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In an article for Wiley’s Climate and Energy, Senior Managing Director Jeff D. Makholm examines the factors that have contributed to the long-term divergence between North American and international natural gas markets. Drawing on more than a century of industry development and regulatory evolution, he explores how market structures, infrastructure investment, and regulatory frameworks can influence the availability and cost of natural gas across regions.
The ongoing 2026 international energy crisis, following the Iran War and the subsequent closing of the Strait of Hormuz, provides a backdrop for examining differences between North American and international natural gas markets. While crude oil prices rose sharply and European natural gas prices experienced significant volatility, Henry Hub US natural gas prices remained relatively stable. Dr. Makholm explains that the Dutch Title Transfer Facility (TTF) natural gas price in Europe continues to follow the oil price, whereas the US shale revolution permanently drove US natural gas prices down, away from oil equivalents and toward the competitive entry cost associated with unconventional gas production.
Building on insights from The Political Economy of Pipelines and the history of natural gas regulation, Dr. Makholm contrasts the evolution of the US market with post-privatization regulatory models adopted elsewhere. He highlights the role of investment incentives, competitive entry, and transportation infrastructure in shaping market outcomes, while contrasting different approaches that have emerged in North America and other jurisdictions.
Dr. Makholm argues that understanding the relationship between regulation, capital formation, and infrastructure development remains critical as policymakers and industry participants navigate an increasingly interconnected global energy landscape. The article offers a historical perspective on how regulatory design can influence energy market resilience, investment, and long-term consumer outcomes and considers the implications of those dynamics for natural gas markets around the world.
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