Gas readies for its oil moment

The growth in spot LNG is transforming gas into a globalised commodity market

A need to transact naturally leads to markets. But the very nature of the energy industry—large capital investments, long gestation periods, specificity of assets—can lead to very volatile markets, with high risk and the potential for violent boom-and-bust cycles. As a result, the industry can tend away from fledgling competitive markets and towards natural monopolies. Having one large terminal or pipeline is more efficient than having many small ones. On the flip side, monopolies can often ultimately result in lower output and higher prices. Within non-free market value chains, a government normally takes a hand in regulating prices or ensuring ‘security of supply’—and bring with them new p