Oil doom and gloom ignores bright gas future
The current market conditions of low oil prices, cost cutting and retracted exploration activity may be making the headlines, however a new report from the International Energy Agency (IEA) shows Australia and the Asia Pacific region have much to be positive about in the longer term.
Forecasts from the IEA released in November state natural gas will be an indispensable part of the world’s energy mix in coming decades, with production of natural gas rising by an estimated 47 per cent by 2040 from both conventional, unconventional and shale gas deposits.
The IEA said in its annual World Energy Outlook there are good reasons to be upbeat about the future of natural gas for its relative abundance, its environmental advantages compared with other fossil fuels, and its flexibility and adaptability make it a valuable component of a gradually decarbonising electricity and energy system.
Australian Petroleum Production and Exploration Association (APPEA) Chief Executive Malcolm Roberts said Australia has benefited hugely from rising demand for liquefied natural gas in the Asia-Pacific region.
“More than $200 billion has been invested in LNG projects, creating thousands of jobs, export income and new revenues for the Commonwealth and State governments. Australia will be the world’s leading exporter of LNG by 2018,” Mr Roberts said.
“The IEA forecasts that steady demand growth over the next 25 years will lead to another major wave of investment in gas production.”
“The competition for investment will be intense. If Australia wishes to seize a share of this investment, businesses must continue to lift industry productivity while governments should focus on removing unnecessary regulatory and other costs.”
With recent market analysis focussing on the plummeting oil price, gas remains the fastest-growing fossil fuel in the world.
Demand for natural gas will reach up to 5.2 trillion cubic metres over the next 20 to 25 years, bringing gas towards parity with coal and oil in the global energy mix.
According to the IEA Australia is to become the main player outside North America for unconventional gas resources, such as coal seam gas, as demand from China and the Middle East become the key regions for gas demand growth, with both countries set to become larger consumers of natural gas than the European Union.
Australia will see significant growth of natural gas production to 2020 as seven LNG facilities come online, but prospects for a second wave of projects have recently been dented by investment cutbacks.
“In the short term lower-than-expected natural gas prices are making it more challenging to make the case for new long-term investments in supply, however world natural gas production will not be derailed in the longer term,” the IEA report stated.
Source: By Marie Ryan – Oil & Gas AustralAsia