%20of%20LNG%20Export%20Applications.pdf.
that is nearly twice: In 2016, global LNG trade was 258 million tons. International Gas Union, IGU World LNG Report: 2017 edition, 7. Japan LNG imports equaled 87.5 million tons in 2013. “UPDATE2-Japan’s 2013 LNG imports hit record highs on nuclear woes,” Reuters, January 27, 2014, www.renters.com/article/energy-japan-mof-idUSL3N0L103N20140127.
Yet the volumes are set: According to the U.S. EIA, U.S. LNG exports could be 7.8 bcf a day in 2020 and 12 bcf a day in 2035. See “Table: Natural Gas Imports and Exports,” AEO2017, U.S. Energy Information Administration, https://www.eia.gov/outlooks/aeo/data/browser/#/?id=76-AEO2017®ion-0-0&cases=ref2017&start=2015&end=2050&f=Q&linechart=ref2017-d120816a.3-76-AEO2017~~ref2017-d120816a.16-76-AEO2017&ctype=linechart&sourcekey=0.
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