Some economists believe the global market in natural gas may one day surpass the international trade of crude oil. So, is there an organization, such as the Organization of Petroleum Exporting Countries, far behind?
Most energy economists and analysts say such a cartel, wielding power to dictate global prices and supplies, is unlikely to emerge even if liquefied natural gas (LNG) becomes a common commodity that circles the globe in a fleet of huge tankers.
Daniel Yergin, whose Pulitzer-winning book "The Prize" tracked the emergence of the global oil industry, says the two markets are different. He doubts the OPEC analogy would hold for natural gas.
For example, he says, LNG production will be spread among more countries and there is a need for more interdependence between producers and consumers than is the case for oil. Also, most natural gas still will be delivered by pipeline, herladstandard.com reported.
As Saudi Arabia is the king of oil, Russia may become a dominant force in natural gas markets. It holds 30 percent of the world's gas reserves. Iran is next with 15 percent. Iran and eight other OPEC countries together account for 43 percent of the world's proven natural gas reserves, heraldstandard.com reported.
But, says energy economist David Victor, huge gas reserves will not mean success in LNG. He predicts the lead countries in a global LNG market will not be those with the deepest reserves, but those that create the best climate for outside private investment to attract the technology needed for LNG processing.
"LNG is much more capital intensive than oil," said Victor, director of the energy and sustainable development program at Stanford University.
Producers will want to run LNG operations at full capacity to recoup the costs, Victor says. In contrast, OPEC's clout in the oil market stems to a great extent from keeping capacity in reserve--cutting back to boost prices or using excess capacity to time the markets.
Those countries most likely to pursue a cartel also are least likely to develop a favorable climate to attract needed outside investors, he suggested.
Donald Norman, an economist for the Manufacturers Alliance/MAPI, says the big players in future LNG trading will be those that commit to building expensive facilities.
Norway, with just 1.4 percent of the world's natural gas reserves, could become a significant LNG exporter by constructing plants, Norman said in a recent report on the emerging LNG markets.
Others, however, say they already see signs that OPEC countries will try to dictate LNG prices and supplies.
"No question. They say they will," says George Sterzinger, executive director of the Renewable Energy Policy Project. "Just as with crude oil, the future control of gas is determined by who has the reserves. OPEC will have a dominance that is at least comparable to what they have in crude."

Oil prices jumped by a third last year and are near $50 a barrel.

China's and India's state oil companies are on the brink of snaring their biggest overseas purchases, likely boosting the cost of already pricey assets and raising concerns over future returns.
Big deals in oil-rich Iran, Russia and Canada are imminent as the world's two most populous nations scramble to satisfy surging oil demand and pick up assets that are either politically or commercially untenable for Western companies.
"They've got a big hole in terms of energy requirements. This must place some pressure on the value of assets," said Rob Singh, manager for Asia at upstream divestment consultancy IndigoPool.
Asian oil firms already have sunk billions of dollars in projects around the world, including in countries that are off-limits to oil majors such as Sudan, and picked up scraps hived off by cost-cutting Western oil companies.
The next phase will bring them in competition with Western oil majors, setting the stage for real asset inflation, analysts said. The worldwide search for oil reserves also puts sellers in the driver's seat, potentially driving up values even more.
Canada's prime minister will visit Beijing later this week amid talk of several deals involving the country's oil sands, the latest in a parade of visits by heads of oil-rich nations to the world's fastest-growing consumer, independent-bangladesh.com reported.
India's Oil and Gas Corp. is in talks with Russia for part of the 1 million-barrel-per-day YUKOS Yuganskneftegaz unit, which Moscow officials say may also be offered to China National Petroleum Corp.
ONGC and China's number two oil group, Sinopec Group, are taking the lion's share of development deals for Iran's 3 billion-barrel Yadavaran oilfield, off limits to US firms.
And number three Chinese producer CNOOC Ltd. is mulling a major acquisition, possibly the Asia assets of US oil company Unocal Corp. or the entire $12.2 billion company.
Western oil firms face shareholder scrutiny of acquisitions, often limiting them to projects that offer stable returns or take-overs that are in line with oil price expectations companies aren't usually hindered by shareholder demands for predictable pay-backs, putting them in a position to pay a premium for assets. But times are changing. CNOOC shares in Hong Kong slid more than 4 per cent in the days following news of its acquisition plans on Jan. 6.
"The risk is that Beijing may appear willing to accept lower returns than the international companies," Cazenove analyst Magnus Gunn wrote in a research note.
"Much depends though on what is now an appropriate long-term oil price and how China chooses to enhance its energy supply security. Spain's Repsol YPF learned a key lesson in 1999 when it paid $15 billion for Argentina's YPF just as the Argentine economy headed for a crisis.
The enlarged company's market value at one point dropped to less than the purchase price. Its value has now doubled to $30 billion, but shares are off 16 percent from end 1999, versus France's Total's 22 per cent gain and Italy's Eni's 70 percent jump.
Oil prices jumped by a third last year and are near $50 a barrel, a far cry from the sub-$20 levels that prevailed during the last bout of mega-mergers and acquisitions in the late 1990s.
Deal volume has fallen from $135 billion in 2001 to about $32 billion in the first half of 2004, Citigroup said. Part of the reason is that companies are holding on to reserves because of sizzling oil prices.
Canadian producer EnCana said in October that bids for its Ecuador oil fields, with an estimated price tag of about $1.5 billion, were too low. ONGC and Chinese firms are in the running for those properties.
And CNOOC and Sinopec failed to buy a stake in Kazakhstan's Kashagan in 2003 as existing partners blocked BG Group's $1.23 billion sale of its stake.
Japan's Inpex last year sealed a $2 billion deal to develop the high-risk Azadegan oilfield in Iran, but other pending deals face hurdles. Iranian negotiations are notoriously long and China and Russia's political relations are rocky.

