What does peak oil demand mean for the future of gas?
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.
In our full peak oil demand series, we look more closely at the impacts on the upstream, supply chain, coal, metals, chemicals, refining, power and renewables industries and how companies will adapt. You can also read more about the impact electric vehicles will have on oil demand.
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.