Nearly two-thirds (64%) of oil and gas sector leaders expect to increase or sustain spending on gas projects in 2018, as the sector prepares for gas to overtake oil as the world’s primary energy source in the mid 2030s.
Confidence in the case for gas is growing, according to a survey by DNV GL, the technical advisor to the industry. The vast majority (86%) of the 813 senior industry professionals surveyed agree that gas – the least carbon-intensive fossil fuel – will play an increasingly important role in the global energy mix over the next decade, up from 77% last year.
The findings appear in Transition in Motion, a special report from DNV GL’s research on the outlook for the oil and gas industry in 2018. It reveals the primary driver for investment in natural gas and LNG projects this year is the global energy transition.
The pace of the oil and gas industry’s intentions to lower carbon emissions differs by region, however. Just a third of survey respondents in North America (33%) say that their company is actively preparing for the shift to a lower carbon energy mix this year, compared to more than half (51%) in Middle East and North Africa.
The stage is set for gas to become the largest single source of energy. Demand for it will peak in the mid 2030s, well after the use of each of the other fossil fuels has gone into long-term decline, according to DNV GL’s 2017 Energy Transition Outlook, an independent forecast of the global energy mix in the lead-up to the mid-century. The model predicts the industry’s intentions for increasing gas investments will accelerate in the early 2020s as major oil companies decarbonise their business portfolios.
“Society’s transition to a less carbon-intensive energy mix is already a reality, and oil and gas will continue to be crucial components. Our research affirms that the industry is already taking positive steps to secure the important role we forecast gas to play in helping to meet future, lower-carbon energy requirements,” said Liv Hovem, CEO, DNV GL - Oil & Gas.
“Significant investment will be needed in the gas industry over the coming decades to increase capacity, transform assets to source and transport a decarbonised mix of energies, and to safely build and maintain the infrastructure needed to connect emerging supply regions with evolving demand centres,” Hovem added.
Power generation is predicted to be the primary consumer of gas in most regions, though manufacturing could demand similar volumes in emerging markets. DNV GL’s 2017 Energy Transition Outlook suggests that North East Eurasia and the Middle East and North Africa will increase gas output towards 2040 at least, overtaking North America as the world’s largest gas producer. Production is also forecast to double in China, the Indian Subcontinent and South East Asia.
Other key findings from DNV GL’s Industry Outlook research:
- Nearly a quarter (24%) believe that onshore pipeline projects currently in development are adaptable enough to cope with potential long-term changes in the gas mix, such as greater variety of calorific values, hydrogen and biogas. 13% disagree.
- 72% believe that, as traditional coal energy generation becomes obsolete over the coming decades, the long-term attractiveness of gas will significantly improve.
- The number of respondents stating that traditional oil and gas prices will decouple in the long-term has increased from 45% in 2017 to 55% this year.
Download a complimentary copy of Transition in Motion here.
The 2018 edition of DNV GL’s Energy Transition Outlook will be published in a suite of reports on 30 August. It will feature adjustments and refinements to the company’s forecast of the global energy mix, based on new data. It will also include new topics such as energy infrastructure, the role of hydrogen, and the impact of digitalisation on the energy transition.
Read the article online at: https://www.worldpipelines.com/business-news/26062018/industry-investment-gears-to-gas/