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Australian gas industry

prepares for uncertain future

The pandemic has upended the global energy industry, leaving the
Australian gas sector to rely on the resilience of Asian demand

COMMENTARY AUSTRALIA’S natural gas sector is pinning its brought under control in 2021 using current
hopes on continuing demand from key Asian policy settings and the global economy returns
markets as the global outlook for fossil fuels to pre-crisis levels the same year. DRS adopts
WHAT: demand becomes increasingly bearish. the same policy assumptions as in STEPS, but
The IEA forecasts that Upstream industry body the Australian a prolonged pandemic causes lasting damage to
demand for fossil fuels, Petroleum Production and Exploration Asso- economic prospects, with the global economy
with exception of gas, ciation (APPEA) has highlighted resilient Asian returning to pre-crisis levels by 2023.
will wane in the coming gas demand as a key take-away from the Inter- SDS sees a surge in clean energy policies and
years. national Energy Agency’s (IEA) latest World investment, putting the world on track to achieve
Energy Outlook (WEO), which was released sustainable carbon emissions objectives in full.
WHY: this week. NZE2050 extends the SDS analysis, assuming
COVID-19 has decimated It was a bright spot in otherwise grim read- all previously announced net-zero emissions
demand and is believed ing for the fossil fuel industry, with the IEA pre- targets for the middle of the century will be met
to have sped up the dicting dwindling market share for both oil and in SDS.
transition to renewables. coal. The IEA predictions add momentum to Renewables, the big winner across all sce-
growing sentiment this year that the oil demand narios, are expected to meet as much as 80%
WHAT NEXT: peak is within sight, with upstream companies of global power demand growth over the next
Australia’s gas industry increasingly turning to clean energy alternatives decade. Solar PV, which has seen its competitive
needs to invest in new in search of long-term growth potential. edge vs coal or gas improve dramatically in most
technologies to offset its countries, is leading this charge.
carbon emissions. Four pillars IEA executive director Fatih Birol said: “I see
The IEA modelled four likely scenarios for solar becoming the new king of the world’s elec-
the global energy sector as the world econ- tricity markets. Based on today’s policy settings,
omy strives to recover from the coronavirus it is on track to set new records for deployment
(COVID-19) pandemic – the Stated Policies every year after 2022.”
Scenario (STEPS), Delayed Recovery Scenario At the same time, Birol projected that global
(DRS), Sustainable Development Scenario oil demand growth would “come to an end in the
(SDS) and the new Net Zero Emissions by 2050 next decade”. Coal is anticipated to see its share
case (NZE2050). in the 2040 energy mix shrink to less than 20%.
Under STEPS, COVID-19 is gradually Gas, however, is expected to fare much

P12 www. NEWSBASE .com Week 41 15•October•2020