\n<\/p>\n
From Western Europe to East Asia, countries are scouring the globe for natural gas after the war in Iran cut off the Persian Gulf fuel that they relied on to cook dinner, heat homes and generate electricity.<\/p>\n
The United States, as the world\u2019s biggest gas exporter, will almost certainly benefit from this upheaval, at least in the short term.<\/p>\n
But the war with Iran, now entering its second month, is also a reminder that importing gas is a risky proposition that can leave buyers exposed to high prices and shortages during geopolitical strife. That presents a big challenge to the oil and gas industry\u2019s plans to sell more natural gas \u2014 and creates an opening for alternatives like renewable energy, coal and nuclear power.<\/p>\n
\u201c<\/strong>What you\u2019re seeing with this type of volatility that seems to happen every four or five years, it\u2019s just not good,\u201d Jack Fusco, chief executive of a large U.S. gas exporter Cheniere Energy, said last week at a Houston energy conference, CERAWeek by S&P Global.<\/p>\n This is the second time in recent years that a war has caused natural gas prices to soar in many parts of the world. The last spike followed Russia\u2019s invasion of Ukraine in 2022.<\/p>\n Gas is still a lot less expensive than it was four years ago. But the Iran war is not over.<\/p>\n Analysts say that prices could rise significantly if Qatar, one of the world\u2019s largest gas exporters, is unable to restart gas shipments relatively soon. On the third day of the war, the country stopped preparing gas for export. Its facilities later sustained extensive damage that a state-owned energy company said would take several years to repair.<\/p>\n Buying and selling natural gas is not something countries do lightly. Shipping the fuel overseas requires significant, long-term investment. After natural gas is taken out of the ground, exporters have to chill it to negative 260 degrees Fahrenheit (negative 162 degrees Celsius) to turn it into liquid that can be transported on massive oceangoing tankers. Countries buying that liquefied natural gas, or L.N.G., need to build import terminals to turn the fuel back into gas and pipelines to get it to utilities, factories and homes.<\/p>\n Having invested in a lot of that expensive kit, some countries now find themselves without a reliable supply of gas.<\/p>\n The loss of Qatar\u2019s supply is so significant because the country ordinarily sells about 20 percent of the world\u2019s L.N.G. Other exporters don\u2019t have enough extra capacity to quickly make up for all of that.<\/p>\n Already, officials in Japan, Bangladesh and Thailand, which typically buy gas from Qatar, have taken steps to burn more coal to produce electricity. South Korea, meantime, is urging residents to conserve energy, including by taking shorter showers.<\/p>\n At the same time, buyers are competing for cargoes of L.N.G. produced outside of the Persian Gulf. That had many American companies riding high last week at the conference in Houston. Many executives expect that they will be able to build more export terminals and charge higher prices. New gas projects in places like Canada or Argentina could also advance as importers look to diversify.<\/p>\n \u201cU.S. producers are positioned to be enormous winners,\u201d said Meg Gentle, who previously led a Houston-based L.N.G. developer.<\/p>\n But there can be too much of a good thing. The longer the war disrupts the global energy trade, the more likely it is that importing countries will try to insulate themselves from future shocks by developing energy domestically or taking steps to conserve. Europe now uses an estimated 16 percent less natural gas than it did in 2021, the year before Russia invaded Ukraine, according to the International Energy Agency.<\/p>\n \u201cThe credibility of L.N.G. and gas imports really has taken a hit,\u201d said Ira Joseph, a senior research associate at Columbia University\u2019s Center on Global Energy Policy. \u201cBecause of Russia first and now Qatar.\u201d<\/p>\n Higher gas prices also make alternatives more attractive. Take Asia, which the I.E.A. was expecting to help drive a 9 percent expansion in global gas demand by 2030, fed partly by a nearly 50 percent expansion in global L.N.G. supply. Growth could slow if countries switch to other energy sources because they cannot secure enough L.N.G. or can no longer afford it.<\/p>\n Last week, Goldman Sachs raised its forecast L.N.G. prices in Asia by 15 percent for the second half of the year. By 2028, the investment bank said, L.N.G. is likely to be around 57 percent more expensive in Asia than it had expected before the war. Goldman made similar changes to its natural gas price forecasts for Europe.<\/p>\n \u201cEveryone will ask questions,\u201d said Brendan Duval, chief executive of Glenfarne, which is developing natural-gas export terminals in the United States. \u201cLike if you\u2019re in India,\u201d he said, \u201cthey\u2019re very price sensitive, so are they going to go, \u2018All right, let\u2019s not get too exposed to L.N.G. because this could happen every three years?\u2019\u201d<\/p>\n \u201cBut,\u201d Mr. Duval added, \u201ceveryone\u2019s got short memories.\u201d<\/p>\n Energy executives who are not in the business of selling L.N.G. said importers would have a strong reason to consider other options.<\/p>\n \u201cIf you\u2019re a country that doesn\u2019t have fossil fuels, you\u2019re relying on imports, you\u2019re going to look to protect yourself,\u201d said John Ketchum, chief executive of NextEra Energy, which owns and operates renewable energy projects as well as nuclear and gas-fired power plants in the United States. \u201cOne of the ways you can protect yourself is with renewables and storage \u2014 or nuclear.\u201d<\/p>\n Some world leaders may look to China as an example. Over the last 20 years, that country has pushed hard to reduce its reliance on imported oil and gas, motivated mainly by worries about energy security rather than concerns about climate change.<\/p>\n It has built hundreds of power plants that burn domestically produced coal, installed more wind and solar power than the rest of the world combined and is building dozens of nuclear power plants. The country also fostered a cutting-edge electric vehicle industry. And while China still buys a lot of L.N.G., it can use less gas during crises, said Mr. Joseph of Columbia.<\/p>\n Nations have other options. They could develop their own domestic gas supplies or invest in more gas storage capacity to weather large disruptions, according to analysts at Wood Mackenzie, a consulting firm. But both would take time to have a meaningful impact.<\/p>\n So far, American consumers and businesses have been spared higher natural gas prices. That\u2019s because the United States is such a big producer and gas is hard enough to transport that prices tend to be set regionally rather than worldwide.<\/p>\n But if there is a lot more demand for U.S. gas in the coming years \u2014 and less supply from Qatar \u2014 prices most likely will rise in the United States, too. Goldman Sachs recently raised its forecast for U.S. natural gas prices in 2028 by more than 30 percent.<\/p>\n","protected":false},"excerpt":{"rendered":" From Western Europe to East Asia, countries are scouring the globe for natural gas after the war in Iran cut off the Persian Gulf fuel that they relied on to cook dinner, heat homes and generate electricity. The United States, as the world\u2019s biggest gas exporter, will almost certainly benefit from this upheaval, at least<\/p>\n","protected":false},"author":1,"featured_media":47598,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[1048,2628,867,84,2150,14922,261],"class_list":{"0":"post-47597","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-countries","9":"tag-force","10":"tag-gas","11":"tag-iran","12":"tag-natural","13":"tag-rely","14":"tag-war"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/47597","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=47597"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/47597\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/47598"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=47597"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=47597"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=47597"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}