"The Future of Gas" report takes a critical look at the role of gas, drawing out what lies on the horizon for this key source of heat and energy, as governments, energy companies and consumers focus on the "Energy Trilemma" of affordable, sustainable and secure supplies.
In the face of cheap but polluting coal and burgeoning but intermittent renewables, the future of gas in the UK and beyond has never been so fundamental. The report surmises that the opportunities are plentiful, stemming from new demand and climate change objectives, and driven by exploration successes as well as a changing attitude among investors.
"The future of gas is written in the present. Choices taken now, by investors and governments, will dictate supply and demand over the next 10 years."
Guy Winter | Partner | Corporate
Key themes that have emerged out of the analysis of the market and conversations with industry leaders, include:
- Britain has the potential to provide genuine global leadership as a sustainable gas network innovator, but that will require more effective leadership from HM Government – particularly in Carbon Capture & Storage (CCS).
- Security of supply is a question governments are concerned with, while companies are more focused with a working market. Gas is central to the idea of energy security, but the market, particularly the supply side, is dominated by private investment. Given these potentially differing goals, how we make sure the lights stay on will be challenging.
- Substantial existing gas resources exist around the world and demand is growing. Project costs, price volatility and access to market are some of the obstacles standing in the way of gas' future.
- Given growing concerns about carbon emissions, how gas finds a place in the world's energy mix is crucial - the answer lies in its role between cheap coal and intermittent renewables.
- LNG demand and prices have had a boom-and-bust few years, destroying much new appetite for additional projects. This may lead to a price war in Europe between US LNG and Russian pipe gas.
- The impact of Brexit – there are significant risks to the UK/Belgium interconnector and the wider gas trading relationship between Britain and Europe as a result of Brexit.
- The Power of Zohr – Eni's 850 bcm off shore gas field find is a game changer for the East Mediterranean, making the big players re-think the region's gas potential.
Get a taste of the report in this video with highlights from the launch event. Watch the full video below.
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