Baku, Azerbaijan, Jan.8
By Leman Zeynalova – Trend:
Gas could be a bridging fuel in a peak oil demand scenario, according to the forecasts of Wood Mackenzie.
Many oil majors are talking about reshaping their supply portfolio towards gas in response to concerns about peak oil demand, said the analysis.
“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,” said Wood Mackenzie.
The group analysts are positive about global gas demand growth to 2035.
“As countries succeed in achieving the nationally determined contributions (NDCs) they pledged at Paris climate conference (COP21), global gas demand will grow at an average rate of 1.6 percent 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,” said the analysis.
While transport demand will flat-line around 2030, Wood Mackenzie forecasts continued growth in overall global oil demand, supported by the petrochemical sector.
“Nonetheless, the prospect of peak oil demand is very real. The industry needs to start planning now if it is to be prepared for what lies ahead,” said the group.
Wood Mackenzie expects demand for oil in developed countries to revert to structural decline by 2020, wiping out about four million barrels per day by 2035.
In contrast, developing economies will increase their demand for oil by nearly 16 million barrels per day by 2035, according to the group’s forecasts.
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