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Research: Natural Gas in North America: Markets and Security

Predicted shortages in U.S. natural gas markets have prompted concern about the future of U.S. supply, both domestically and from abroad. The United States has a premier energy resource base, but it is a mature province that has reached peak production in many traditional producing regions. In recent years, environmental and land-use considerations have prompted the U.S. to remove significant acreage that was once available for exploration from energy development. Twenty years ago, nearly 75% of federal lands were available for private lease to oil and gas exploration companies. Since then, the share has fallen to 17%. At the same time, U.S. demand for natural gas is expected to grow by close to 2.0 percent per year over the next two decades. With growth in domestic supplies of natural gas production in the lower 48 states expected to be constrained in the coming years, U.S. natural gas imports are expected to rise significantly in the next two decades, raising concerns about supply security and raising questions about appropriate national natural gas policy.

The future development of the North American natural gas market will be highly influenced by U.S. policy choices and changes in international supply alternatives. In this study, the Baker Institute examines how different natural gas policy frameworks will influence the development of the North American gas market. The Baker Institute will use its world gas model to simulate future development of North American natural gas trade based on the economics of resource supply and demand and commodity transportation. The study will analyze various supply and demand scenarios that will be important for consideration of the development of sound U.S. domestic natural gas policy.

Some of the questions that will be examined include:

  • What would the ramifications be of rising dependence on Middle East LNG supplies in the event of a supply disruption or cartelization of gas suppliers?
  • How high do prices need to rise to propel construction of an Alaskan natural gas pipeline?
  • What impact will the promotion of alternative fuels have on U.S. natural gas consumption?


Click here to see the study Policy Report, Working Papers and Event Presentations.


This study was generously cosponsored by the Baker Institute Energy Forum Sponsors and
the Independent Petroleum Association of America (IPAA).