Investment in gas to overtake oil in mid-2030s

Monday, 03 September 2018

The latest DNV GL Energy Transition Outlook, launched today at the World Gas Conference in Washington, DC, singles out the global energy transition as the primary driver for investment in natural gas and LNG projects this year. Investment in gas upstream, midstream and power plant projects will accelerate in the early-2020s as major oil companies decarbonize their business portfolios.

The pace with which industry players are moving, however, differs by region: 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.

Peak gas by mid 2030s

Natural gas is forecast to be the largest source of energy from around 2035 but demand will peak soon afterwards – well after the use of each of the other fossil fuels has gone into long-term decline.

“With reliable supply and affordable cost we expect solid growth of gas for the next 15 years. After peaking in the mid-2030s, gas use in the power sector is expected to decline from around 2040, by when wind and solar will dominate power supply,” said Sverre Alvik, programme director for DNV GL’s Energy Transition Outlook.

In Europe, gas demand has already peaked in 2010, and will do so by 2020 in North America; but in key regions such as South-East Asia and China it will only peak in the mid-2030s.

Citizens in Asia’s growing middle class are aware of how diseases and death are caused by serious air pollution. According to KOGAS research engineer Kidong Kim, this has “increased people’s resistance to coal thermal power plants and diesel-powered transport, including ships. We expect natural gas or LNG to replace these energy sources.”