Hillard G. Huntington在2005上海论坛的发言

　　由复旦大学主办的“上海论坛2007”将于2007年5月25日至27日在复旦大学举行。此次论坛拟邀请世界各国著名学者、政要及商界精英300人与会。在“经济全球化与亚洲的选择”的主题下，上海论坛2007以“关注亚洲、聚焦热点、荟萃精英、推进互动、增强合作、谋求共识”为宗旨，努力构建“学界、政界、商界”三方互动的交流平台，对当今全球经济和国际局势所面临的重大问题展开广泛、多维和深入的研讨。以下为上海论坛-2005回顾。

The Geopolitics of Natural Gas:An Energy Modeling Forum Study

Hillard G. Huntington

Energy Modeling Forum Stanford University

　　Introduction

　　Since 1976, the Energy Modeling Forum at Stanford University has organized a number of studies investigating important energy markets and policy problems. Currently, the forum is operating a major effort to evaluate international natural gas market conditions over the next two decades. This paper discusses the study’s approach, major topics and expected results for improving policy and strategic decisions, with particular reference to China and her Asian neighbors.

　　China in an International Natural Gas Market

　　Expanding natural gas infrastructure is a critical development in China’s energy and economic plans. An increased role for natural gas in China will depend upon the development of a unified transmission and delivery system, a coordinated system of market prices for this fuel, and financial participation by leading international energy firms (Locatelli 2004). These decisions will be made within an industry that is rapidly connecting national systems into a global integrated market.

　　The liberalization and globalization of the natural gas business is the most recent chapter in a long-run process that I call the Great Energy Transformation. More than 60 years ago, the economic historian Karl Polanyi (1944) traced the evolution of the market economy system in England from the Speenhamland Act of 1795 to the Corn Laws of 1846. This Great Transformation changed man’s effort into the labor market, nature into the land market, and money into national currency markets. Today, similar forces are operating to turn controlled and regulated natural resources into national and global markets for petroleum, electric power and natural gas. Like Polanyi’s great transformation, the process is unlikely to be smooth, may involve significant obstacles, and will take a number of years to materialize. But the process will surely happen.

　　The Forum Process and Study

　　The forum’s unique process is based upon a comparison of results from experts who use different analytical frameworks or models to ascertain market conditions. The forum does not participate as a modeling group in this effort, but rather acts as an impartial arbiter that seeks to find insights about how experts view the markets. Comparisons of these results are useful for understanding which factors are most important in influencing natural gas markets. Each study is operated through an informal working group with representatives from business, governments, research organizations and universities.

　　The natural gas study will focus on identifying the most attractive trading corridors linking gas-supply regions to gas-using areas. Liquefied natural gas (LNG) can be moved along a south-north axis or in the east-west direction. Although overseas trading opportunities are expanding rapidly, they will need to compete against major pipelines over certain routes. As natural gas flows between regions, prices in the different areas will become increasingly linked with each other. These prices will determine the relative attractiveness of using different corridors for transporting natural gas.

　　At the same time, natural gas investments will be politically constrained. Supply will be expanded more quickly and less expensively in some areas than in others, based partly upon economic conditions but also partly upon geopolitical risks. Use of natural gas requires extensive infrastructure to transport and deliver supplies efficiently. Governments in gas-using nations will be important in expanding this infrastructure as well as in limiting it due to concerns about siting facilities to meet fears about safety.

　　Natural Gas Scenarios

　　This forum’s working group will focus upon these specific topics over the next twelve months:

　　1.Will Russia attract the required investment to provide significant natural gas volumes at competitive prices?

　　2.Will European countries impose constraints on gas volumes to be imported from Russia?

　　3.How will international natural gas trading be influenced by major reductions in the cost of transporting and delivering LNG?

　　4.Will geopolitical conditions encourage or restrict investments in liquefaction facilities in major gas-producing regions?

　　5.Can a group of large gas-producing countries form an effective cartel to keep natural gas prices artificially high?

　　6.Will “remote” natural gas remain inexpensive in world with substantially higher economic growth and natural gas demand?

　　1Russian geopolitics

　　The objective of this scenario is to analyze a situation where Russia does not expand its natural gas exports as planned. Reasons for this might be unexpectedly high production costs, lack of investment in pipeline and LNG-infrastructure, or a political decision to restrain exports. Both the global and the regional natural gas models should be able to include such an exogenous restriction of Russian natural gas exports.

　　The group will consider a “Russia-constrained” scenario, in which Russia decides to restrict natural gas exports to its current level of approximately 140 billion cubic meters to Europe and to refrain from developing any exports to Asia. These developments should increase the competition for natural gas from North Africa and the Middle East, eventually affecting the delivered natural gas prices for LNG into the United States.

　　2 European politics

　　Another set of conditions that could reduce Russian supplies would be a unified European policy that limits its share of natural gas imports from Russia to no more than 50%. Under these conditions, European demands would begin to attract supplies from North Africa and the Middle East, resulting in some of the same market pressures in the first scenario described above. An additional shift, however, will be that Russia’s response to the European policy may be to accelerate plans to its investment away from the western markets and favor exporting to China, Japan and Korea.

