Natural Gas Sector Research Articles

The Future of Fracking: New Rules Target Air Emissions for Cleaner Natural Gas Production

Natural gas is lauded as a cleaner-burning fuel than either coal or oil, but getting the fuel out of the ground can be a dirty process, especially given the widespread adoption of the technology known as hydraulic fracturing (“fracking”). Concerns about toxic air emissions from previously unregulated fracking sites led to the U.S. Environmental Protection Agency (EPA) announcement on 18 April 2012 of new and updated air pollution regulations for these facilities and certain other elements of oil and natural gas production and transmission.1 Compliance with the new regulations is expected to result in major reductions in emissions of methane and volatile organic compounds (VOCs), particularly from new fracked natural gas wells. The rules were a hot topic nationally, drawing more than 156,000 comments after the proposed version was released in mid-2011. Under the final rules, companies have until January 2015 to fully phase in the control measures needed; by comparison, the initial proposal called for a 60-day phase-in for many major requirements. The EPA says about half of all new wells already use the equipment needed to capture the targeted emissions.2 A hydraulic fracturing natural gas drilling rig on the eastern Colorado plains. In 2009 there were more than 38,000 natural gas wells in the state. Many environmental groups consider the new regulations an improvement over the existing situation, but they tend to be disappointed much more wasn’t done. “This is quite a milestone,” says Jeremy Nichols, Climate and Energy Program director for the advocacy group WildEarth Guardians, one of two groups that filed suit against the EPA in 2009 to force action on the issue. “But is the work done? No, of course not. It’s a floor to build on, providing a minimal level of protection.” The oil and natural gas industry has its own concerns about the new rules but has indicated it can work with them. In a press release issued the day the rules were announced, Howard Feldman, director of regulatory and scientific affairs for the American Petroleum Institute, said, “EPA has made some improvements in the rules that allow our companies to continue reducing emissions while producing the oil and natural gas our country needs.”3

A new case for promoting wastewater reuse in Saudi Arabia: Bringing energy into the water equation

Saudi Arabia is the third-largest per capita water user worldwide and has addressed the disparity between its renewable water resources and domestic demand primarily through desalination and the abstraction of non-renewable groundwater. This study evaluates the potential costs of this approach in the industrial and municipal sectors, exploring economic, energy, and environmental costs (including CO2 emissions and possible coastal impacts). Although the energy intensity of desalination is a global concern, it is particularly urgent to rethink water supply options in Saudi Arabia because the entirety of its natural gas production is consumed domestically, primarily in petrochemical and desalination plants. This burgeoning demand is necessitating the development of more expensive high-sulfur gas resources that could make desalination even pricier. The evolving necessity to conserve non-renewable water and energy resources and mitigate GHG emissions in the region also requires policy makers to weigh in much more considerably the energy and environmental costs of desalination. This paper suggests that in Saudi Arabia, the implementation of increased water conservation and reuse across the oil and natural gas sectors could conserve up to 29% of total industrial water withdrawals at costs recovered over 0-30 years, depending on the specific improvement. This work also indicates that increasing wastewater treatment and reuse in six high-altitude inland cities could save a further $225 million (2009 dollars) and conserve 2% of Saudi Arabia's annual electricity consumption. By these estimates, some anticipated investments in desalination projects could be deferred by improving water efficiency in industry and prioritizing investment in sewage and water distribution networks that would ensure more effective water reclamation and reuse. Simultaneously, such initiatives would conserve non-renewable natural gas resources and could help prevent the lock-in of potentially unnecessary desalination infrastructure that is likely to become more energy and cost efficient in future.

Product Improvement with Quality Function Deployment (QFD) Technique

The purpose of this paper is to improve a new part for the natural gas sector using Quality Function Deployment (QFD) technique. QFD methodology was chosen for the product improvement process at IGDAS (Istanbul natural gas distribution company), the biggest natural gas distribution firm in Turkey. Experts from engineers were selected to determine customer expectations. Application of QFD to pipe strangling equipment is described step by step. The results show that when developing a new product or improving a product both customer expectations and product requirements are evaluated at the same time pleasing both parties for a successful result.

