Alternate Energy The green options
There is a major shift in the oil and coal markets as these are alternative sources of energy that will replace nuclear power after the great disaster in Japan. Till 2010, Japan’s major reliance was on Malaysia for its supply of liquefied natural gas. However, post-earthquake, the surge in global demand for LNG has stirred the major oil and gas markets of Russia, India, US, Indonesia and Australia.
The month of April witnessed a 0.9 percent rise in trading of natural gas. With India seeking an increase of 36 percent of LNG imports from Nigeria and Russia trying to become the major exporter of oil to Japan, these markets are going for enhanced refining capacities in the coming years. The directions coming from Russia’s Premier to enhance hydrocarbon production have been triggered to cater to the lucrative Far East market.
Moreover, Indonesia’s coal mining is pacing up to meet the 340 million tonnes target for 2011. This estimate has arisen from the 310 million tonnes lifted in the preceding year, inviting higher prices on production. The importance of coal is linked with the reconstruction phase of Japan. The cheap costs of coal as compared to oil and gas are also being regarded as compensation over nuclear capacity loss. Similarly, the country’s coal-fired power plants are also functional to meet energy needs. Along with Indonesia, Australia leads the coal production market.
The US natural gas producers are also anticipating a productive era, as power plants there have set their priorities with gas as the first choice and coal as the second. According to an estimate, new project sanctions for LNG production and avenues of liquefaction developments can be seen coming up in the future. But there is an expected conflict in the current demand and supply requirements due to concerns of buyers seeking long-term deals with suppliers, resulting in lock-in storage.
As a general analysis, the tight demand and supply of gas will continue to highlight global economics, as Japan is in the OECD region which demands additional nuclear safety. This factor will cause an increased demand for alternative energy in the coming years.
Corporations including BG Group, Royal Dutch Shell and Reliance Industries, are being referred to as major beneficiaries in the current energy hype. On the other hand, energy active countries like China, South Korea and Taiwan will have to pay more for their power generators.
With the additional closure of Germany’s seven old nuclear plants, if Europe abandons its nuclear energy program, it will lead to Russia becoming the winner in alternative energy trade.
This boost is compelling for emerging oil and gas markets to make their impact on the economy. Moreover, the global surge in oil and gas demands has the potential to drive the second level production countries to the first level, as in the case of Australia seeking to be the next Qatar.
The gap-filling role of LNG is soon expected to turn the Pacific basin LNG market in its favour with the fuel becoming a potential replacement for nuclear energy in an already environmentafflicted world