Natural Gas

Global Differences in Reserves, Production, and Consumption

Global debates around natural resources in general, and natural gas in particular, revolve around imbalances in supply (production) and demand (consumption). Longer term geopolitical debates center on proven reserves, which is the measure for the verified stock of natural resources. Given the generally nonrenewable nature of natural gas, deals are struck internationally to settle imbalances between present or expected supplies and consumption needs for natural gas. According to the 2009 BP Statistical Review of World Energy, over half of natural gas reserves are located in what is present-day Russia, Iran, and Qatar, with less than 10% of proven reserves of natural gas lying within the territory of Organisation for Economic Co-operation and Development (OECD) nations. Like oil, the production of natural gas is split between corporate and state-run entities, yet no supply cartel, such as the Organization of Petroleum Exporting Countries (OPEC), exists. The largest producers of natural gas annually are the United States and Russia, who each contribute roughly 20% of total world production, with Canada as the world's third largest producer. Compared to their vast stock of natural gas deposits and to high producing countries, such as the United States and Canada, Iran and Qatar produce on an annual basis very little of their resource base. One of the reasons for this rapid production of reserves is the high demand for natural gas in the United States and Europe. Whereas OECD countries hold only a fraction of the natural reserves of natural gas, they consume nearly half of what is produced each year. Russia is also a large consumer, similar in volume to the United States.

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