Development of Natural Gas and Pipeline Capacity Markets in India

Natural gas has emerged as the most preferred fuel due to its inherent environmentally benign nature, greater efficiency and cost effectiveness. The demand of natural gas has sharply increased in the last two decades at the global level. In India too, the natural gas sector has gained importance, particularly over the last decade, and is being termed as the Fuel of the 21st Century. Out of the total production of around 87 MMSCMD, after internal consumption, extraction of LPG and unavoidable flaring, around 74 MMSCMD is available for sale to various consumers.Domestic production is likely to double by 2012. Natural gas deficit in India is fulfilled by means of imports in the form of LNG and huge potential lies in the form of multiple upcoming transnational pipelines. However pipeline imports seem to be unlikely before 2015. Regulatory reforms in the upstream gas markets since 1994 helped in augmenting domestic production. In next twenty years, under a range of energy scenarios, the gas market can be expected to grow faster than coal and oil.This paper's prime focus shall be on the physical and financial aspects of the Indian gas market. The Indian gas network in terms of infrastructure and layout will be looked into. The financial aspects will cover the raising capital, budgeting and pricing of gas from various sources. In addition to this some light will be thrown on the regulatory regime, transportation market and optimization of pipeline operation. PNGRB guidelines regulate the Indian gas market. For transportation rail, road, water and pipelines are used, but primarily gas transportation in India is carried out by pipelines and major imports are in the form of liquefied natural gas. Use of state of the art technology such as DCS and SCADA have become common practice and has aided in value addition of gas networks in India.India's wholesale gas market and competitive interstate transportation market have shown a steady advancement in the recent past and lucrative opportunities for growth wait in the future.

Product Improvement with Quality Function Deployment (QFD) Technique

The purpose of this paper is to improve a new part for the natural gas sector using Quality Function Deployment (QFD) technique. QFD methodology was chosen for the product improvement process at IGDAS (Istanbul natural gas distribution company), the biggest natural gas distribution firm in Turkey. Experts from engineers were selected to determine customer expectations. Application of QFD to pipe strangling equipment is described step by step. The results show that when developing a new product or improving a product both customer expectations and product requirements are evaluated at the same time pleasing both parties for a successful result.

Modularity analysis of the Canadian natural gas sector

The paper describes the technological process presented as a chain of tasks that natural gas companies in Canada perform to move natural gas products from the geological formation to the final consumer. Investigating the norms the firms use to establish cooperation with clients and suppliers, it shows that the standardization of tasks facilitate arm's length interactions within the chain. The paper studies the distribution of risks in client–supplier pairs and concludes that their asymmetry in risk-taking may be indicative of relative importance that the risk takers assume within the pairs. Finally, the paper touches on the role that federal and provincial governments play in regulated segments of the chain and suggests that government-sponsored standardization may need to get reconciled with market practices.

Modularity Analysis of the Canadian Natural Gas Sector

The paper describes the technological process presented as a chain of tasks that natural gas companies in Canada perform to move natural gas products from the geological formation to the final consumer. Investigating the norms the firms use to establish cooperation with clients and suppliers, it shows that the standardization of tasks facilitate arm’s length interactions within the chain. The paper studies the distribution of risks in client-supplier pairs and concludes that their asymmetry in risk-taking may be indicative of relative importance that the risk takers assume within the pairs. Finally, the paper touches on the role that federal and provincial governments play in regulated segments of the chain and suggests that government-sponsored standardization may need to get reconciled with market practices.

West Siberian oil and gas sector: Problems and solutions

The development problems of the West Siberian oil and gas sector are analyzed. It is shown that before the 1990s the difficulties in the formation of the country’s new oil and gas base were due to the insufficient capital investment, allocated equipment, materials, transport facilities, and housing deficit, thereafter following by a reduction in the sector’s efficiency. The cause of this economic phenomenon is revealed. The long-term policy options are outlined in the oil and natural gas sector in the studied region.

