Released September 22, 2020 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Natural gas and liquefied natural gas (LNG) have a far brighter future than oil or coal over the next three decades under three scenarios developed by BP plc (NYSE:BP) (London, England) and released September 14 in the company's Energy Outlook: 2020 edition.
The energy outlook and BP executives who addressed a global virtual conference took pains to point out that the report was not a prediction of what would happen. Rather, the three scenarios suggested how global energy markets could unfold over the next 30 years.
The three scenarios -- Business as Usual, Rapid Transition and Net Zero Carbon -- are summarized in the September 16, 2020, article - BP: Renewables, Electric Vehicles to See Sharp Global Growth in Coming Decades. To see BP's view of how the COVID-19 pandemic could alter the global economy and the demand for oil, see September 15, 2020, article - BP Assesses How COVID-19 Could Cut Global GDP, Oil Demand. The company's scenarios for global oil demand and supply are contained in the September 18, 2020, article - BP Report Considers How Global Oil Demand Could Change Over Next Three Decades.
In releasing the annual report, BP Group Chief Economist Spencer Dale told a worldwide virtual briefing on September 14, "The outlook for natural gas is more resilient than for oil (and coal) in all three scenarios." In the Rapid Transition scenario, global oil demand fell by around 50% by 2050. But in that same scenario, gas consumption continued to grow for the next 15 or so years before declining to only slightly less than what it was in 2019.
There are two main reasons for gas' more resilient future, Dale continued: the displacement of coal in fast-growing economies, particularly in Asia over the next 15 years, and the increased use of gas in conjunction with carbon capture and sequestration (CCS) in a decarbonizing world.
Global gas use fares even better under BP's Business as Usual scenario, but worse in the Net Zero Carbon case.
Click on the image at right to see future global gas consumption to 2050 in three scenarios developed by BP.
As the future demand for electricity and energy grows in developing economies, and they seek lower-carbon solutions, the demand may outstrip what can be provided by renewable generation, at least in the short- to medium-term, Dale continued. If that comes to pass, gas could be the lower-carbon bridge fuel that can help those countries meet an expected strong increase in demand while not worsening global climate change.
BP's scenarios envision vastly different demand patterns for natural gas over the next three decades. The Business as Usual case sees strong demand increases from the Power and Industrial Manufacturing sector. But in the Rapid Transition and Net Zero Carbon cases, there is strong demand for gas to create "blue hydrogen."
Click on the image at right to see three cases of how global gas demand could shift over the next 30 years.
However gas will be used, the LNG sector is expected to expand dramatically, at least over the next 15 years. In the Business as Usual case, the LNG export model by 2035 is more than double the 2018 global export volume. Further expansion is seen over the15 years after that.
In the Rapid Transition scenario, near-term demand growth is even more robust, rising from 452 billion cubic meters (Bcm), or about 15 trillion cubic feet (Tcf), in 2018 to 1,067 Bcm, or roughly 38 Tcf, in 2035 before falling back to about 967 Bcm, or about 34 Tcf, in 2050.
Click on the image at right to see how the LNG export market could expand over the next 30 years under three scenarios developed by BP.
"LNG expands significantly in both the Rapid Transition and Business as Usual (scenarios), leading to a more competitive, globally integrated gas market," BP said it its Energy Outlook. "LNG trade in Rapid Transition (case) bounces back strongly from the near-term fall associated with COVID-19. ... This fast growth is driven by increasing gas demand in developing Asia (China, India and Other Asia) as gas is used to aid the switch away from coal and LNG imports are the main source of incremental supply."
The BP report continued: "This surge in LNG demand is met by increasing supplies from the U.S., Africa and the Middle East, which emerge as the three main hubs for LNG exports. Global LNG imports fall back in the second half of the Rapid Transition (scenario) as import demand in developing Asia starts to decline. These falls are most pronounced in China, as overall demand declines and domestic production (including biomethane) increases." Declining demand overseas during the post-2035 period will be faster than depreciation of liquefaction capacity, which means some means some facilities will have to operate at less than full capacity or shut down prematurely.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The energy outlook and BP executives who addressed a global virtual conference took pains to point out that the report was not a prediction of what would happen. Rather, the three scenarios suggested how global energy markets could unfold over the next 30 years.
