ABSTRACT
The bulk of growth in demand for natural gas is expected to come from the large industrialized countries of China, India and the Middle East. In India and China, gas use has been relatively less important than other fossil fuels like coal and oil, and increased natural gas use will likely be at the expense of oil and coal. In China, a slowdown in primary energy demand occurred, which slowed growth in demand for gas. The intensification of Chinas environmental policy should be broadly beneficial in the longer term for gas. China has large resources, but because of complex geology, high drilling costs, an immature gas industry and scarcity of water, there are constraints on production. Further government involvement will continue to be important at the exploration and extraction level of the industry. There are still many government-owned oil and gas companies around the world involved at this level, along with government involvement in resource development rights and royalties.
