This working paper describes a spatial and intertemporal equilibrium model of the world market for natural gas. Specifically, the model calculates a pattern of production, transportation routes and prices to equate demands and supplies while maximizing the present value of producer rents within a competitive framework. Data incorporated into the specifications of supplies and demands in each location are taken from a variety of sources including the United States Geological Survey, the Energy Information Administration, the International Energy Agency, the World Bank and various industry sources. A subsequent working paper uses the model to investigate the possible effects of a number of scenarios including possible political developments.
This paper is part of the joint PESD - James A. Baker III Institute for Public Policy study on the Geopolitics of Natural Gas.