The major natural gas-consuming countries of the United States, Europe and Asia should work cooperatively to block leading gas exporters from creating an OPEC-like organization for gas, Rep. Ileana Ros-Lehtinen (R-FL) said Monday in a letter to Secretary of State Condoleeza Rice.

The letter to Rice comes a week ahead of an April 9 meeting in which a consortium of gas-rich countries composed of Russia, Iran, Qatar, Venezuela and Algeria is due to be formally organized in the Qatari capital of Doha, according to press reports (see Daily GPI, March 20). The countries are scheduled to meet at the Gas-Exporting Countries Forum, an organization that was founded in 2001 to unite the countries that together control more than 70% of the world’s natural gas reserves.

Iranian, Russian and Venezuelan officials have all expressed a strong interest in creating a natural gas organization that would mirror OPEC.

“The creation of this cartel would pose a major and long-term threat to the world’s energy supply,” said Ros-Lehtinen, a member of the House Foreign Affairs Committee. “We must vigorously oppose the establishment of this global extortion racket.”

While the U.S. is largely self-sufficient in natural gas, its imports of liquefied natural gas (LNG) are projected to increase rapidly over the next few years, according to the House committee. Europe already is heavily reliant on Russia for almost of its gas needs, and will become increasingly vulnerable over the next decade. Japan, South Korea and other U.S. allies are big consumers of imported gas, and countries such as China and India are projected to rapidly increase their consumption in future years.

In her letter to Rice, Ros-Lehtinen called on the U.S. to:

Steve Thumb, principal of Arlington, VA-based Energy Ventures, believes the creation of a gas cartel is very debatable. “I don’t think the market’s there for them to control,” he told NGI. Unlike with oil, most LNG is sold under long-term contracts, and “very little” is sold in the spot market, Thumb said.

In recent testimony before a House committee, Daniel Yergin of Cambridge Energy Research Associates said establishment of a gas cartel-like organization was inevitable, but he did not believe producing countries could control the international gas market in the same way the Organization of the Petroleum Exporting Countries (OPEC) has influenced global oil prices and supplies.

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