NATURAL-GAS SUPPLY-AND-DEMAND PROBLEMS

World natural-gas consumption quadrupled in the 30 years from 1966 to 1996, and natural gas now provides 22% of the total world energy deman d. The security of natural-gas supply is paramount and rests with the suppliers and the consumers. This paper gives an overview of world nat ural-gas supply and demand and examines the main supply problems. The most important nonpredictable variables in natural-gas supply are worl dwide gas price and political stability particularly in regions with h igh reserves. Other important considerations are the cost of developme nt/processing and the transport of natural gas to market, which can be difficult to maintain if pipelines pass through areas of political in stability. Another problem is that many countries lack the infrastruct ure and capital for effective development of their natural-gas industr y. Unlike oil, the cost of transportation of natural gas is very high, and, surprisingly, only approximately 16% of the total world producti on currently is traded internationally.