COAL FALLS FROM FAVOR
MUCH OF THE EXPECTED DEMAND
for natural gas is a result of an ongoing attempt by world leaders to phase out coal consumption. In its 2015 outlook, under a scenario that assumes heavy environmental restriction, the IEA forecasts that coal’s share of the global electricity mix will fall to 30 per cent by 2040, down from its current portion of 41 per cent. Because is it seen as the “cleanest” of the fossil fuels, creating 30 per cent less emissions than oil, natural gas is seen as the least-harmful fuel to fill the void left by coal — especially as people seem to grow steadily more wary about nuclear power.
North American demand for natural gas is by no means the driver of global demand, but it will nonetheless see steady demand growth for natural gas as governments turn to cleaner sources of electricity. In a report that forecasts natural gas demand out to 2050, Solomon Associates says natural gas for power generation in North America will increase from 28 billion cubic feet per day (bcf/d) today to over 42 bcf/d in 2050, an increase of nearly 50 per cent (that’s an average of about 0.5-per cent growth per year). “When we examine gas demand over a long horizon, as our 2050 outlook does, the shear magnitude of growth becomes apparent,” says Bill Gwozd, Solomon’s senior vice-president of gas services.
The most significant North American coal-related policy to date is U.S. President Barack Obama’s Clean Power Plan, which threw coal producing states into a frenzy when it was first implemented in June 2014. In Canada, and more recently in Alberta, new regulations around coal power and air quality will reduce overall emissions from coal significantly. For its part, Alberta is pushing to phase out coal by 2030. By one estimate, which was cited by Alberta’s Climate Change Panel in its note to the environment minister, coalfired power generation capacity across Canada will fall to 2,500 MW in 2030, down from over 6,000 MW today.