Call to review Qatar’s long-term gas supply strategy

Qatar needs to review its long-term planning and strategy of gas pricing policy set under the National Vision 2030 as exploration of shale gas in the US, Canada, China and other countries will reduce their dependence on imports causing an adverse impact on our gas supply, says the findings of a latest project report conducted by a Qatar University student.

Sheikha Al Misnad, a student of post graduation at the College of Economics at Qatar University, submitted a project report on the topic titled ‘Impact of Shale Gas (LNG) on Qatar’s Gas Supply and Pricing Policy’. A study supposedly conducted for the partial fulfillment of her Masters degree.

According to the findings of her project, the exploration of shale gas by major gas importing countries such as in North America, Asia and Europe will increasingly reduce their dependence for clean energy on Russia and the Middle East including Qatar.

The study, which is based on the data on Qatar’s gas export for 20 years, suggests that, presently, the production of shale gas by above countries suffer with many handicaps such as higher cost of production, negative impact on environment and others, which are positive factor for Qatari gas, as the country is currently producing and supplying cleaner and cost effective energy. However, she cautioned that with the passage of time and advancement in technology may turn the table, for which Qatar needs to do more to maintain its comparative advantage in supplying cleaner and price competitive energy.

During the discussion of the findings of her project study, she called on to the policy makers to set up a long term planning and marketing strategy to make Qatari gas more competitive in terms of price, transportation and environment in future.

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Shale gas is natural gas formed from being trapped within shale formations. It has become an increasingly important source of natural gas in the United States over the past decade, and interest has spread to potential gas shales in the rest of the world. Experts expect shale gas to supply as much as half the natural gas production in North America by 2020.

Some analysts expect that shale gas will greatly expand worldwide energy supply. China is estimated to have the world’s largest shale gas reserves.

Earlier, a study conducted by the Baker Institute of Public Policy at Rice University concluded that increased shale gas production in the US, Canada and other Asian countries could help change the position of Russia and Gulf countries, from the present price maker to price taker, for the gas it exports.

Notably, the Obama administration believes that increased shale gas development will help reduce greenhouse gas emissions. However, some studies have also alleged that the extraction and use of shale gas may result in the release of more greenhouse gases than conventional natural gas.

Other studies have criticized one of these for relying on implausibly high leakage rates and misstating the global warming potential of methane. And also for the decline rates of some shale gas wells as an indication that its production may ultimately be much lower than is currently projected.

source: The Peninsula