Gas Exporting Countries Forum (GECF): Cartel Lite?
link to page 1 
August 2, 2018
Gas Exporting Countries Forum (GECF): Cartel Lite?
Background on the GECF
Note: Units = billion cubic meters (bcm).
From 2013 and 2017, global natural gas production and
Several key natural gas exporters and natural gas producers
consumption grew about 9%. However, as part of the
are not members of the GECF, with the United States being
overall fuel mix, which rose 5%, the contribution of natural
the most prominent as the world’s largest producer and
gas has declined 1 percentage point to 23% during the same
consumer of natural gas. The United States is also a fast-
time period, because renewable energy grew more.
growing exporter of LNG. Australia, the second-largest
The Gas Exporting Countries Forum (GECF) was founded
LNG exporter and 7% of the overall natural gas export
in 2001 for the purpose of maximizing the value of natural
market, has also elected not to join the GECF.
gas; developing short-, medium-, and long-term analysis
Turkmenistan, the fourth-largest natural gas reserve holder
and forecasting; facilitating cooperation on issues of
and the major supplier to China, is also not a member of the
common interest among members; promoting natural gas as
GECF. Azerbaijan, a key regional supplier, and Norway,
a fuel; and positioning the GECF as an internationally
the third-largest natural gas exporter with 10% of the
recognized organization. Members of the GECF—Algeria,
market, are nonmember GECF observers, as are five other
Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria,
countries.
Qatar, Russia, Trinidad and Tobago, United Arab Emirates,
Functions of the GECF
and Venezuela (seven GECF members, italicized above, are
also members of the Organization of the Petroleum
The GECF acts as a forum for collecting information and
Exporting Countries [OPEC])—hold about 62% of the
disseminating it to member states. In line with this goal, the
world’s natural gas reserves, control about 38% of
GECF performs four main tasks:
production, and supply 43% of exports. (See Table 1 for a
country breakdown of exports.) Russia is overall the
First, the GECF collects data on member states. It
world’s largest exporter of natural gas, mostly by pipeline,
publishes an annual Statistical Bulletin in December of
and Qatar is the largest exporter of liquefied natural gas
each year that details the production, trade, and natural
(LNG), which is a way to economically transport large
gas reserves of member states. The Statistical Bulletin
quantities of natural gas long distances, when pipelines are
also includes economic and demographic information
not feasible.
about member states. The first Statistical Bulletin was
published in December 2017 and contained data from
Table 1. GECF Natural Gas Exports, 2017
2016.
% of World
Second, the GECF produces reports that project gas
Country
Exports (bcm)
Exports
market outlooks for member states. The GECF releases
an annual Gas Outlook report that forecasts the state of
Russia
230.9
20%
the natural gas market through 2040. The GECF also
Qatar
121.8
11%
publishes reports focusing on short-term projections.
Algeria
53.0
5%
Third, the GECF collects and publishes a number of
Nigeria
27.8
2%
papers, lecture reports, expert commentary,
presentations, and speeches that it makes available to
Bolivia
14.9
1%
representatives from member countries. The reports
Trinidad and
cover a number of technical issues pertaining to the
Tobago
13.4
1%
global gas trade.
Iran
12.5
1%
Finally, the GECF holds annual ministerial meetings,
United Arab
attended by the energy ministers of member countries,
Emirates
7.7
1%
and gas summits, attended by the heads of state of
GECF member countries. The GECF also hosts a
Equatorial Guinea
4.8
<1%
number of lower-level meetings involving specialized
Libya
4.4
<1%
bodies of the GECF. All three types of meetings
facilitate discussion on issues pertaining to gas
Egypt
1.2
<1%
production, best practices, and the international gas
trade. The GECF also hopes to promote joint investment
Venezuela
0.0
0%
in natural gas projects among members.
Source: BP Statistical Review of World Energy, 2018.
https://crsreports.congress.gov
Gas Exporting Countries Forum (GECF): Cartel Lite?
