Natural gas is giving oil a run for its money

A Norwegian risk management firm said more than three quarters of the professionals it surveyed said natural gas moves the world toward a low-carbon future.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  June 26, 2018 at 8:50 AM
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June 26 (UPI) -- Natural gas is on pace to eat away at the edge for oil as a primary energy source and most sector leaders expect to spend money there, an industry poll found.

DNV GL, a Norwegian company providing risk management advice, said a survey of 813 senior oil and gas professionals revealed 64 percent of the sector leaders expected to either increase or sustain spending on natural gas projects this year. More than three quarters of those surveyed said it will be natural gas that leads the global economy to a low-carbon future.

"Society's transition to a less carbon-intensive energy mix is already a reality, and oil and gas will continue to be crucial components," Liv Hovem, the CEO at the Norwegian company, said in a statement. "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."

The shift is represented by global perceptions of coal. Survey results showed that 72 percent of those responding to the Norwegian company said coal may become obsolete in the decades ahead. By region, it's the Middle East and North Africa that is shifting most as only 33 percent of survey respondents in North America said they were moving toward a low-carbon energy mix.

In a separate report, the International Energy Agency said global demand for natural gas is on pace to grow by about 1.6 percent annually. China, one of the world's leading economies, accounts for 60 percent of the growth to 2023 as it shifts away from coal.

By use, the IEA found it's the industrial sector, not the power sector, that contributes most to the global demand for gas over the next five years. The industrial sector accounts for more than 40 percent of demand growth, compared to 26 percent for power generation.

For suppliers, it's the United States that leads gas production growth over the next five years because of shale. Most of that new production will target foreign markets as the country pushes more liquefied natural gas out of its ports.

"Thanks to the energy awakening of the last ten years, America has solidified its role at the center of the global energy system and has become an emerging energy exporting superpower -- especially in the natural gas sector," U.S. Deputy Secretary of State John Sullivan said from the World Gas Conference in Washington D.C.

The IEA said the share of LNG in global gas trade rises from about 30 percent last year to 40 percent in 2023, with emerging markets in Asia taking on most of the new supply. Its report found, however, that the future is uncertain for LNG beyond 2023 because of a potential lack of investments in new projects.

"China is set to become the world's largest gas importer within two-to-three years, U.S. production and exports will rise dramatically strongly and industry is replacing power generation as the leading growth sector," IEA Executive Director Fatih Birol said in a statement. "While gas has a bright future, the industry faces tough challenges."

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