Page 11 - GLNG Week 41

GLNG COMMENTARY GLNG

Australia gas industry prepares

for uncertain future

The pandemic has upended the global energy industry, forcing the Australian gas

sector to bank on Asian demand to provide future growth opportunities

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

Upstream companies
are increasingly
turning to clean energy
alternatives.

Week 41 16•October•2020 www. NEWSBASE .com P11