Comparison with OPEC
producers and consumers. LNG projects have high capital
Both OPEC and the GECF have similar stated missions.
costs, and new LNG projects have historically been built
Both purport to coordinate the policies of member states
after securing 20-year take-or-pay contracts requiring a
and to ensure that there is a healthy market for petroleum
buyer to purchase an annual quantity of LNG for a price
and natural gas exports, respectively. However, the means
indexed to the price of oil. Despite some increases in the
used to achieve these goals differ between the two
amount of LNG traded on the spot market, these long-term
international organizations. OPEC, which has been
contracts still make up the majority of LNG trade.
described as a cartel by many Western observers, regularly
attempts to influence the global price of oil by imposing
Concerns for Congress
production quotas on its members. These quotas can be
Some in the United States may be concerned with the
used to encourage members to either limit or increase
membership overlap between the GECF and OPEC. While
production based on the production targets of the
some of the overlap can be attributed to many oil-producing
organization. For example, OPEC imposed production cuts
states also having reserves of natural gas, Congress may
on its members during the first half of 2018, resulting in an
want to consider the political influence that OPEC may
end to the global glut in oil supply. (See CRS Insight
have over the GECF. The energy ministers from states that
IN10892, OPEC and Non-OPEC Crude Oil Production
are OPEC and GECF members attend meetings for both
Agreement: Compliance Status, by Phillip Brown.)
organizations, and could attempt to push a unified agenda.
The GECF has repeatedly denied that it has intentions of
There are two factors that will likely limit the influence of
natural gas price setting. Shortly after the signing of the
OPEC members in the GECF who may aim to make the
charter of the GECF in December 2008, then Russian Prime
GECF more like OPEC. First, Russia plays a significant
Minister (and current President) Vladimir Putin called
role in the GECF as the largest gas producer and exporter in
accusations that the GECF would become an OPEC-like
the forum. Russia is not a member of OPEC, and although
cartel “baseless.” However, at a joint press conference with
it has been cooperating with the cartel on oil production,
President Trump on July 16, 2018, Putin suggested Russia
Russia may use its influence to block actions not in its
and the United States as two major producers should
interests. Second, the previously discussed structural
cooperate on managing natural gas prices. To date, the
limitations on forming a natural gas cartel outlined above
GECF has not imposed production quotas on member
act as a natural damper on the ambitions of OPEC members
states, and its charter does not have any provisions that
in the GECF seeking to replicate the modus operandi of
would give the body the authority to introduce such quotas.
OPEC.
Structural Constraints on a Natural Gas Cartel
U.S. natural gas exports may benefit from a more mature
There are two main structural aspects of the global natural
international gas market. If the GECF is successful in
gas market that make it difficult for the GECF to act like
promoting infrastructure for importing natural gas or is able
OPEC. First, the global natural gas market is not truly
to create greater demand for natural gas by convincing
global. Natural gas is a regional commodity, and prices
countries to make investments in natural gas power plants
vary between regions. This is because it is expensive to
and other sectors, for example, then U.S. exporters may
transport natural gas long distances, so most of it is
have a larger market for their natural gas. One possible
consumed relatively close to where it is produced. Gas is
downside for U.S. exporters is that if the GECF’s efforts to
cheaper in regions with more readily accessible gas. For
promote the use of natural gas in importing countries is
example, the United States has one of the lowest gas prices
accompanied by a successful drive to increase the ability of
in the world. Natural gas shipped between markets where
GECF member states to export more natural gas, U.S. gas
pipelines cannot reach (for example, between North
exporters may face more competition. Given the long-term
America and Europe) must be liquefied first. Converting
nature of contracts, U.S. companies could be blocked from
gas to LNG, which contracts the volume some 600 times,
certain markets for many years.
requires cooling the gas to -260°F and storing it in specially
constructed tanks. The costs of liquefying and transporting
The United States may want to consider the potential
natural gas as LNG are key factors in the pricing of
impact that joint investments by GECF members may have
imported LNG in different markets. The price of imported
on the LNG markets. Significant investments in
LNG in a market also depends on the regional and seasonal
liquefaction capacity announced by the GECF could signal
level of demand in the market, storage capacity, and other
that LNG production of GECF members involved would be
factors. Unlike the oil market, where increases in the price
expected to increase in the near to medium term. While
of oil generally affect all regions, price spikes in the natural
such co-investment may also signal greater cooperation,
gas market are often confined to a single region. As a result
some may fear the potential for collusion among GECF
of differences in the price of natural gas between markets,
members.
cutting production in one market does not guarantee higher
prices in another market.
Michael Ratner, Specialist in Energy Policy
Second, the majority of natural gas produced and sold is
IF10939
done so on the basis of long-term supply contracts between
https://crsreports.congress.gov
Gas Exporting Countries Forum (GECF): Cartel Lite?
