August 18, 2017
Jamie Horgan & Agnia Grigas
Thanks to the American shale boom and a newly globalized market, natural gas is changing geopolitics around the globe.
Jamie Horgan: I’m here with Agnia Grigas, a senior fellow at the Atlantic Council and author of the new book, The New Geopolitics of Natural Gas. Agnia, thanks for taking the time to talk with me today.
Agnia Grigas: Thank you, Jamie. It’s a pleasure to be here.
JH: In your book, you look at the transition to a new era of gas that you characterize as “a golden age.” What were the characteristics of the old era of gas, and what’s changed?
AG: Throughout the 20th century, natural gas was a much more localized commodity than oil, due to the difficulties of transporting it over long distances and across seas and oceans. It was also a much more politicized commodity, precisely because it was so difficult to transport. Oftentimes, gas-exporting and gas-importing countries had to forge long-lasting trade relationships with each other, co-investing in land-based infrastructure.
But within the past decade, things have changed. First, trade in LNG (liquefied natural gas) has grown, because it is easy to transport across the sea—and it’s now at its highest level in history. Second, the market has become much more liquid, largely due to the U.S. shale revolution flooding it with supplies. In addition, American exporters support flexible gas trade, which means more spot and short-term trading rather than the traditional long-term, oil-linked contracts.