The three scenarios -- Business as Usual, Rapid Transition and Net Zero Carbon -- are summarized in the September 16, 2020, article - BP: Renewables, Electric Vehicles to See Sharp Global Growth in Coming Decades. To see BP's view of how the COVID-19 pandemic could alter the global economy and the demand for oil, see September 15, 2020, article - BP Assesses How COVID-19 Could Cut Global GDP, Oil Demand. The company's scenarios for global oil demand and supply are contained in the September 18, 2020, article - BP Report Considers How Global Oil Demand Could Change Over Next Three Decades.
In releasing the annual report, BP Group Chief Economist Spencer Dale told a worldwide virtual briefing on September 14, "The outlook for natural gas is more resilient than for oil (and coal) in all three scenarios." In the Rapid Transition scenario, global oil demand fell by around 50% by 2050. But in that same scenario, gas consumption continued to grow for the next 15 or so years before declining to only slightly less than what it was in 2019.
There are two main reasons for gas' more resilient future, Dale continued: the displacement of coal in fast-growing economies, particularly in Asia over the next 15 years, and the increased use of gas in conjunction with carbon capture and sequestration (CCS) in a decarbonizing world.
Global gas use fares even better under BP's Business as Usual scenario, but worse in the Net Zero Carbon case.
Click on the image at right to see future global gas consumption to 2050 in three scenarios developed by BP.As the future demand for electricity and energy grows in developing economies, and they seek lower-carbon solutions, the demand may outstrip what can be provided by renewable generation, at least in the short- to medium-term, Dale continued. If that comes to pass, gas could be the lower-carbon bridge fuel that can help those countries meet an expected strong increase in demand while not worsening global climate change.
BP's scenarios envision vastly different demand patterns for natural gas over the next three decades. The Business as Usual case sees strong demand increases from the Power and Industrial Manufacturing sector. But in the Rapid Transition and Net Zero Carbon cases, there is strong demand for gas to create "blue hydrogen."
Click on the image at right to see three cases of how global gas demand could shift over the next 30 years.However gas will be used, the LNG sector is expected to expand dramatically, at least over the next 15 years. In the Business as Usual case, the LNG export model by 2035 is more than double the 2018 global export volume. Further expansion is seen over the15 years after that.
In the Rapid Transition scenario, near-term demand growth is even more robust, rising from 452 billion cubic meters (Bcm), or about 15 trillion cubic feet (Tcf), in 2018 to 1,067 Bcm, or roughly 38 Tcf, in 2035 before falling back to about 967 Bcm, or about 34 Tcf, in 2050.
Click on the image at right to see how the LNG export market could expand over the next 30 years under three scenarios developed by BP."LNG expands significantly in both the Rapid Transition and Business as Usual (scenarios), leading to a more competitive, globally integrated gas market," BP said it its Energy Outlook. "LNG trade in Rapid Transition (case) bounces back strongly from the near-term fall associated with COVID-19. ... This fast growth is driven by increasing gas demand in developing Asia (China, India and Other Asia) as gas is used to aid the switch away from coal and LNG imports are the main source of incremental supply."
The BP report continued: "This surge in LNG demand is met by increasing supplies from the U.S., Africa and the Middle East, which emerge as the three main hubs for LNG exports. Global LNG imports fall back in the second half of the Rapid Transition (scenario) as import demand in developing Asia starts to decline. These falls are most pronounced in China, as overall demand declines and domestic production (including biomethane) increases." Declining demand overseas during the post-2035 period will be faster than depreciation of liquefaction capacity, which means some means some facilities will have to operate at less than full capacity or shut down prematurely.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
