In our final editorial in our peak oil demand series, we look at the consequences of peak oil demand on gas.
Many oil majors are talking about reshaping their supply portfolio towards gas in response to concerns about peak oil demand. Massimo Di Odoardo, Vice President, Gas Research talks us through the potential for gas demand growth and what’s at stake for oil majors.
In North America, low gas prices are enabling displacement of coal in the power sector. In Europe, government and utilities are announcing plans to retire coal fired plants. In China, plans are in place to more than double the share of gas in the energy mix. And with the price of liquefied natural gas (LNG) increasingly cheaper than that of oil, emerging markets are looking at LNG as a way to switch to gas.
We are positive about global gas demand growth to 2035. As countries succeed in achieving the nationally determined contributions (NDCs) they pledged at Paris COP21, global gas demand will grow at an average rate of 1.6% through to 2035. But as renewable costs continue to go down, long term gas demand growth is also at risk. Gas might well be a bridging fuel towards a more sustainable energy future, but it’s no wonder oil majors are also looking to invest in wind and solar as a way to mitigate the risk of peak oil demand.
Source: Wood MackenziePrevious Next