On Saturday, PEMEAS, one of Red Herring's Top 100 Innovative Companies for 2004, received a German technology award. The company's fuel-cell won one of three awards in a contest with entries ranging from a high-speed magnetic train, an intelligent glow plug, a colon cancer test, and a device to destroy viruses that have found their way into medicines.
The Innovation Award of German Industry is regarded as the top domestic prize a German business can win for inventing new technology. PEMEAS will join past winners such as BMW, Philips, and Leica Microsystems.
The company makes high-temperature membranes for proton exchange membrane (PEM) fuel cells, which could eventually power portable electronics, cars, and buildings. Fuel cells produce power by mixing fuel with air and water between a thin, reactive film membrane. Such cells are expected to be smaller and lighter, and last up to 10 times longer than batteries.
Fuel cells are still unproven in the mainstream commercial marketplace, but PEMEAS is well-placed if the technology takes off. The company, located in Frankfurt am Main, Germany, has more than a dozen customers, including Motorola and Honda. Horst-Tore Land, the company's CEO, said the award will increase PEMEAS's visibility, and help the company attract future financing. It will need the help. The company faces stiff competition from around the world, especially from DuPont's Nafion, the most widely used membrane, redherring.com reported.
PEMEAS' Celtec-brand membrane is made of polybenzimidazole, a heat-resistant polymer, as well as conductive materials. It can withstand temperatures of up to 200 degrees Celsius, rendering nearly a third of current fuel cell components unnecessary. "The fuel cell [technology] of PEMEAS is, at the time being, the most advanced concept," said Ekkehard Wille, secretary general of the trade group that organizes the award.
Land said he believes PEMEAS won the award for successfully introducing its technology to customers last year. He expects one customer to launch a portable-electronics fuel cell this year, and several others to follow shortly. "The award is not just about science and technology, but about translating science and technology into commercial success," he said. He wouldn't disclose revenues or profits.
PEMEAS entered the competition in the startup category, for enterprises five years old or younger. Siemens won the prize in the large-scale enterprise category for its new body-imaging technology, Total Imaging Matrix (TIM). TIM allows magnetic resonance tomographies of an entire body in one take.

Oil consumption in China will continue rising in 2005 as the energy-hungry giant seeks to power its fast-paced economy but at a slower pace than previous years, industry executives said.
Consumption of crude oil will jump to 320 million tons, an almost 12 percent rise over the 288 tons used last year, Chen Geng, general manager of China National Petroleum Corp (CNPC) said on the company's website.
As a whole, the Chinese oil industry is forecasting an overall slowing in growth after demand rose 14 percent in 2004, Chen said.
"Domestic demand for oil and petrochemical products remains robust and consumption keeps rising, providing a enormous market for oil companies," Chen said, news.yahoo.com reported.
The Paris-based International Energy Agency (IEA) this week predicted that demand would remain strong although an expected slowing of the world economy in 2005 and a lagging effect of high prices should ease demand pressure.
"Growth is set to slow in 2005 but will still be led by China and non-OECD Asia," the IEA said in its report.
For China, already the world's second largest user of oil after the United States, consumption of refined oil products such as diesel and petrol is likely to rise by 8.3 percent to 170 million tons this year.
That figure is down from growth of 19 percent last year amid a cooling in certain industries, Chen.
"Growth will decelerate this year as the government's measures to cool down overheated sectors take effect," said Gong Jingshuang, a CNPC oil market analyst said.
In late 2003, Beijing began implementing a series of curbs aimed at slowing its runaway economy by targeting overheated industries such as construction, cement and automobiles.
Chen added that demand for ethylene would increase by seven percent to 19.4 million tons this year, while consumption of other major petrochemical products was expected to rise by up to 8.0 percent.
CNPC, China's largest oil producer, posted a record profit of over 110 billion yuan (13.3 billion US) in 2004, up 50 percent on strong oil prices and strong domestic demand.