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10939 · VERSION 2 · NEW
August 2, 2018
Gas Exporting Countries Forum (GECF): Cartel Lite?
Background on the GECF
Note: Units = billion cubic meters (bcm).
From 2013 and 2017, global natural gas production and
Several key natural gas exporters and natural gas producers
consumption grew about 9%. However, as part of the
are not members of the GECF, with the United States being
overall fuel mix, which rose 5%, the contribution of natural
the most prominent as the world’s largest producer and
gas has declined 1 percentage point to 23% during the same
consumer of natural gas. The United States is also a fast-
time period, because renewable energy grew more.
growing exporter of LNG. Australia, the second-largest
The Gas Exporting Countries Forum (GECF) was founded
LNG exporter and 7% of the overall natural gas export
in 2001 for the purpose of maximizing the value of natural
market, has also elected not to join the GECF.
gas; developing short-, medium-, and long-term analysis
Turkmenistan, the fourth-largest natural gas reserve holder
and forecasting; facilitating cooperation on issues of
and the major supplier to China, is also not a member of the
common interest among members; promoting natural gas as
GECF. Azerbaijan, a key regional supplier, and Norway,
a fuel; and positioning the GECF as an internationally
the third-largest natural gas exporter with 10% of the
recognized organization. Members of the GECF—Algeria,
market, are nonmember GECF observers, as are five other
Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria,
countries.
Qatar, Russia, Trinidad and Tobago, United Arab Emirates,
Functions of the GECF
and Venezuela (seven GECF members, italicized above, are
also members of the Organization of the Petroleum
The GECF acts as a forum for collecting information and
Exporting Countries [OPEC])—hold about 62% of the
disseminating it to member states. In line with this goal, the
world’s natural gas reserves, control about 38% of
GECF performs four main tasks:
production, and supply 43% of exports. (See Table 1 for a
country breakdown of exports.) Russia is overall the
First, the GECF collects data on member states. It
world’s largest exporter of natural gas, mostly by pipeline,
publishes an annual Statistical Bulletin in December of
and Qatar is the largest exporter of liquefied natural gas
each year that details the production, trade, and natural
(LNG), which is a way to economically transport large
gas reserves of member states. The Statistical Bulletin
quantities of natural gas long distances, when pipelines are
also includes economic and demographic information
not feasible.
about member states. The first Statistical Bulletin was
published in December 2017 and contained data from
Table 1. GECF Natural Gas Exports, 2017
2016.
% of World
Second, the GECF produces reports that project gas
Country
Exports (bcm)
Exports
market outlooks for member states. The GECF releases
an annual Gas Outlook report that forecasts the state of
Russia
230.9
20%
the natural gas market through 2040. The GECF also
Qatar
121.8
11%
publishes reports focusing on short-term projections.
Algeria
53.0
5%
Third, the GECF collects and publishes a number of
Nigeria
27.8
2%
papers, lecture reports, expert commentary,
presentations, and speeches that it makes available to
Bolivia
14.9
1%
representatives from member countries. The reports
Trinidad and
cover a number of technical issues pertaining to the
Tobago
13.4
1%
global gas trade.
Iran
12.5
1%
Finally, the GECF holds annual ministerial meetings,
United Arab
attended by the energy ministers of member countries,
Emirates
7.7
1%
and gas summits, attended by the heads of state of
GECF member countries. The GECF also hosts a
Equatorial Guinea
4.8
<1%
number of lower-level meetings involving specialized
Libya
4.4
<1%
bodies of the GECF. All three types of meetings
facilitate discussion on issues pertaining to gas
Egypt
1.2
<1%
production, best practices, and the international gas
trade. The GECF also hopes to promote joint investment
Venezuela
0.0
0%
in natural gas projects among members.
Source: BP Statistical Review of World Energy, 2018.
https://crsreports.congress.gov
Gas Exporting Countries Forum (GECF): Cartel Lite?
