JPT What Lies Ahead for Hydrocarbons in the Global Energy Mix?

Stephen Whitfield, Senior

SPE.org 

Both EIA and BP project a growth in global energy demand, offset by a decline in energy intensity as consumer products increase in efficiency. BP projected global energy demand growing by around a third by 2040, marking a significantly slower rate of growth than in the previous 25 years. LNG will increase the global availability of gas, with supply more than doubling due in large part to exports from the US and Qatar—BP projected that those two countries will account for almost half of all global LNG exports by 2040. EIA said that, after LNG export facilities currently under construction are completed by 2022, US LNG export capacity will increase even further, and Asian demand growth will allow US natural gas to remain competitive there in the short term. After 2030, additional suppliers are projected to enter the global LNG market, including Mexico, and this may make additional US export capacity uneconomic. In the short term, liquids will still play a role in the energy mix, but projections on the extent of that role vary from source to source. In its World Energy Outlook 2018, the International Energy Agency (IEA) writes that oil markets are soon to enter a period of renewed uncertainty and volatility, including a possible supply gap in the early 2020s. IEA projects a rise in oil consumption in coming decades due to rising petrochemicals, trucking, and aviation demand, but meeting that growth in the near term will require a doubling of approvals of conventional oil projects from their current levels. Without such an increase, US shale production would have to add more than 10 million B/D between present day and 2025, which the IEA said was “a historically unprecedented feat.”