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GAS TAKES transition, first substituting for coal, now as a transition fuel chain – from E&P through to end use –
Gas will play a pivotal role in the energy
will have dropped by 32 per cent. The
transition, taking its place as the world’s largest
industry will need to decarbonise even
energy source in the mid-2020s, according to
more intensely than this to help achieve
DNV GL’s latest Energy Transition Outlook report.
international emissions targets.
Gas has had its own journey in the energy
Hydrogen and CCS have the potential
to accelerate this trend even further
CENTRE STAGE and the perfect partner for renewables and then finally, once however, with only 13 per cent of natural
gas expected to be decarbonised in
decarbonised, supporting hydrogen as a destination fuel.
2050, and 12 per cent of world energy
Hari Vamadevan, Regional Manager, UK and West Africa,
emissions captured by CCS (most
from natural gas), it will take at least
DNV GL – Oil & Gas, foresees a new era for greener gases with
15 years before these solutions really
decarbonisation central to success
start to scale-up. From this point, three
he energy transition will, over the
1 The amount of natural gas used for
next 30 years, take many forms THE RACE TO REDUCE EMISSIONS IS LAGGING significant things will likely happen:
Where there is demand for oil and gas,
power generation starts to fall as
and accelerate at varying rates there will be a future for the sector renewables scale significantly and
around the world. We forecast however, without greater efforts to electricity is increasingly used to
T multiple energy transitions: decarbonise, the energy transition replace natural gas in sectors where it
from coal and oil to natural gas, and will not deliver on the COP 21 Paris is feasible to do so.
from fossil fuels to renewables and Agreement. Forecasting models 2 Natural gas will be partially
decarbonised gas. Natural gas, for envisage that the 1.5°C carbon budget decarbonised through gas reforming
example, will see its share of the primary will be exhausted in 2028 and the with CCS to produce blue hydrogen,
energy supply grow modestly from 26 2°C budget in 2051. This points to a with rapid growth anticipated
per cent in 2018 to 29 per cent in 2050, 2.3°C warming of the planet by 2100, towards 2050.
partly as it displaces the use of coal. compared with the pre-industrial level. 3 Green hydrogen, produced from
DNV GL’s fourth annual forecast To further compound the outlook, renewables, will join decarbonised
predicts that around half of demand for CO₂ emissions are expected to gas in replacing some of the demand
natural gas will come directly from its remain stubbornly high until the for natural gas, largely in hard-to-
end use – in buildings, manufacturing, mid-2030s, falling only 15 per cent abate sectors.
transport, and non-energy use, such as in the next 15 years, before dropping Hydrogen, produced from fossil
for petrochemicals (Figure 1). 40 per cent from 2035 to 2050. While fuels with CCS and from renewables
The other half will come from power unlikely to hit targets, efforts to scale via electrolysis, will supply nearly
generation, providing the energy the decarbonisation of natural gas, a quarter (23 per cent) of end-user
security and stability the world needs and enhance use of green gas using demand for gas (natural gas and
alongside variable renewables in the renewable sources, will at least be a hydrogen). The decarbonisation of gas
transition, and later from hydrogen catalyst for a lower carbon energy future. through CCS and the use of hydrogen
production. Solutions include electrifying oil and as a vector to reduce emissions from
The Energy Transition Outlook presents gas assets, reducing flaring and venting gas consumption will be led by Europe,
DNV GL’s forecast for demand, supply, of gas during production, increased Greater China, North America and
and investment in hydrocarbons, and efforts to detect and stem methane OECD Pacific.
decarbonised and green gases to 2050. leaks, and efficiency gains through In the latter half of the century, green
Demand is expected to peak in the digitalisation. However, oil and gas gases could complement increased
mid-2030s at 185 EJ, around 20 per cent production and distribution accounts use of renewable electricity, battery
higher than the 154 EJ in 2018. From for only a quarter of the industry’s technology and alternative low carbon
that point on it will decline by just over carbon emissions; the majority occurs fuels such as ammonia to provide
10 per cent to 165 EJ at mid-century. during the combustion of oil and gas. societies with a secure, affordable
Gas production will increase 12 per By mid-century, it is probable that supply of clean energy.
cent from 4,520 Gm³/yr in 2018 to 5,070 the industry will not be measured
Gm³/yr in 2035, before decreasing on carbon emissions but instead by COMPETITION THROUGH COLLABORATION
to 4,570 Gm³/yr – a level marginally lifecycle emissions per barrel of oil or Partnership and policy are essential
higher than in 2018. Production from gas consumed. This includes scope to shift the timeline on emissions
all field types will increase to 2035. three emissions, which include all reductions and provide the framework
Unconventional onshore gas will see the emissions from combustion or use of for the business models of the future.
greatest proportion of this, followed by oil and gas products. While there are Public energy policies are key, not
conventional onshore and then offshore, limited options to reduce emissions just in setting out the path for the
though all three sources of supply will from oil consumption, other than world and the oil and gas industry to
remain competitive (Figure 2). shifting to another energy source, decarbonise, but also providing the
Globally, imports in natural gas are natural gas consumption can be economic framework to enable industry
expected to more than double between decarbonised through deploying carbon and investors to make clear decisions
2018 and 2035, from around 745 Gm³/ capture and storage (CCS) technology. with a higher degree of certainty and
yr to 1,685 Gm³/yr, stabilising at this rate of return. Policies in Europe, China
level to 2050. This means a quarter will DECARBONISATION MUST GO FASTER AND FURTHER and North America are providing the
be traded between net import and net By 2050, projections show that total impetus for scaling hydrogen and
export regions by 2035. emissions across the oil and gas value other low carbon fuels, and propel

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