Given variations in wind conditions, the Berkshire turbines are expected to produce 3.75 megawatts, or enough to supply roughly 4,500 homes a year.

Gusts of wind from atop a mountain in the Berkshires could soon help light the homes of residents in four area communities.
The municipal light departments of Ipswich, Marblehead, Peabody, and Wakefield are among 14 statewide that have agreed to purchase power from a planned 15-megawatt wind turbine facility in the Berkshires.
The Massachusetts Municipal Wholesale Electric Company last month entered into a 22-year contract with Berkshire Wind Power LLC to purchase all of the electric energy produced by the planned facility. MMWEC is contracting with the 14 participating municipal utilities to supply them with the power, according to company spokesman David Tuohey.
Ludlow-based MMWEC is a 30-year-old nonprofit corporation that is the primary power supplier to 29 municipal utilities.
The 14 light departments participating in the Berkshire purchase belong to a three-year-old group within MMWEC that is interested in purchasing wind power.
Berkshire Wind Power LLC, a subsidiary of Colorado-based Distributed Generation Systems Inc., intends to build the 10-turbine facility atop Brodie Mountain in Hancock.
Provided it can complete financing, Berkshire Wind Power LLC plans to begin construction this spring on the $23- to $24-million project, according to William Sheperdson, consultant to Distributed Generation Systems on the project, boston.com reported.
The turbines are expected to begin generating power by the end of the year, he said.
Tuohey said the contract represents MMWEC's first purchase of wind power.
"But it's not different from what we do," he said, noting that MMWEC seeks opportunities in the market for contracts that "help our members meet their power needs at the lowest cost possible."
The agreement calls for MMWEC to purchase the wind power at a fixed price of 3.65 cents per kilowatt hour over the course of the 22-year contract. That is well below the current and projected prices MMWEC is paying for other power sources.
"It's a great deal economically," Tuohey said.
The wind power will contribute only a small fraction of the 825 megawatts of power that MMWEC supplies to its members. Given variations in wind conditions, the Berkshire turbines are expected to produce 3.75 megawatts, or enough to supply roughly 4,500 homes a year.
HealthLink, a nonprofit group concerned with local environmental issues, including pollution from the Salem Harbor power station, praised the wind power deal.
"Part of the challenge of this country is to figure out a way to transition away from the polluting" forms of energy, said Jane Bright of Marblehead, a HealthLink volunteer. "There have been tremendous economic incentives for oil and coal and nuclear, and we've got to catch up on wind."
She said the contract with Berkshire "helps create demand and it will help push the technology to become more efficient."
Sheperdson said Berkshire Wind Power is raising funds through investors to build the plant. Federal energy tax credits will help meet future operating costs. Financing would "be almost impossible" without a long-term buyer of the power, he said.
The Berkshire purchase comes amid growing interest among Massachusetts communities in developing their own wind turbines. Bright noted that Hull has a turbine in place and is considering another.
HealthLink and Marblehead officials have explored the idea of placing a turbine at the old town landfill. Studies indicate there is enough wind there, but the effort is on hold while the town focuses on state-mandated environmental work at the site.
Ipswich is considering a wind turbine on town-owned land at the end of Farm Road, overlooking the ocean. A recent study showed there is enough wind to place such a facility there, according to Ray Shockey, general manager of the Ipswich Light Department.
Officials from the participating light departments said a desire to support wind energy was part of their motivation to participate in the Berkshire purchase.
"I think it's good to make a commitment to renewable energy resources, things that don't pollute," said Bill Waters, general manager of the Peabody Municipal Light Plant.
But the officials say there are other benefits to the wind purchase.