Long-term natural gas contracts and antitrust law in the European Union and the United States

Long-term natural gas contracts and their specific features are at the forefront of legal and policy discussions around the world. Issues like oil price indexation and price reviews, flexibility and take-or-pay clauses or a move to shorter term trading are being debated. This is particularly true for Europe where major changes are taking place, but also in places like Australia and Asia. This study will focus on the antitrust treatment of long-term take-or-pay natural gas contracts and their specific provisions in the European Union and the United States. It will also examine the regulatory treatment of these contracts and the regulatory environment in which these contracts operate. Issues that are covered include questions on duration and volumes, take-or-pay provisions and oil indexation, destination or use restrictions, vertical integration and monopolization. Recognitions and methodological remarks This article was written as a part of a larger study on long-term natural gas contracts and EU competition law. The results of this study have been reported in this AIPN research article and in a book titled Vertical Natural Gas Transportation Capacity, Upstream Commodity Contracts and EU Competition Law (Kluwer Law International 2011). The focus in these two studies is different. The present article focuses on the legal aspects of the application of antitrust laws to natural gas contracts. It focuses on the application of law in the European Union (EU) and compares this to the situation in the United States (US). Drawing on the regulatory history in the US natural gas markets and the application of antitrust laws to long-term contracts, the study also provides for comparative remarks. The book on the other hand, focuses on competition ‘policy’ and the interplay between law and international geopolitics in the EU natural gas sector. It portrays a picture where the boundaries to the application of EU law in the natural gas sector are set by the geopolitics. It examines the role of politics in the application of law. The book also focuses on the question of how EU competition law should be applied to long-term natural gas commodity and capacity contracts, as opposed to the focus of this article which examines the application of the law.

Regulamentar faz diferença? O caso da evidenciação ambiental

Baseado na discussão entre tornar o disclosure ambiental obrigatório ou não, o objetivo desta pesquisa foi verificar se as práticas de evidenciação ambiental das companhias analisadas reagem aos distintos estímulos regulatórios de seus países de origem. A resposta desta pergunta é útil no sentido de determinar a eficácia da introdução de mecanismos regulatórios nas práticas de evidenciação ambiental. Uma vez que o disclosure ambiental é, predominantemente, voluntário as companhias podem simplesmente suplantar a regulação, tornando-a sem sentido. Para o desenho metodológico, optou-se por uma abordagem descritiva de cunho predominantemente quantitativo. A amostra foi selecionada de empresas do setor de petróleo e gás natural de quatro países com similaridades culturais: os Estados Unidos, o Canadá, a Inglaterra e a Austrália. Os dados analisados foram coletados nos relatórios anuais no ano de 2007. Para classificar os dados ambientais utilizou-se uma escala adaptada de dois trabalhos consagrados no meio da evidenciação ambiental, o estudo de Clarkson et al. (2008) e o de Wiseman (1982). O teste estatístico (teste H) comprovou que existem diferenças significativas entre os níveis de evidenciação ambiental das companhias da amostra pertencentes aos países mais regulados em comparação com os menos regulados e essas diferenças só foram significativas nos itens de divulgação obrigatória, o que comprova que o disclosure ambiental das companhias reage aos estímulos regulatórios de seus países.

China's Energy Future: A Framing Comment

A noted Hong Kong-based specialist on China's energy industries presents a comment on three papers comprising a symposium on that country's rapidly expanding oil, natural gas, and nuclear power sectors. He frames his observations around five overarching themes that have shaped China's energy sector development over recent decades and will continue to do so in the future. These include observations to the effect that: (a) China's energy policy seeks broadly similar objectives to those of other countries; (b) the country's energy resource endowment is not particularly rich when viewed in relation to the size of its population; (c) its energy mix continues to be dominated by coal, with important implications for the environment and domestic freight transportation; (d) the country's economy is confronting a pronounced spatial mismatch between the location of energy resources and the markets where they are consumed; and (e) strategies for energy developments in China are closely tied to overriding political and economic concerns at any given point in time.

Israel—New natural gas producer in the Mediterranean

In 2009 and 2010, major offshore natural gas reserves were discovered near the State of Israel. This article examines Israel's newly discovered natural gas reserves and the implications of this discovery for Israel, the Middle East, and the Mediterranean region. The article will discuss Israel's energy security approach; the role of natural gas in Israel's energy consumption patterns; the organization of Israel's natural gas sector; regional political and security implications of the natural gas discoveries; the prospects for export, and the outlook for various natural gas markets. These new discoveries significantly improve Israel's energy security. They may also spur Israel to develop technologies related to utilization of natural gas in a variety of sectors, such as transportation. The discoveries may contribute to the emergence of a number of maritime border delimitation conflicts in the Eastern Mediterranean. At current volumes, the Israeli discoveries will not be a game-changer for gas markets in southern Europe or liquefied natural gas (LNG) markets. However, they will lead to expanded natural gas consumption in the region. In addition, offshore exploration efforts in Israel and in neighboring countries are intensifying. Additional discoveries may turn the Eastern Mediterranean region into a new source of natural gas and oil.

