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ID:
177170
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| Summary/Abstract |
The exploitation of low-cost shale gas in the Marcellus Formation, the deregulation initiatives in the U.S. and Mexico, and the emergence of natural gas as a bridging fuel to a low-carbon economy has fueled the growth of North American natural gas production, which is projected to keep growing in the mid-term to support the increasing LNG exports. Greater introduction of renewables and deeper electrification suppress both supply and demand for natural gas in the long-term. The long lead times of pipeline operation and field exploitation render the timing of natural gas abatement critical to natural gas infrastructure stakeholders. Full integration of the U.S., Canadian, and Mexican natural gas markets implies that the abatement trajectories of the three countries are tightly linked. This paper studies the development of the integrated North American natural gas markets and infrastructure under different assumptions on resource availability, technological progress, and global crude oil prices. We quantify the impact of each scenario by using the North American Natural Gas Model. Our analysis shows that cross-border U.S.-Mexico trade is more resilient under all three shocks compared to U.S.-Canada trade. Increasing Mexican production could drive the growth of the domestic Mexican market instead of reducing U.S.-Mexico trade.
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| 2 |
ID:
176101
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| Summary/Abstract |
Renewable Portfolio Standards (RPS) accelerate renewables deployment but their impact on fuel-fired plants remains ambiguous. North American natural gas consumption has been growing due to its decreasing cost in North America, policy initiatives, and its relatively low CO2 emissions rate compared to coal. In this paper, we study the implications for the natural gas sector of more stringent RPS under different coordination schemes in an integrated North American natural gas market. The scenarios assume that Renewable Energy Certificates generated in each region are traded 1) among all countries, 2) only within each country, and 3) only within model regions. We implement the three policies in four different energy and electricity models to generate projections of future natural gas consumption. Subsequently, we feed regional or country-level consumption changes of each model in each scenario to the North American Natural Gas Model. We find that lower RPS coordination among regions results in increased U.S. natural gas exports to Canada, increased U.S. natural gas prices, and decreased net U.S. natural gas exports to Mexico in the long term. Moreover, international coordination of RPS in the electricity sector leads to smaller price discrepancies in the U.S. natural gas market when compared to the reference scenario.
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