At the Abu Dhabi International Petroleum Exhibition and Conference last week, Energy Ministers from the UAE, Bahrain, and Oman discussed the key to sustainability in the oil and gas industry in light of future energy scenarios.
One thing was clear: there is a consensus among the Ministers that the future energy landscape will include a healthy demand for natural gas.
The ministerial session moderator, BBC’s John Simpson, queried the panel on the way in which they see the oil industry transitioning towards natural gas and how the two commodities will be balanced in the future. Their Excellencies’ responses revealed a conviction that natural gas will be crucial in the coming decades for meeting growing energy demands and stricter controls on emissions, especially vis-à-vis oil.
Natural Gas and Oil: Oman’s Minister of Oil and Gas Mohammed Hamad Al Rumhy effectively captured LNG’s growth, commenting “if you think about Asia, we used to have only four LNG users, now almost all the countries in Asia along the coast from Kuwait to Japan have constructed LNG terminals to receive [the fuel].”
Bahrain’s Minister of Oil Shaikh Mohammed bin Khalifa Al-Khalifa seconded these sentiments, adding that a global oversupply of LNG in the coming years will in fact help define its future by unveiling new markets where demand is budding and blooming. Besides, Minister Al-Khalifa also offered that it is now clear that gas is likely more abundant geologically than oil.
In a lower emissions world gas is, without a doubt, the cleanest hydrocarbon available and, as UAE Energy Minister Al Mazrouei expressed to the panel, it will be needed to replace coal and oil in power generation. Interestingly, the panelists’ comments revealed a greater focus on balancing gas with renewable energy sources over oil.
Natural Gas and Renewables: With prices that now rival domestic gas prices in the Gulf countries, Minister Al-Khalifa commented that renewable energy sources could present competition for natural gas. Minister Al Mazrouei offered sage advice to industry leaders: “Renewable forms of energy should […] encourage us to work harder. We can and should compete together.”
The balance between oil and gas about which Mr. Simpson asked should be adjusted to balance competition from renewables, the panel concluded. To do so, they discussed how gas needs to remain competitive. This requires continued advances in efficiency for extraction, transportation, and power generation.
Fortunately, the gas industry is in an upswing when it comes to these areas as technology improvements and strong business strategies have demonstrated resilience in a global market that has seen its fair share of downturns in recent times.
Do you share the belief that natural gas is well positioned to compete with renewables in the future global energy mix? What can be done to ensure natural gas is not as susceptible to price fluctuations as oil has been? Leave your comment below.
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