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Page added on January 7, 2018

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What does peak oil demand mean for the future of gas?

Consumption

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.

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 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.

Read our coverage on how EVs will impact peak oil demand and what that means for companies and the power & renewables,upstreamsupply chainmetals  and refining industries.

Find out what Massimo and Tom Heggarty, Senior Analyst, Solar, for GTM Research have to say about future power supply options for island markets and why alternative sources, including LNG and Solar, are becoming increasingly viable alternatives to burning oil. Buy the report here.

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7 Comments on "What does peak oil demand mean for the future of gas?"

  1. Davy on Sun, 7th Jan 2018 6:43 am 

    Well, pretty obvious gas is killing coal and making drumpf legacy look ever more impotent. Most people that know better know that the pres has little really to do with energy. It’s all about the markets.

    “US Coal Production Crashes To Record Low”
    https://tinyurl.com/y9gmz2hj

    “Here’s another chart that it’s probably best not to show President Trump…Having promised to ‘make coal great again’ and tweeted exuberantly about the reopening of mines in June…President Trump’s coal nation is facing a tough end to the year as U.S. coal production sank to an all-time low in the final week of 2017 as the Christmas holiday and bitter-cold temperatures added to the long-term trends pummeling the industry. Miners extracted an estimated 10.5 million short tons of coal during the week ending Dec. 30, according to a report Thursday from the U.S. Energy Information Administration. That was down 28 percent from the same week in 2016 and the lowest tally in records dating to 1992. As Bloomberg notes, weekly coal production generally falls at the end of the year as rail and mining crews take time off, said Matt Preston, a North American coal analyst at Wood Mackenzie Ltd. But the drop-off was sharper than ever in 2017 as the industry continued to struggle to compete with natural gas and, to a lesser extent, wind and solar farms.”

  2. Davy on Sun, 7th Jan 2018 7:06 am 

    “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”

    Wow, that is a whopper as the board Nazi says. Countries succeed in achieving (NDC’S) (LMFAO) at that festive Paris lie of (COP21). I imagine gas will continue to grow and I agree but I don’t know enough about gas to say 1.6%. Yet, to forecast, predict, and project, or whatever they are doing, such a situation out to 2035 is reaching or more like “goal seeking” considering how uncertain the world is just a few years hence. This is they typical nature of science and academia today. We are one big habituated frog in a stew pot of predicaments.

    I do believe gas will be a bridging fuel especially for a renewable transformation that will allow a hybrid energy system for much of the rich world of 30%-40% renewable penetration to primary energy. If we are able to do more it will be because we keep our shit together and cooperate to introduce more storage and alternatives for transport. I doubt much of this will trickle down to the poorer parts of the world because once the world tries to advance past 30%-40% renewable penetration the real affordability issues will confront society.

    We have a society already beset with debt (bad debt), over capacity, and unfunded liabilities. A society beset with destabilizing climate and declining planetary ecosystem with localized failing ecosystems. A civilization with vital resources in depletion. A civilization in overshoot with population and the resulting consumption resulting in a very unstable carrying capacity. Let’s hope all this energy transformation gives a bridge to a little more time to live a comfortable life. I am saying this for the few billion that are comfortable. Many of the 7.5BIL are not. A 100% renewable world for 7.5BIL people is a wicked lie that is acted out by fake greens, scientist, academics, and politicians alike. It is wicked because all such lies undermine wisdom to make rational reality tested choices.

  3. eugene on Sun, 7th Jan 2018 9:27 am 

    My read is if this happens ie gas then our future is secure. If this happens ie renewables then our future is secure. In both cases we continue to live as we are. But, as Davy states, this is a screw the poverty ridden masses. But then empires have always been screw the masses we take, militarily, their resources, their lives and anything else we want. In fact, if we would just shut up and learn, we have masses in the US homeless, hungry, poverty ridden, etc. But in our “Christian ignorance”, those in poverty in this great, limitless country deserve to be poor as they are lazy, worthless beings who don’t deserve to live.

  4. Dredd on Sun, 7th Jan 2018 4:49 pm 

    It looks good for Pepto-Bismol.

  5. bobinget on Mon, 8th Jan 2018 9:30 am 

    https://www.reuters.com/article/us-usa-mexico-fuel-analysis/rail-gains-steam-in-race-to-supply-mexico-with-u-s-fuel-idUSKBN1EX0WT

    Can Mexico survive serious oil shortages?

    Mexico, US best NG Customer. can’t refine w/o it.

  6. MASTERMIND on Mon, 8th Jan 2018 9:51 am 

    Bob

    Mexico’s oil exports will be gone by 2020. Which will most likely lead to a state failure.. America is going to be flooded with millions of migrants!

  7. MASTERMIND on Mon, 8th Jan 2018 9:53 am 

    I am the collapse “Rain-man” of “Savant”

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