　　3LNG costs

　　The costs of processing remote gas resources and transporting it to networked demand centers have been cut in half over the last decade. Some cost reductions have materialized from firms being smarter in managing their LNG facilities and operating with a simpler design. Some cost reductions reflect economies of scale when firms moved from facilities producing 3 Million Tons / year to ones producing 5 and ultimately 8. Further cost reductions flow from increased shipyard competition in places like Korea, Spain, and ultimately China. The industry is achieving similar cost reductions in pipeline technology as well, with such developments as the new ExxonMobil X120 tensile steel linepipe.

　　This scenario will focus upon an acceleration of these trends for LNG costs beyond the current expectations. Total LNG transportation and delivery costs will be reduced by 30%-50% beyond expected levels in the next 20 years.

　　4Liquefaction constraints

　　About 50 to 70 percent of the investment in LNG facilities occurs in the host country where gas resources are drilled and liquefied. The International Energy Agency estimates that world natural gas investments will average $105 billion per annum over next 30 years, equivalent to about one quarter of the total GDP in eastern Europe. Natural gas will attract about $1 in every $5 that will be spent for total energy investments.

　　Much of this investment will be directed towards countries like Saudi Arabia, Nigeria, Russia, and eventually Iran, where political and civil unrest may be major future problems. Rapidly expanding populations with a high proportion of young males may make some of these areas particularly vulnerable to failed governments. In addition, throughout the Persian Gulf, national oil companies operate with a public mentality and facilitated access to the available resources. Host governments find fee-for-service or project management contracts much more politically appealing than ownership of resources by large foreign oil companies.

　　An acceleration of these trends could lead to a significant shortage of liquefaction and perhaps tanker capacity in the exporting region. This scenario will represent a world where LNG export capacity is constrained by political events and a risky investment environment in the major producing countries, resulting in substantially reduced growth in export capacity from 2003 levels.

　　5Gas Cartel

　　The world natural gas resources are just as concentrated as are world oil resources. Thirty percent of the resource base lies in Russia, while more than half can be found in a group that also includes Iran and Qatar. Cartels are not easy to maintain and control, especially over such diverse countries with different interests. Nevertheless, these countries may have significant economic incentives to restrain their exports in order to maintain higher natural gas prices.

　　This scenario would test for the potential gains that might accrue if the top three or five producing countries formed an effective cartel. Other gas producing areas would be considered as fringe producers that simply accepted the higher prices caused by the “Gas-OPEC’s” decision.

　　6Higher Natural Gas Demand Growth

　　An important issue is the extent to which natural gas resources will remain remote and relatively inexpensive compared to other energy sources. Many estimates of expanding LNG trade are based upon an assessment that natural gas prices in the host (or producing) country will remain sufficiently low to allow the gas to be transported to major demand centers. With competing demands for these supplies, however, one might expect some pressures for higher natural gas prices in these producing regions.

　　This scenario will provide an opportunity to evaluate how much natural gas prices in different regions will respond to a different set of natural gas demand conditions. It is based upon a high economic growth case where each region’s economy grows by 0.5% per year faster than the reference case. We expect that this will lead to a 0.25 or 0.3% faster growth in natural gas demand, depending upon the experts and their frameworks.

　　7Reference Case

　　The effects of these different conditions will be determined by comparing each scenario with a reference case. The study’s reference case is unlikely to be the group’s assessment of what are the most likely set of conditions, because each group may have fundamentally different views. The important feature of this case is to adopt a set of conditions that are possible and consistent with each other.

　　The group’s reference case in this study will be based upon either the International Energy Agency’s World Energy Outlook or the Energy Information Administration’s International Energy Outlook. Critical outside factors that should be standardized across groups include crude oil price paths and economic growth assumptions. Experts will be allowed greater flexibility in implementing many other assumptions.

　　Models

　　Based upon these standardized inputs, each expert will determine the price, supply and demand for natural gas in each of many different regions between now and the year 2030. More than a dozen different research, consulting and government organizations plan to operate their institution’s modeling framework and participate in the study. Table 1 shows that the models are evenly distributed in their regional focus between the world, Europe and North America.

　　These frameworks explain the economic conditions influencing natural gas markets. Natural gas demand is a function of delivered natural gas prices, substitute fuel prices, technological progress, demographic trends, and economic activity. Natural gas supply is a function of resource costs, technological progress, and drilling activity. Volumes can be piped across regions, depending upon exogenous estimates of pipeline costs and capacity. In addition, LNG can be shipped between regions, depending upon shipping costs, liquefaction capacity in the host or producing region, and regasification capacity in the destination or using region. Market prices are determined by balancing the supply and demand in each region.

　　A skilled model practioner once said, “All models are wrong, but some models are useful.” Models will always produce incorrect results, because models reflect rather than replace human judgment. The only advantage provided by modeling is a structural and consistent framework for integrating diverse and sometimes complicated relationships. Models are not the real world but simply abstract more complicated systems so that we can understand them more easily. Useful models are those that abstract and integrate this information in ways that can be clearly understood and that can influence decisions.

