Question

which countries gain and which coutries lose from the avaliability of cheap natural gas? ( fracturing the energy market). answer in 600 words.

Answer 1

Global Natural gas prices have fallen sharply over the past seven months, leading to significant revenue shortfalls in many energy exporting nations, while consumers in many importing countries are likely to have to pay less to heat their homes or drive their cars.

From 2010 until mid-2014, world oil prices had been fairly stable, at around $110 a barrel. But since June prices have more than halved. Brent crude oil has now dipped below $50 a barrel for the first time since May 2009 and US crude is down to below $48 a barrel.

The reasons for this change are twofold - weak demand in many countries due to insipid economic growth, coupled with surging US production.

Added to this is the fact that the oil cartel Opec is determined not to cut production as a way to prop up prices.

Recent estimates of large shale gas reserves across the globe1 have raised expectations for cheap energy and improved security of supply, particularly as the consumption of natural gas is expected to triple by 2035.2-4 It is estimated that shale gas could add 7299 trillion cubic feet (tcf) to global gas reserves; by comparison, conventional gas reserves are estimated at 6614 tcf.1, 5 A critical factor in gas consumption is that 73.5 % of gas is traded (68 % by pipeline and the rest as liquefied natural gas (LNG)), which means that there is a high dependency on imports for many countries.

Natural gas is a fossil fuel, though the global warming emissions from its combustion are much lower than those from coal or oil.

Natural gas emits 50 to 60 percent less carbon dioxide (CO2) when combusted in a new, efficient natural gas power plant compared with emissions from a typical new coal plant .Considering only tailpipe emissions, natural gas also emits 15 to 20 percent less heat-trapping gases than gasoline when burned in today’s typical vehicle .For example, nations such as Japan and South Korea import all their gas consumption, whereas the UK relies on imports for 55 % of its demand.4-6 A high dependency on imports can lead to high energy prices. For instance, the 2012 gas prices in Japan and the UK were US $15.89 and US $8.97 per GJ, respectively.5 By contrast, the price of natural gas in the US, which is almost self‐sufficient in this fuel, was US $2.62 per GJ.5 The latter is a direct consequence of the exploitation of shale gas in the US, which is still the only country to produce it commercially on a large scale, despite 41 other nations having shale gas reserves.1 As shown in Table 1, 31 of these are or were actively looking into exploiting their reserves and are at different stages of development. The remaining 11 nations are undecided on whether or not to develop shale gas, either because their (estimated) resource is small or because their conventional gas reserves are much larger (Russia).