Inside Out
Inside Out
Continued from page 18
petrochemicals and other energy-intensive industries , while also rejigging international trade flows and challenging incumbent suppliers and business models . By the mid- 2020s , the US will become the world ’ s largest LNG exporter and a few years later a net exporter of oil , continuing to import heavier crudes that suit the configuration of its refineries , but a larger exporter of light crude and refined products .
OIL STILL HAS LEGS The era of oil is not yet over – with the US accounting for 80 % of the increase in global oil supply to 2025 this will maintain a nearterm downward pressure on prices . Up until the mid-2020s demand growth will remain robust but will thereafter slow sharply as greater efficiency and fuel switching reduce oil use for passenger vehicles – even though the global car fleet will double from today , to reach two billion by 2040 . Powerful impetus from other sectors will support oil demand on a rising trajectory to 105 million barrels per day by 2040 vs 97.7 million today ). Oil as a petrochemical feedstock will be the largest source of growth , closely followed by rising consumption for trucks ( fuel-efficiency policies cover 80 % of global car sales today , but only 50 % of global truck sales ), for aviation and for shipping .
THE GROWTH OF GLOBAL GAS MARKETS Natural gas growth will account for 25 % of global energy demand by 2040 , becoming the second-largest fuel in the global mix after oil . Led by China , India and other countries in Asia , 80 % of the projected growth in gas demand will occur in these developing economies , where much of the gas needs to be imported and infrastructure is often not yet in place . This reflects gas being a good fit for policy priorities in this region with US LNG helping to accelerate a shift towards a more flexible , liquid , global market . Ensuring that gas remains affordable and secure , beyond the current period of ample supply and lower prices , will be critical for its long-term prospects . LNG will account for almost 90 % of the projected growth in long-distance gas trade to 2040 .
GHG EMISSIONS Although recently plateauing , global energyrelated CO 2 emissions will rise slightly to 2040 , an outcome which is far from enough to avoid
the severe impacts of climate change . There are however a few positive signs – projected 2040 emissions are lower than in the previous Outlook ( 35.7 gigatonnes vs 36.3 Gt ). By 2030 in China , CO 2 emissions are projected to plateau at 9.2 Gt , only slightly above current levels before starting to fall back .
A sustainable development scenario With its implications around projected GHG emissions , the latest Outlook presents clear and significant challenges for policy making and formulation of effective counter measures . To help address these challenges , the IEA has formulated A Sustainable Development Scenario .
This starts from a set of desired outcomes and considers what would be necessary for their delivery . Central to these outcomes is the achievement of an early peak in CO 2 emissions and a subsequent rapid decline , consistent with the Paris Agreement . As such it offers a roadmap to achieve a range of energy-related goals essential for sustainable economic development , climate stabilisation , cleaner air and universal access to modern energy , while reducing energy security risks . An invaluable reference point going forward !
Doug Watts 07770 837 829 doug @ lakeland2k . co . uk
Brian Edwards 07831 617 616 brianedwards @ rtnltd . co . uk Richard Bulmer 07584 239 297 richardbulmer @ rtnltd . co . uk Adrian Mason 07703 715701 adrianmason @ rtnltd . co . uk
20 Fuel Oil News | January 2018