Andreas D. Thanos
Gas Policy Specialist
MA DPU, NARUC
12:20 - 12:45
Thursday, 19 September 2019
S2.8 The Role of Government in the Development of LNG Markets
The distance and geography between natural gas producing and consuming regions often makes pipeline delivery of natural gas a costly and complicated affair. LNG has emerged as the best alternative solution circumventing geographic and geopolitical obstacles. The improvement of the needed infrastructure necessary for the development of the LNG market, i.e. LNG facilities both for exports and imports, has been achieved through the cooperation and collaboration of regulators and government officials with the market participants. This cooperation between government and the private sector is essential for the continued growth and success of the market.
Energy Infrastructure Development involves complex decisions by energy officials and regulators. The paper relies on the experience with several projects in the United States and the role government played in the success (or failure) of these projects.
The paper, which examines the steps regulators and energy officials in producing and consuming regions take in order to benefit their constituents, relies on current events and government actions.
Using recent events, the actions of government officials in several countries such as Australia, Bangladesh, Egypt, Cyprus, India, Israel, Jamaica, Japan, Lithuania, Mexico, Papua New Guinea, Poland, Qatar, Russia, Tanzania, the United States and blocks like that European Union are reviewed in order to better understand the role of regulators and government officials, the complexities they faced and how, solving such problems, helps develop a more efficient LNG market.
In addition to the geopolitical events that have had a significant impact on LNG trade, the paper looks at some regulations and new practices that have been established over the past several years, such as LNG bunkering, power generation, heating and industrial use, vehicular fuel and market structure -- privatization and unbundling as well as government-backed financing.
The paper looks at the “learning curve” regulators and government officials both in producing and consuming regions go through. In particular the paper looks at the role of regulators and government officials in
- Establishing/affecting bilateral and multilateral relations;
- Determining understanding and appreciating the need for LNG;
- Providing incentives (financial and legal/regulatory);
- Facilitating the process (permitting, financial/taxation);
- Communicating with constituents and other officials the need for and potential benefits of projects;
- Supporting and/or facilitating the necessary bilateral relations that allow for the development of infrastructure in producing and consuming regions; and
- Assisting in ensuring that policies and market practices (nationally and internationally) evolve to reflect the current status of the market.
A review of energy consumption statistics from a select group of countries/regions will highlight the need for increased natural gas trade across borders and geographic regions.
The paper concludes with a review of a few successful projects and developments that have been supported or initiated by government action that can serve as examples.