Citing the findings of BP’s Energy Outlook, Dale noted that natural gas is projected to grow strongly, supported by broad-based demand, abundant low-cost supplies, and the increasing availability of gas globally, coupled with burgeoning supplies of liquefied natural gas (LNG). Gas demand is projected to grow at an average rate of 1.7 per cent per annum, increasingly nearly 50 per cent by 2040, he said.
“The gas market is being revolutionised by the growth of LNG, particularly coming out from the combination of the Middle East — driven by Qatar — and the United States, among other parts of the world, such as Russia and West Africa — which is leading to a far more competitive, globally integrated market. As a result of this, the ability to compete in that market now is very tough — because you need to make sure your gas is low cost and competitive. The real winners from this are the gas consumers, because it means accessibility to competitively-priced gas is far greater,” he explained.
This resurgent demand growth is unlikely translate into more attractive returns for gas exporters, according to the executive.
“If anything, the price of gas, particularly within Asia, has come down relative to the past, because this market is so much more competitive,” he said.
Among all primary energy sources, the fastest growth will be witnessed in the renewables space, encompassing solar, wind and biofuels, according to Spencer.
“From 3-4 per cent today, renewables will grow quickly and will account for 50 per cent of the growth in primary energy over next 20 years. Its share will rise from 3-4 per cent today to around 15 per cent (of total energy supply) by 2040 — led by wind and solar.”
Renewables and natural gas together will account for a staggering 85 per cent of the growth in primary energy demand over next 20 years. In this scenario, the vast majority of the growth in primary energy over the next 20 years will be coming from clean or cleaner energy, he noted.
But despite the strong energy outlook, the global energy system, he warned, is faced with a ‘dual challenge’: the need for more energy, but with less carbon, which is associated with global warming and climate change.
“Climate change is real; Carbon emissions need to fall very sharply over the next 20 years if we have to avoid the impacts of climate change, and at the moment, carbon emissions are continuing to rise. We need to make significant progress over the next 20 years if we have any chance of achieving the Paris Climate goals,” he stressed.
What is less well understood is the global need for more energy and its important to the global economy, the official noted.
“The emergence of a middle class and its aspirations for growing prosperity in the developing world is driving that. Without that additional energy, growth in the developing world will be stunted, and will dampen growth in the global economy,” Dale added.
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