Energy Act: Implications for the Energy Sector in Thailand

For many years Thailand has attempted to conduct industry structural reform, ownership reform and regulatory reform in its electricity and natural gas sector. Although there have been some ownership reform in PTT, a public enterprise in oil and gas sector, progress in industry structural reform and regulatory reform in the gas sector has been slow. Moreover attempts to privatize EGAT, an electricity stateowned enterprise, have failed for several times due to inconsistent government policies and protests from various interest groups. One of the factors, to which slow and unsuccessful reform in electricity and gas industries in Thailand are attributed, is the lack of energy legislation. To take steps to expedite the reforms, the government drafted an “Energy Industry Act” which was enacted in 2007. This law consolidates the laws relating to electricity and gas sector with the objectives of promotion of competition and private participation in energy sector, and establishment of an independent, transparent, and accountable energy regulator as well as new regulatory framework. The question arises whether this law could generate a new hope in energy sector. To answer this question, first this study details the key features of the Energy Industry Act, particularly in the areas of industry restructuring, promotion of competition, establishment and governance of regulatory body and regulatory framework. Then this paper will review energy laws of some countries such as United Kingdom, Malaysia, India, Singapore, the Philippines, South Africa and Ghana, in order to assess the implications of these laws on changes in their electricity and gas industries and regulatory environments. Due to distinct characteristics of each country’s energy industries and diverse paces of reforms, the implications of the laws on progress of reforms could be different from one country to another. This paper also analyzes the likely implications of the Energy industry Act on Thailand’s electricity and natural gas business. The key features of the Act that provide significant changes in the energy sector are the establishment of the regulatory body and framework, the introduction of a new regulatory instrument called Power Development Fund and a new system for consumer protection. However the Act does not stipulate a clear design for energy structural reform. This paper also discusses the possibility of achieving regulatory governance and of promoting competition, consumer protection and environment.

The world gas market in 2030 – development scenarios using the World Gas Model

We discuss potential developments of the world natural gas industry through 2030. We use the World Gas Model (WGM), a multi-period strategic representation of the global natural gas sector, between 2005 and 2030. We specify a 'base case' and then analyse the sensitivity of the world natural gas system with scenarios, including various supply scenarios (e.g., emergence of large volumes of unconventional shale gas, or tightly constrained reserves of conventional natural gas), the impact of CO2-constraints, and regional scenarios focusing, respectively, on Russian and Caspian exports, the Arab Gulf, China and India, and the US Pacific coast. Our results show considerable changes in production, consumption, traded volumes, prices, and investments in pipelines, LNG terminals, and storage. However, the overall world natural gas industry is resilient to local disturbances and can compensate local supply disruptions of natural gas from other sources. Long-term supply security does not seem to be at risk.

Overview of natural gas sector developments in Trinidad and Tobago

PurposeWith over 100 years of commercial activity, Trinidad and Tobago's energy sector has demonstrated significant growth and dynamism. This paper aims to provide a historical account of gas sector developments and seeks to decipher the motivating factors and key policy positions of the government.Design/methodology/approachA review of policy framing documents in the gas sector is conducted. These are juxtaposed with historical information on hydrocarbon production, level of foreign direct investment and State participation. The impact on the country's economy in terms of energy revenues and gross domestic product (GDP) is also examined.FindingsOver the period 1962‐2007, daily average hydrocarbon production increased eightfold to 800,000 barrels of oil equivalent due mostly to natural gas. Total energy revenues and GDP have grown significantly. Contributing factors include an evolving fiscal regime to attract foreign investment, strategic State investments, joint venture arrangements, monopoly gas transmission and merchant roles and an effective institutional framework. Government stewardship, market forces and private sector investment moulded the sector. Recent measures include revisions to the fiscal regime and sector diversification aimed at sustaining the industry.Originality/valueEnergy sector developments of this small island economy have largely escaped the purview of the mainstream academic literature. Trinidad and Tobago's energy policy has not been well articulated or documented, and this paper serves to act as a springboard for further studies which may provide policy direction for other countries.

