A current report released by the IEA (International Energy Agency) qualified "Are we entering a golden age of gas?" stimulated a series of discussions across the globe concerning the future of gas. Lots of power market specialists stepped forward to share their opinions and ideas concerning the record which led me to create this article.
The IEA record states that the discovery of new storage tanks in South America, Middle East and also Central Asia, the supply from non-traditional sources such as shale gas as well as the unforeseen increase popular are the major variables that will make natural gas get in a golden era.
According to the IEA international intake will certainly increase by greater than 50% over the following 25 years making up a quarter of the world's energy supply by 2035. On the back of low CO2 exhausts when it is shed the report likewise recommends it could be a quick fix for global warming.
That is when point of views start to vary. Despite having the most affordable CO2 emissions in between all fossil fuels, natural gas still produces CO2 when it is burned as well as a strong reliance on gas can see temperature levels increase by 3.5 ºC in the next 50 years causing tragic effects. This issue could be easily fixed by the setup of carbon capture and also storage devices on these nuclear power plant which in turn would boost power costs making gas not such a viable option after all.
Yet it is too early in conclusion that as even more researches are needed around to examine the operational costs of carbon capture and also storage equipment.
IEA's biggest bet to produce this so called natural gas golden era is surely on shale gas. No matter to what many individuals assume shale gas is natural gas not a recently found kind of gas, it was first found and removed in 1821 yet the production was outweighed by bigger natural gas reserves and also cheaper removal.
Since global reserves are decreasing shale gas is becoming a practical alternative especially in America where manufacturing tripled over the past five years. It is estimated that natural gas will certainly be responsible for 40% of all the energy created in the United States thanks to an abundant supply of shale gas.
One more point in favour of gas is the statement made by Germany that will terminate every one of its nuclear power plants by 2022. The Germans intend to integrate renewable resource resources as well as natural gas to compensate for nuclear. The strategies are to develop 6 new natural gas power plants that will produce a total of 5 GW. This will certainly enhance international demand.
All appears really optimistic according the IEA's record however there are various other factors that require to be checked out prior to we can say gas has actually entered its golden age.
As an example according to the Financial Times Commodities Experts Javier Blas:
" The natural gas market is going into a golden age on the back of increasing international need. So declares the International Energy Agency, the western countries' guard dog. Yet the natural gas rates system stays, in the meantime, greatly in the dark ages."
I believe what Javier is trying to say is that global wholesale gas rates need to be independent from oil prices and also take on gas-to-gas pricing comparable to the ones used in the UK for example.