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The U.S. Shale Gas Revolution and Its Effect on International Gas Markets

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  • Aruga, Kentaka

Abstract

This paper investigated whether the effect of the shale gas revolution on the U.S. gas market is still a domestic phenomenon or this revolution is influencing the global natural gas market. We used the Bai-Perron test to identify the break date related to the shale gas revolution and tested the price linkages among the U.S., European and Japanese gas markets for the periods before and after this break date. The result indicated that the U.S. gas market had a price linkage with the international market for the period before the revolution affected the U.S. gas production, but this price linkage disappeared for the period after the revolution. This result implied that the U.S. gas market became independent after the shale gas revolution occurred and that the price linkage between the U.S. and international gas market became weaker after the shale gas revolution occurred.

Suggested Citation

  • Aruga, Kentaka, 2013. "The U.S. Shale Gas Revolution and Its Effect on International Gas Markets," MPRA Paper 49545, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:49545
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    File URL: https://mpra.ub.uni-muenchen.de/49545/1/MPRA_paper_49545.pdf
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    shale gas revolution; natural gas market; structural break;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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