Evaluating the efficiency effects of industry consolidation

PurposeSince the early 1990s, the US natural gas sector is characterized by substantial industry restructuring as a result of regulatory requirements following a liberalization objective. Accordingly, firms have chosen different strategies as a reaction of regulatory constraints, such as acquisitions, forming holding companies, or joint venture investment. In order to contribute to the success of business strategies driven by the regulatory framework, the purpose of this paper is to provide first evidence for the impacts of business strategies on a firm's efficiency within the gas transmission business.Design/methodology/approachThe approach taken is a stochastic frontier analysis.FindingsThe results highlighted significant effects of acquisitions, holding structures, and joint ventures within the industry on the firms' technical efficiency estimates. The paper finds evidence for efficiency improvements caused by the new shareholder. The results suggested those holdings to be successful which have great experience in the construction and operation of oil pipelines. In the case that firms formed a joint venture to construct and operate a gas transportation pipeline, the empirical analysis showed a negative impact of such a joint venture on technical efficiency of the pipeline company.Originality/valueThe paper provides evidence for the missing link between operating performance and the evaluation of different business strategies in terms of efficiency within the natural gas interstate pipeline industry.

Russia's oil and gas policy

AbstractRussia is a major oil and natural gas producer and exporter. In the last two decades the nation's energy policy has gone through fundamental changes. This study examines Russia's oil and natural gas sectors and Moscow's energy policy with Europe and the Organization of the Petroleum Exporting Countries. An examination of the nation's energy strategy is provided. The analysis suggests that Russia is likely to maintain its status as a major energy player; however, there are serious limitations on its potential.

European Energy Market After Deregulation: A Process of Limited Restructuring and the Role of European Competition Law

The financial organisations engaged in the electricity and natural gas markets were forced to change, due to the deregulation process. The presence of new players in the markets and changes in demand obliged the existing companies to react. This reaction was not limited to an aggressive commercial policy towards new geographic markets but often acquired complex forms, especially in the electricity sector. We note that the electrical power and natural gas sector are not characterised by a dynamic increase of demand nor by new technological achievements, as is the case in the telecommunications sector for example. Indeed the enterprises engaged today in these markets existed before the deregulation. Only a small number of new undertakings entered the market. In spite of this, there was significant development in the market structure and the nature of traders. We could notice a restructuring of the markets and traders, a fact that is a positive step towards the realisation of the domestic market. Therefore, it is necessary to control these changes in order to avoid any incompatibility with the goals of European Competition Law. In other words it is a delimitated restructuring of energy markets which is subject to supervision. In this paper we firstly present the different aspects of this restructuring and second we highlight the existing restrictions on this process, while we often refer to specific cases of high importance for the European Energy Market. We note that this paper constitutes a part of a broader research paper on the interaction between European Competition Law and Energy Market Regulation.

Energy Price Regulation in India: The Case of Natural Gas Sector

Energy price regulation is an important policy issue in the context of any developing nation, including India. The prices are controlled by the government, and these pricing mechanisms have resulted in distorted market structure. It is believed that the existing pricing policy for Natural Gas in India has constrained the growth of natural gas market in India, leading to a large unmet demand, primarily from the heavily subsidized power and fertilizer sector. This paper is an attempt to analyze the policy issue of natural gas pricing in India, using Kingdon’s Multiple Policy Stream Model. According to this multiple streams approach, the developments in the policy making process can be explained by the efforts of policy entrepreneurs to successful capitalize on the occasional “policy windows” by coupling elements in three different streams: problems, policies, and politics (Kingdon, 2003). The paper focuses on the developments in gas pricing policy in India, identifying the problem, policy, and political streams, and the ways in which key political entrepreneurs have coupled the streams at critical times is past, thereby illustrating the possibility of a current opportunity for taking a regulatory initiative on natural gas pricing.

Entrepreneurship in Oman

The Sultanate of Oman has a diversified economy, unlike many of its neighboring nations that rely almost entirely on oil revenues. Natural gas and several non-energy business sectors, such as tourism, fishing, light manufacturing, and agriculture are expanding rapidly. The Omani economy is one of the freest in its region. A relatively stable government and low taxes make Oman a desirable location for entrepreneurial ventures. Furthermore, foreign direct investment is welcomed. Tourism is the most attractive area for international entrepreneurs. Oil revenues, coupled with increasing foreign investment are likely to both diversify the Omani economic base and strengthen it.