Natural gas occupies an important position in the global energy industry, exceeding previous preconceptions about it being a bridge between the oil age and the age of renewable energies. In truth, natural gas succeeded in playing a key role in the global energy sector, as it is being adopted in various industries such as power generation, petrochemicals, and the production of iron and aluminum. What helped the widespread use of gas in the beginning was the availability of associated gas, in order to produce crude oil. Regrettably, the associated gas was incinerated in many oil producing countries, bearing in mind that it is still being burned in some countries even today. What also contributed to the expansion of the natural gas industry was the availability of free gas fields. These are exclusively gas-producing fields, with some associated petroleum liquids such as condensates. The availability of this type of gas in large quantities and in different regions of the world has done much to expand the global gas industry. Credit can also be given to the availability of the technology to transport gas in liquid forms in special tankers, as is the case with the transportation of gas between Arab Gulf states and Asian and European countries, or among neighboring countries and local markets through an extensive network of pipelines, as is the case between Russia and European countries. In the past months, a third phase of gas production began with the extraction of shale gas, which was found to be in abundance in the United States. As the name implies, this type of gas can be extracted by cracking massive rocks deep underground. Among important aspects is the fact that the cost of producing associated gas is nearly zero, as it is usually collected during the extraction of crude oil. However, this is different when it comes to the production of free gas, because extracting it needs exploring new petroleum fields first, with similar costs to those of exploring and drilling for crude oil, in addition to other high costs, particularly when liquefying gas. In that case, liquefaction plants are needed to be built and special tankers need to be procured as well. But despite these costs, natural gas managed to expand more. The main reason for this is the long-term contracts involved in gas purchase and sale, not to mention its competitive price compared to oil, namely because of its ‘environmentally friendly' characteristics. As for the recently-discovered shale gas, it made its way into the gas industry in an entirely different manner, taking advantage of the success of the technology, in the United States, in cracking the rocks by means of pressurized water with chemical additives. Of course, the significance of this type of gas lies in its abundance in various parts of the United States, and its non-reliance on costs resulting from the exploration and development of petroleum fields. However, the disadvantages of shale gas include concerns – especially following the oil spill in the Gulf of Mexico – regarding the contamination of water aquifers adjacent to the shale gas-containing rocks. Indeed, the state of Pennsylvania, which produces this type of gas, has already warned against these potential hazards. Also, shale gas is not expected to be produced in Europe in the foreseeable future, as shale gas locations are near the water basins of the Austrian capital Vienna and the Polish cities. According to forecasts by experts, shale gas production in Europe will be put off to the end of next decade, or until more appropriate means of preventing water contamination become available, if ever. In addition to shale gas, there is also methane gas, which is available in coal mines. These types of gas are called non-conventional gas sources. These gases are important because they provide new and additional supplies of gas that would impact its prices negatively, especially as they are abundant in the United States, the largest global market for gas, and because of their subsequent impact on the global gas industry. The most important of such gas fields are located in the eastern regions of the United States, particularly the Marcellus field, which contains more than seven billion cubic meters of non-conventional gas reserves. The key questions here are: what are the effects of non-conventional gas sources in global markets? Are there fundamental changes taking place in the global gas industry; or will the gas industry and trade, following prolonged stability, begin to follow in the footsteps of the oil industry in terms of facing major fluctuations and volatility in sale and purchase agreements and prices? What effect will these new developments have on free gas? Many pundits are raising these questions, without obtaining clear answers so far. Also, the major gas-producing countries are trying to adopt appropriate policies to adapt with the new situation, in order to preserve their markets. *. Mr. Khadduri is an energy expert
