In its final editorial of peak oil demand series, Wood Mackenzie looks at the consequences of peak oil demand on gas, noting that it sees a growth to 2035.
As explained, many oil majors are talking about reshaping their supply portfolio towards gas, in response to concerns about peak oil demand.
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, according to Massimo Di Odoardo, Vice President, Gas Research.
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.
However, as renewable costs continue to go down, long term gas demand growth is also at risk, the consultant suggests. 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.