A Global Gas Distribution Model with Transport Constraints: Methodology and Some Scenarios

Abstract

Abstract Natural gas resources are unevenly distributed around the world. Will we be able to grow transport capacity sufficiently quickly to transfer ever-increasing volumes of conventional natural gas from locations where it is found to where it is consumed in the 21st century and for how long? On a world scale, the crucial question for now is not how much gas there is overall, but the transport capacity linking regions with high gas resources to regions with a high consumption but insufficient local gas resources like North America, Europe and East Asia. To analyze the gas situation in the world, a gas distribution model was constructed. The model predicts the timing and amount of gas shortfall (the difference between demand and available supply) as well as depletion of recoverable gas resources for the various regions in the world for a 100-year period. To reduce the complexity of the problem, the world is split into only ten regions. In each region demand, supply and recoverable gas resources of the various countries are pooled. Transportation of gas by pipelines or LNG tankers is driven by the transport cost of gas between the regions and mainly depends on distance and topography. Several scenarios were tested for demand and recoverable gas resources using public data. Supply and demand predictions are from USA Government Agencies. Gas transport capacities between the regions were modeled using total export capacity of gas exporting regions. In the low and mid case scenarios shortfall of gas starts early for North America, East Asia and Europe, in the period 2015 (low case) to 2035 (mid case), and is caused by the low indigenous gas resources and by insufficient imports. In the high case scenario, which includes large volumes of tight gas, shortfalls would be much later, i.e. past 2070. North America has relatively large indigenous resources and imports relatively low amounts of gas but the local supply shortfall will be huge when its own resources are fully depleted. Both East Asia and Europe have low recoverable gas resources and high imports. Europe is strategically located to import gas from various regions but may find itself in competition with East Asia for pipeline gas. Key uncertainties are recoverable gas resources, demand and transport capacities, causing a supply shortage. For North America, East Asia and Europe, the lack of recoverable gas resources is most sensitive and development of unconventional gas resources will be essential to satisfy future demands. Another option is an increase of supply from gas exporting regions with very large resources like the Former Soviet Union and the Middle East, but this also requires much higher inter-regional transport capacities.