Add another log to the fire.
Consumers may be soon be using this option if world natural gas producers have their way.
Russia, Iran and Qatar recently met in Tehran to discuss an OPEC-style cartel to control world natural gas markets.
This poses yet another threat to the world economy and political stability. Funneling more money into Iran and Russia is hardly a formula for world peace.
These three countries control more than 55% of the world's natural gas reserves and 26% of production. Natural gas trade has grown through construction of pipelines and shipments of liquefied natural gas. Russia, Iran and Qatar account for 28% of world natural gas movements and Qatar supplies 17% of the world's LNG.
The proposed cartel is dangerous because:
1.) Russia provides 50% of natural gas used in Europe.
2.) Europe imported 57% of its natural gas in 2006 and forecasts call for that to increase to 93% by 2030.
3.) Climate change initiatives look to natural gas use as a way to reduce global warming when compared to coal or oil.
4.) U.S. LNG imports are forecast to grow 7.3% annually from 2006-2030.
5.) OPEC and Russia own 74% of the world's natural gas resources.
About twenty years ago, I asked Dr. Subruto, then Secretary General of OPEC, why the organization did not extend its charter to include all hydrocarbons. My logic for this was that exports from his home country, Indonesia, were declining and they might be forced to leave the cartel if they were no longer a significant exporter. However, I reasoned, they could continue to be a member by virtue of their natural gas exports if the organization's mission changed.
In 1988, the notion was specification. In 2008, the spectre of such a global energy monopoly seems very real.
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