GAS OF AGES

The world is on the cusp of a golden age for nat­u­ral gas. Here are some fac­tors that could quicken – or in­hibit – the rise of “the fos­sil fuel of the fu­ture”

Alberta Oil - - REPORT ON NATURAL GAS - By Jesse Sny­der

“NAT­U­RAL GAS IS A FUEL OF THE FU­TURE,” wrote Daniel Yer­gin in his 2011 opus The Quest: En­ergy, Se­cu­rity and the Re­mak­ing of the Mod­ern World. At the time, the no­tion that nat­u­ral gas would even­tu­ally over­take coal – and even oil – as the most widely con­sumed fos­sil fuel in the world was not new. But it was just be­gin­ning to take on a new level of cer­tainty. That same year the International En­ergy Agency (IEA) raised the ques­tion in its an­nual World En­ergy Out­look, which it called, “Are We En­ter­ing A Golden Age of Gas?” It pre­dicted that by 2035 global nat­u­ral sup­plies would need to grow by 1.8 tril­lion cu­bic me­ters per day from their cur­rent level in or­der to meet de­mand – a fig­ure that is three times the cur­rent pro­duc­tion of Rus­sia.

To­day that fore­cast holds strong, de­spite the fact that many world lead­ers seem pre­pared to phase out fos­sil fu­els with a height­ened vigor fol­low­ing the COP21 meet­ings in Paris last De­cem­ber. In its most re­cent 2015 out­look, the IEA pre­dicted that un­der cur­rent poli­cies, nat­u­ral gas con­sump­tion would in­crease by 60 per cent be­tween now and 2040, com­pared to 30-per cent growth for oil. Un­der more strin­gent en­vi­ron­men­tal poli­cies that would keep global at­mo­spheric con­cen­tra­tions of C02 un­der 450 parts per mil­lion (ppm), nat­u­ral gas con­sump­tion is still ex­pected to grow by 15 per cent, com­pared to a re­duc­tion of 20 per cent for oil.

“What you can take from the IEA re­port is that the out­look for gas is stronger than other fos­sil fu­els,” says Jackie Forrest, the vice-pres­i­dent of en­ergy re­search at ARC Fi­nan­cial. “So, gas is a growth mar­ket, even un­der the sce­nario where we try to stay within that 450 ppm thresh­old.” Pre­dict­ing just how all of this will shape up is im­pos­si­ble, but un­der all sce­nar­ios nat­u­ral gas ap­pears set to emerge the win­ner among all of the fos­sil fu­els. To what de­gree nat­u­ral gas plays a role in our fu­ture de­pends on three dis­tinct yet tightly in­ter­twined fac­tors.

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