　　The forum’s goal is to identify those frameworks that add value and on which issues. The process focuses on the user who makes decisions. Corporate and government users participate in our working groups because they are often asked to formulate the most relevant questions and issues that keep people awake at night. Over the last 30 years, we have found that comparing results is a more effective way to learn about models and the way that the view markets elaborating on the detailed model outlooks or structures.

　　Why Use Models?

　　Why would you use an economic model to represent conditions that are strongly influenced by geopolitical developments and constraints? Venezuela and Trinidad share a common larger natural gas resource base, but the first country barely produces any volumes. Supplies from Turkmenistan or Iran could fulfill Indian demand for natural gas at competitive prices, if a pipeline could be constructed through Pakistan.

　　In each of these cases, however, you can consider what would happen if the political constraint were relaxed. New supplies would enter and new transmission opportunities appear, resulting in a reallocation of gas flows and in changes in natural gas prices. Some countries would gain, while others might lose. The frameworks allow the analyst to understand the potential benefits of changed geopolitical events and may even improve discussions about international policy.

　　The frameworks can also be used to estimate the implicit economic costs associated with political constraints on production or transmission. When Iran cannot produce and supply the same markets as can Qatar, are they suffering large or relatively small economic costs? Which geopolitical constraints create the largest lost opportunities?

　　In addition, the frameworks are invaluable for considering a range of economic issues that are beginning to emerge in this international market:

　　•What are the trends and relationships in regional prices

　　•Where and when should firms invest in new production, transportation or consumption facilities

　　•Which investments will be most vulnerable to changed conditions

　　•How do markets outside of the Western Hemisphere adjust to resource depletion in North America?

　　•How do markets both inside and outside of Asia adjust to delayed pipeline construction from Russia?

　　•Can Russia, either independently or in cooperation with other countries, significantly increase its profits by restricting exports and pushing up prices?

　　None of these issues would be easy to evaluate unless one applied a structural and consistent approach for representing the key relationships.

　　Conclusion

　　The acceleration in the efficiency of the combined-cycle gas turbine has allowed natural gas to become a competitive fuel for generating power. Today, gas can compete with coal for U.S. baseload power units if natural gas prices can remain at or below the $4 to $5 per MMBtu range, which many experts expect to be the case if permits are granted for new LNG terminals. Increased penetration by integrated gasification combined cycle technology based upon coal could force gas prices to be lower by as much as a dollar to remain competitive. Similar economic forces are operating elsewhere in some major regional markets of the world.

　　The EIA’s International Energy Outlook expects that this trend in the power sector will raise the world natural gas share of total energy consumption in all sectors from 23 percent in 2001 to 25 percent in 2025. Power and natural gas demand are expected to increase by 2.3 and 2.2 percent per year, respectively, and outstrip the growth for other energy sources in both industrialized and developing countries. The call on natural gas resources can only be met by rapid and aggressive growth in pipeline and LNG facilities. A typical LNG facility from liquefaction to regasification involves anywhere from $3 to $10 billion, underscoring the significant investment challenge of this revolution.

　　References

　　Peter Hartley and Dagobert Brito, “Using Sakhalkin Natural Gas in Japan,” Working Paper prepared for Baker Institute Study Number 18: New Energy Technologies in the Natural Gas Sector: A Policy Framework for Japan. Available at

　　www.rice.edu/projects/baker/.

　　Hillard G. Huntington, John P. Weyant and James L. Sweeney, "Modeling for Insights, Not Numbers: The Experiences of the Energy Modeling Forum," with, Omega: The International Journal of Management Science, Volume 10, No. 5 (feature article), 1982, pp. 449-462.

　　International Energy Agency, World Energy Outlook 2004, Paris: France, 2004.

　　James Jensen, “The LNG Revolution,” Energy Journal Volume 24, Number 2, pp. 1-45.

　　Catherine Locatelli, “The Entry of China to the Gas Market: Constraints and Opportunities,” International Journal of Global Energy Issues, Volume 22, No. 2/3/4, 2004, pp. 119-130.

　　Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press by arrangement with Rinehart & Company, Inc., 1944, 1957.

　　US Energy Information Administration, International Energy Outlook 2004, Report #: DOE/EIA-0484(2004), Washington, DC, April 2004.

　　Table 1: Participating Organizations with a Natural Gas Model

　　World Systems

　　Rice University

　　Charles River Associates

　　International Energy Agency

　　RITE, Japan

　　European Systems

　　Energy Centre for Research in the Netherlands (ECN)

　　DIW (German Economic Institute, Berlin)

　　Statistics Norway

　　International Institute for Applied Systems Analysis (IIASA)

　　North American Systems

　　Argonne National Laboratory (AMIGA)

　　Energy Information Administration (NEMS)

　　Global Insight Inc.

　　Lukens Group (North American Regional Gas)

　　Environmental Protection Agency/ICF, Inc. (IPM/NANGAS)