Mathematical Models for Evolving Natural Gas Markets

In the past years, natural gas has expanded its significance as an energy source mainly due to its low carbon emissions and low competitive prices as result of new technologies. Furthermore, the regional and global natural gas markets have also been significantly influenced by domestic and international socioeconomic conditions and politics. This chapter discusses the main drivers for the evolution of natural gas markets and the modeling approaches that have been taken to understand such evolutions at regional and global levels. Thereafter, we focus on two well-known natural gas models, a global model (World Gas Model) and a regional model (North American Natural Gas Model). We provide the mathematical formulations and discuss the modeling paradigms that are behind both models. In order to demonstrate the usefulness of these models, we present a numerical case study using the North American Natural Gas Model (NANGAM). We conclude with an outlook of future research and examples of historical energy system transformations due to the appearance of natural gas as a competitive energy source.