In a 2-degree world, only LNG supply needs about 145 billion cubic meters of additional LNG supply," said Katerina Filipenko, principal analyst at Wood Mac.
Europe (Natural Energy News): When the European Union bound its pandemic relaxation strategy to the objective of renewable energy generation and emission deductions, analysts sounded an alarm for LNG because the production of superchild fuel comprises a specific quantity of greenhouse gas emissions. Now, Wood Mackenzie instructs that the global energy evolution target could expose to danger more than two-thirds of the world's liquefied natural gas stocks, leaving trillions of cubic meters of gas in trapped resources.
This forecast is a significant departure from energy industry majors such as BP with estimates of very high gas demand, which is seeing this demand grow as gas is replaced by less polluting fossil fuels, especially in developing economies.
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LNG is a form of natural gas, which many believe is set to develop particularly strong demand due to its supply flexibility: while natural gas requires pipeline infrastructure, limiting alternatives, LNG Can be purchased from anywhere in the world and transported to port with a redevelopment. Terminal.
But if governments decide to double their climate change goals and start aiming for a more ambitious 2-degree scenario under the Paris Agreement, LNG growth will suffer.
The so-called 2-degree scenario refers to efforts made to prevent the rise in average global temperature to 2 ° C. A more realistic scenario is limiting this increase to 1.5 ° C. The 2-degree scenario was economically viable and cost-effective in 2015, according to the United Nations Framework Convention on Climate Change (COP21). Since then, suspicions have arisen, as this scenario would require the world's emission reductions to 70 percent by 2050.
It is still quite doubtful if the 2-degree scenario can even play with some caveats, so we are failing disappointingly even with the 1.5-degree scenario. And yet, tying up the epidemic recovery with some governments in Europe — specifically promoting renewable energy — may be a chance for a 2-degree scenario, even if it is a vine.
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"In a 2-degree world, only LNG supply needs about 145 billion cubic meters of additional LNG supply," said Katerina Filipenko, principal analyst at Wood Mac. "And if we analyze the adjoining FID for the Qatar North Field East development, the area for new projects shrinks 77% from our basis case to 104 BCMA."
A 77 percent drop in projected LNG demand is the reason for the considerable decline that will only add to the woes of an industry that has seen a supply boom, causing glare and a price depression that made some projects financially inseparable gave. If truly renewable energy ambitions take the upper hand in the coming few decades, the oil that moves away from the world may perhaps never materialize as the anticipated climax of the LNG industry.
According to the Wood Mac analysis, Qatar and Russia would be best positioned to respond to moderate demand growth, which, by the way, saw the beginning of a decline after 2035, analysts said. Low-cost US natural gas may make some Gulf Coast projects competitive. , Also, analysis note. This, however, will depend on the continuing boom, which is not as likely as it was a year ago. In addition, concerns about EU fracking emissions could compromise US LNG's competition on that market.
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"LNG developers will have to make a difficult decision," says Avgenia Megentseva, another Wood Mac analyst. “On the one hand, there will be openings for investment determinations. On the other hand, the long-term value of these investments may result from the risk of shrinking market prospects combined with competitive pressures from low-cost producers. "
It counts all the spirited scenarios developed by industry and governments so far, but it is worth noting that the world above is strongly predictive on the 2-degree path. This, as already mentioned, is far from a definite path, even with the recent upsurge in solar, wind, and importantly energy storage, mentioning the hype surrounding green hydrogen Not to, which has not yet been competitive with hydrogen produced from natural gas.
Detailed forecasts by analysts at Wood Mackenzie are no less than a doomsday for the natural gas industry. Fortunately for this industry, the prospect of facing that scenario is not particularly great, not for a lack of ambition, but because of a lack of necessary technological development that would allow the complete or near- Will enable complete replacement.
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The latest major battery storage news is a case in point: Tesla and Neony's new $ 300 million project in Australia, which costs $ 84 million, will have the capacity to power half a million homes in one hour. We need far more storage because before we can exclusively rely on solar and wind as our major sources of electricity, which should be in a 2-degree world.
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