World Bank’s Energy Week Washington DC, 6 March 2006 Natural gas:”bridging fuel “ for the next decades A global perspective Marcel Kramer, Chairman and CEO Gasunie, The Netherlands
Dec 10, 2015
World Bank’s Energy WeekWashington DC, 6 March 2006
Natural gas:”bridging fuel “ for the next decadesA global perspective
Marcel Kramer, Chairman and CEO Gasunie, The Netherlands
Total Energy Demand by Region 2002 and 2030
0
500
1000
1500
2000
2500
3000
3500
USAEU
-25
Japa
n/Ko
rea
Indi
a
China
Russia
Latin
Am
erica
Africa
Mid
dle
East
Mto
e 2002
2030
Regional shares in world primary energy demand
Two-thirds of increase in world demand in 2003 - 2030 comes from developing countries, especially in Asia
62%51%
42%
16%
10%
9%
22%39%
49%
0%
20%
40%
60%
80%
100%
1971 2003 2030
OECD Transition economies Developing countries
Global energy demand: forecast IEA
Gas demand is expected to grow faster than total energy demand……
100
118
139
159
54
100
123
157
187
41
1971 2002 2010 2020 2030
Total primary energy
Gas
Reference yearIndex=100
Global energy demand: forecast IEA
Power generation is a major driver of the growth in gas demand
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
1971 2002 2010 2020 2030
Mto
e
54
100
118
139
159
187157
123
41
TOTAL PRIMARY ENERGY
Gas for
Power
Gas for other market segments
Global energy demand: forecast IEA
Life-cycle CO2 emissions from Power Plants
Sources: life-cycle assessment of electricity generation systems and applications for climate change policy analysis, Meier, 2002, published on website Nuclear Energy Institute; own data; IEA
0100200300400500600700800900
10001100
gra
m/k
Wh
coalgas
gas, CCGT
wind
nuclear
hydro
biomass
geothermal
solar pv
CCGT as Back UP
spread due to type of coal (lignite/hard coal) and technology (old/new-high-efficiency)
Global trends
• Fuel demand increases steadily
• Gas is a relatively low CO2 emittor
• Large world gas reserves
Data: BP Statistical Review 2005
North America
2.5
South and Central America
2.5
1.8
Europe
Africa
4.9
Middle East
25.7
Russia
Asia Pacific Region
16.9
4.9
Proven reserves: 6,354 trillion cubic feet .Shown in 1000 TCF:
Current proven gas reserves equivalent of 67 years gas consumption (level 2004)
Global trends
• Fuel demand increases steadily
• Gas is a relatively low CO2 emittor
• Large world gas reserves
• Increased oil and gas prices
Gas price linkage to oil price
• Gas and Oil remain substitutes in major parts of the energy market
• Important parts of industry dual-fired• Large hedging users prefer oil-related gas prices• Upstream shackles of the gas and oil chains are very
similar
Gas Prices will remain linked to oil prices, but with their own volatility
Global trends
• Fuel demand increases steadily
• Gas is a relatively low CO2 emittor
• Large world gas reserves
• Increased oil and gas prices
• LNG projects allow for global competition in gas
LNG
• Gas importing regions will have to compete for supply
• LNG market still small (6,5% of gas is traded as LNG)
• Bottlenecks in LNG-chains till 2008 – 2010
• many large projects in execution phase
• Global price level of natural gas is so high that LNG is competitive wherever it originates from
• Traditional gas supply patterns (Russian gas to Europe, Mid Eastern gas to Pacific Rim, North America autarctic) will give way
Global trends
• Fuel demand increases steadily
• Gas is a relatively low CO2 emittor
• Large world gas reserves
• Increased oil and gas prices
• LNG projects allow for global competition in gas
• Markets develop to more competition and short-term contracts
Will world gas prices become more aligned?
Benchmark World Gas Prices
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
$ /
MM
BT
U
US Henry HubJapan LNG, RegasifiedUK National Balancing PointContinental Europe Indicator
Source: M. Speltz, Chevron, sept 2005
Contribution of energy to economic growth (1980-2001)
Average annual GDP growth (%)
Contribution of factors of production and productivity to GDP growth (% of GDP growth)
Energy Labour CapitalTotal factor productivity
Brazil 2.42 77 20 11 -8
China 9.55 13 7 26 54
India 5.57 15 22 19 43
Indonesia 5.05 19 34 12 35
Korea 7.21 50 11 16 23
Mexico 2.19 30 60 6 4
Turkey 3.74 71 17 15 -3
United States 3.24 11 24 18 47
Sources: IEA analysis based on IEA databases and World Bank (2004).
Conclusions
• Energy supply important driver behind economic growth• Gas is attractive fuel option
– Low Co2 emissions – Global market– LNG opens non-traditional gas markets – Large global gas reserves– Rapid growing gas market fosters liquidity and transparency
• Expanding gas infrastructure is pre-requisite for well functioning global gas market
• This requires a stimulating policy and regulatory framework: – predictable – consistent – transparent