More than anything, the scale of the future hydrogen society will be determined by success in managing infrastructure, safety, and perceptions. The proportion of oil and gas companies expecting to invest in hydrogen has more than doubled in the past 12 months according to New Directions, Complex Choices, DNV GL’s outlook for the oil and gas industry in 2020.
Developing technology for carbon capture, storage and use (CCSU) at scale is critical for the future of gas in Europe, but little progress has been shown to date.
Industry leaders attending the European Annual Gas Conference (EAGC) in Paris on Wednesday (6th November) broadly agreed that the next five years will be crucial for the deployment of CCSU.
LONDON (ICIS)--Traded volumes at Europe’s most liquid gas hub the Dutch TTF could climb even further in 2020 as prospective market participants target the hub for gas indexation for LNG contracts.
With Atlantic-based LNG supply expected to soar further in 2020 the amount of European LNG offtake will continue to grow.
Global LNG supply will average just over 32 million tonnes (mt) per month in 2020, a 7% increase year on year, according to the LNG Edge supply forecast.
On Europe's road towards carbon-neutrality, natural gas will play an important role as a relatively low(er)-carbon fossil option. However, to solidify this position some hurdles need to be overcome, most notably methane emissions. This became clear during the European Annual Gas Conference in Paris.
The chart shows the European Commission’s long term scenarios on the consumption of gaseous fuels. Each scenario for 2050 shows much lower use of natural gas than the three baseline scenarios a the right.
For years, Europe’s top natural gas conferences focused on the boom in deliveries of the cleanest fossil fuel. Now, the gathering is starting to consider the risks piling up from the green movement.
Methane is the second most abundant greenhouse gas (GHG) after carbon dioxide (CO2). Compared to CO2, the greenhouse gas effect of methane is significantly stronger in the short term. However, methane has a shorter atmospheric lifespan (8-12 years on average) while CO2 persists in the atmosphere for centuries.
After two decades, the EU now has a liberalised gas market. Trading determines wholesale prices based on supply and demand and gas-to-gas competition. Prices are converging across Europe and have fallen to ten-year lows, as LNG competes with pipeline gas in Europe’s large and liquid market. Storage levels are at record highs as the market has absorbed higher volumes. All this shows that the market is working exactly as one would expect. Policymakers, regulators and the industry can all congratulate themselves.
The current LNG glut has seen regasification rates rising to record highs this year as Europe plays a key role in balancing the global market. Europe is able to benefit from such oversupplied global market conditions due to a healthy level of available LNG import capacity, deep market liquidity and the significant price elasticity of demand; gas generation loads can be increased through coal-to-gas switching when gas prices drop lower.
The LNG business is in a period of fundamental change as it moves from its traditional rigid structure to become a fully traded commodity. This period of change is happening during a time of considerable volume growth in the industry with LNG supply doubling by 2020, from 2016 levels; with growth expected to continue until at least 2030. This change is not without pain, like a child growing from the restrictions and rules set by its parents, but one thing is clear, the LNG business will grow in size and become commoditised - the question is by when?
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