Comparison with OPEC
producers and consumers. LNG projects have high capital
Both OPEC and the GECF have similar stated missions.
costs, and new LNG projects have historically been built
Both purport to coordinate the policies of member states
after securing 20-year take-or-pay contracts requiring a
and to ensure that there is a healthy market for petroleum
buyer to purchase an annual quantity of LNG for a price
and natural gas exports, respectively. However, the means
indexed to the price of oil. Despite some increases in the
used to achieve these goals differ between the two
amount of LNG traded on the spot market, these long-term
international organizations. OPEC, which has been
contracts still make up the majority of LNG trade.
described as a cartel by many Western observers, regularly
attempts to influence the global price of oil by imposing
Concerns for Congress
production quotas on its members. These quotas can be
Some in the United States may be concerned with the
used to encourage members to either limit or increase
membership overlap between the GECF and OPEC. While
production based on the production targets of the
some of the overlap can be attributed to many oil-producing
organization. For example, OPEC imposed production cuts
states also having reserves of natural gas, Congress may
on its members during the first half of 2018, resulting in an
want to consider the political influence that OPEC may
end to the global glut in oil supply. (See CRS Insight
have over the GECF. The energy ministers from states that
IN10892, OPEC and Non-OPEC Crude Oil Production
are OPEC and GECF members attend meetings for both
Agreement: Compliance Status, by Phillip Brown.)
organizations, and could attempt to push a unified agenda.
The GECF has repeatedly denied that it has intentions of
There are two factors that will likely limit the influence of
natural gas price setting. Shortly after the signing of the
OPEC members in the GECF who may aim to make the
charter of the GECF in December 2008, then Russian Prime
GECF more like OPEC. First, Russia plays a significant
Minister (and current President) Vladimir Putin called
role in the GECF as the largest gas producer and exporter in
accusations that the GECF would become an OPEC-like
the forum. Russia is not a member of OPEC, and although
cartel “baseless.” However, at a joint press conference with
it has been cooperating with the cartel on oil production,
President Trump on July 16, 2018, Putin suggested Russia
Russia may use its influence to block actions not in its
and the United States as two major producers should
interests. Second, the previously discussed structural
cooperate on managing natural gas prices. To date, the
limitations on forming a natural gas cartel outlined above
GECF has not imposed production quotas on member
act as a natural damper on the ambitions of OPEC members
states, and its charter does not have any provisions that
in the GECF seeking to replicate the modus operandi of
would give the body the authority to introduce such quotas.
OPEC.
Structural Constraints on a Natural Gas Cartel
U.S. natural gas exports may benefit from a more mature
There are two main structural aspects of the global natural
international gas market. If the GECF is successful in
gas market that make it difficult for the GECF to act like
promoting infrastructure for importing natural gas or is able
OPEC. First, the global natural gas market is not truly
to create greater demand for natural gas by convincing
global. Natural gas is a regional commodity, and prices
countries to make investments in natural gas power plants
vary between regions. This is because it is expensive to
and other sectors, for example, then U.S. exporters may
transport natural gas long distances, so most of it is
have a larger market for their natural gas. One possible
consumed relatively close to where it is produced. Gas is
downside for U.S. exporters is that if the GECF’s efforts to
cheaper in regions with more readily accessible gas. For
promote the use of natural gas in importing countries is
example, the United States has one of the lowest gas prices
accompanied by a successful drive to increase the ability of
in the world. Natural gas shipped between markets where
GECF member states to export more natural gas, U.S. gas
pipelines cannot reach (for example, between North
exporters may face more competition. Given the long-term
America and Europe) must be liquefied first. Converting
nature of contracts, U.S. companies could be blocked from
gas to LNG, which contracts the volume some 600 times,
certain markets for many years.
requires cooling the gas to -260°F and storing it in specially
constructed tanks. The costs of liquefying and transporting
The United States may want to consider the potential
natural gas as LNG are key factors in the pricing of
impact that joint investments by GECF members may have
imported LNG in different markets. The price of imported
on the LNG markets. Significant investments in
LNG in a market also depends on the regional and seasonal
liquefaction capacity announced by the GECF could signal
level of demand in the market, storage capacity, and other
that LNG production of GECF members involved would be
factors. Unlike the oil market, where increases in the price
expected to increase in the near to medium term. While
of oil generally affect all regions, price spikes in the natural
such co-investment may also signal greater cooperation,
gas market are often confined to a single region. As a result
some may fear the potential for collusion among GECF
of differences in the price of natural gas between markets,
members.
cutting production in one market does not guarantee higher
prices in another market.
Michael Ratner, Specialist in Energy Policy
Second, the majority of natural gas produced and sold is
IF10939
done so on the basis of long-term supply contracts between
https://crsreports.congress.gov
Gas Exporting Countries Forum (GECF): Cartel Lite?
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10939 · VERSION 2 · NEW