This demand is driven by the following:

- The struggle to grow North American gas reserves and production – for the past few years, unconventional gas (CBM, silt/shale, coal) has been the only source of U.S. production growth.
- Rapid growth in regasification terminal capacity in the U.S. and Mexico.
- Barriers to the development and delivery of Alaskan gas to the lower 48 states.
- The almost complete lack of indigenous gas resources in northeast Asia.
- New and emerging markets with massive growth potential in China and India, and smaller markets in Thailand, Singapore, and the Philippines.
- Industrialization in China that is creating an urgent need for power. China has eight of the 10 worst-polluted cities on earth, which means that there are immediate health reasons for cleanly-generated power. Also, that urbanization is producing a growing need for peaking power.
- The environmental premium attached to more emissions-intensive fuels such as coal.
- The development of Canadian tar-sands projects, and Canada’s declining gas export capacity.
- Success in markets outside the region, such as in the U.K. Over the space of a few years, the country has developed the infrastructure and supply necessary to turn it from a gas exporter into a net importer, with gas available from a number of pipeline and LNG import options.
- The growth, liberalization, and gradual commoditization of a global LNG market in which the U.S. and European markets will set prices. Qatar will be a swing supplier, and arbitrage opportunities will favor large portfolio players with widespread sources of supply and captive shipping.

Pipeline gas demand will mirror LNG demand growth, but is more constrained by cross-border pricing and ownership issues. Prospective pipeline projects to deliver gas from West and East Siberia, Sakhalin, Kazakhstan, and Turkmenistan into northeast Asia, and via the Trans-Asian system into southeast Asia, have been discussed for more than a decade, but are hampered by infrastructure costs, competition between importing countries, and (at least in the case of northeast Asia) an absence of viable commercial frameworks and pricing mechanisms.

Other key concerns of Asia Pacific Economic Cooperation officials are capacity expansion, education, and knowledge sharing, all of which are also prominent on the APGAS agenda. One need look no further than Malibu Beach in California, and the current uninformed fuss being created there over potential imports of LNG into that energy-hungry state, to see the need for informed and educated debate of real issues, rather than the frivolous, loud, graceless, and ignorant public evangelism about imagined threats to real estate values, designed to generate fear at the expense of rational discourse about sustainable access to clean and secure energy.

In 1999, the European Gas Regulatory Forum of Madrid – commonly known as The Madrid Forum – was established under the auspices of the European Commission to consider the creation of an internal European gas market. The Madrid Forum was a pioneering attempt to promote dialogue and debate between representatives of E.U. Member States, national regulatory authorities, pipeline operators, gas suppliers and traders, consumers, network users, and energy exchanges. It convenes once or twice per year, always in Madrid, and addresses problems associated with cross-border trade in gas, tariffs, management of interconnection capacity, and technical or commercial barriers to the creation of an open and fully operational European gas market.

Taking a leaf from the Madrid Forum book, the first APGAS Forum was held in September, 2005, in Perth (the oil and gas capital of Australasia, the capital of Western Australia, and one of the world’s most prosperous – and isolated – cities). This event was so successful that APEC energy ministers unanimously agreed that a second Forum (APGAS 2006) should be held in Perth this year.

But APEC of course is not Europe. It is a loosely knit alliance of far-flung countries with vastly different cultures, initially assembled to discuss geopolitics in the late 80s, but quickly losing interest. With the political neglect of its participants, it has most notably evolved into a forum for discussing trade matters and energy security. It is a far cry from the impeccably structured European trading bloc and market, bound by its one set of trading rules, regulated by a single Commission, and governed by its own parliament. The original 12 APEC member countries that met in 1989 have increased to 21, covering half the earth’s surface, accounting for a third of its population, and consuming 60 percent of its energy – not to mention their wide array of cultures and collective reputation for fierce independence.

The APGAS philosophy is unique. Its message is a simple one – that the gas industry must get better at convincing people of the benefits of natural gas as a fuel and feedstock, and that governments need to provide market frameworks to encourage the use of gas. APGAS provides a platform for regulators, policy makers, private and NOC gas and LNG suppliers, pipeline and sea-borne tanker operators, financiers, traders, and gas buyers to actively debate pressing energy issues and find solutions, with the aim of increasing the penetration of gas into regional energy markets and hastening the onset of the “Century of Gas.” APGAS participants spend two days discussing and networking as they work to develop a series of pithy recommendations that are presented to Energy Ministers for their endorsement, action, and (if necessary) funding.

Although it is only two years old, APGAS has already proven to be an effective way, for example, to get Australian LNG suppliers and Russian gas suppliers together with their potential customers in northeast Asia to discuss their problems and air their complaints. It has also enabled U.S. policy makers and regulators to get together with their counterparts throughout APEC to workshop, socialize, and discuss the way the world should work.

This year’s APGAS got off to a spectacular start, with the Australian Minister for Industry, Tourism, and Resources (Ian McFarlane) going head to head with the Premier of Western Australia (Alan Carpenter, MLA) over the issue of the reservation or “quarantining” of gas resources in Western Australia for domestic use. This occurred during the opening remarks to the Forum, much to the delight of the Australian media. Then the Thai Energy Minister, Viset Choopiban, discussed the growth of his country’s industrial base and demand for gas and LNG; the FERC Chairman, Joseph T. Kelliher, spoke of the energy view from North America; and Woodside CEO Don Voelte urged producers to develop projects as quickly as possible with the support of streamlined government approvals processes. They were followed by Michael J. Economides, ET’s editor, who challenged everyone with provocative views of the future. (It hasn’t peaked, but its value will increase anyway; natural gas is the fuel of the future, but will be commercialized not only as conventionally transported gas, but also by unexpected ways and sources; and as for the energy trade in general, much of the world’s remaining hydrocarbon resources are located in countries that have high sovereign risk, such as Venezuela and Iran, or are controlled by bully-boy state monopolies, such as Gazprom.) Other presentations were made by Darcel Hulse of Sempra on the Asian-North American gas interconnection; James Slutz of the DOE on the importance of gas trade to U.S. supply security; and Gary Smith of Golar LNG on trends in global shipping.

On the supply side, significant attention was paid to Australia, Indonesia, Malaysia, and Russia as gas and LNG producers of global significance. On the demand side, North America grabbed much of the attention. For the U.S., the paucity of domestic production at competitive prices has been the catalyst for dozens of LNG regasification terminal and supply proposals on the eastern seaboard, the Gulf Coast, and the west coast (including terminals in Mexico, such as the one being built by Sempra in Baja California, and those in Canada, designed to supply gas into the western states). It is the permitting, planning, and approvals processes that are currently delaying an increase in U.S. import capacity.

The purpose of the workshops, and the ultimate purpose of APGAS, is to generate recommendations for action that will be delivered to the APEC Ministers when they meet in Darwin in 2007.