Xodus Group has launched new analysis that shows “a rapid pivot to gas will be required to deal with rising global energy demand”.
But it said this forecast would require “significant advancements in technology to produce the gas responsibly, including carbon capture and storage (CCS) of the carbon dioxide produced”. The phasing out of coal and oil in response to vehicle electrification and environmental pressures and a rapid and robust increase in renewable production would also be a necessity.
The report from the international energy consultancy, called Rapid Pivot to Gas, said worldwide energy consumption will continue to increase, driven by economic growth in developing countries, and that approximately half of that demand will need to be fulfilled by LNG.
This is in contrast to some recent future energy scenarios, but the report said that under this model, approximately US$20 trillion would need to be spent on natural gas exploration and production over the next 20 years.
Elsewhere, Xodus also predicted that crude oil and coal will decline to 1.5 billion toe/yr and 1.2 billion toe/yr respectively by 2040. Unconventional oil and other liquids are projected to increase over the entire period as is nuclear energy, assuming no major changes in policies.
Andrew Sewell, Director of Subsurface at Xodus Group, said: “Recent forecasts take a developed world view showing either a plateauing or fall in energy consumption, but growing populations in developing countries mixed with increasing wealth are much more likely to result in a surge of overall primary energy consumption.”
Sewell added: “We are anticipating an unprecedented decline in oil and coal, but even with energy from renewables modelled to the most aggressive increase, our analysis shows that a much more rapid pivot to gas is required to meet increased demand. Securing that gas sustainably by quickly enabling CCS and other decarbonisation technologies must move further up the agenda of governments and industries around the world.”
The report said that in the last 25 years, per capita energy consumption of developing countries out of the Organisation for Economic Co-operation and Development (OECD) has grown at just over 2.0 per cent annually.
In the OECD, average per capita consumption has fallen by about 0.2 per cent annually in the same period – these growth rates were used to project future energy demand by region.
Based on these numbers, the overall primary energy consumption will surge from 14.3 billion toe/yr to 21.5 billion toe/yr in 2040, “presenting a challenging supply and demand scenario”.
In addition to sustained installation capacity, the uptime and efficiency of new capacity is projected to keep improving for the next 20 years.
Sewell added: “Assuming that natural gas supplies the difference in total demand, we estimate that consumption could grow up to 200 per cent by 2040 accounting for half of all primary energy consumption and 73 per cent of the fossil fuel component. Energy industries need to consider this potential gas demand spike in the landscape of the necessary decarbonisation of our global energy supply along with the huge exploration and production expenditure it would require.”
For more information visit www.xodusgroup.com