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The World Energy Outlook 2017

Nicholas Newman Flame Amsterdam Conference Blog May 2017

Looking for the future

“The world is starting to see a slowdown in CO2 emissions” stated Tim Gould of the IEA. “ Part of it is due to governments introducing  energy reforms, and  in part because coal is no longer the lead growth fuel”.

A common feature of declining  CO2 emissions is the relative decline of coal consumption in China, the U.S. and Europe.

In China there has been a  slow decline in coal output in response to government policies. Also, since 1990, the Chinese economy has been in the transition  away from heavy industry towards a more light industry economy, which is much less directly reliant on coal.

In the U.S., due to the success of shale gas development, coal has lost its competitive advantage in the power sector with gas becoming the fuel of choice for base-load.

In most Asian markets coal remains cheaper than gas, especially for base-load though gas is usually competitive in meeting the needs for peak- power.

As for Europe, Gould concludes, “it is likely that demand for gas will begin to decline in the mid-2020s as renewables become increasingly cost effective.”  The main questions for prospective investors are: whether current conditions are favourable enough to support a twenty -year project and what will be the impact of new technologies on costs? Read More

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