All content in this website is sourced legitimately

Page No: 1
Coal on the decline: Will it be gas next?
Jun 15: The fortunes of coal appear to have taken a decisive break from the past. At the heart of this shift are structural, long-term, factors: the increasing availability and competitiveness of natural gas and renewable energy; combined with mounting government and societal pressure to shift away from coal towards cleaner, lower-carbon fuels. These long-term forces in turn have given rise to policy responses that have often added even greater momentum.
8But will gas as a fuel also face the same fate as coal in some time to come?
8Global gas consumption increased by a mere 1.5% in 2016, weaker than its 10-year average of 2.3%.
8Lower consumption growth has left policy makers confounded, more so as it was accompanied by falling gas prices – Henry Hub prices were 5% lower than in 2015 while European and Asian spot prices were down between 20-30% due to increased LNG supplies.
8What has caused the flattening out of gas consumption even when prices have been low?
8A startling fact unearthed by a recent study was that the lower output had resulted from higher renewable energy production in some gas consuming countries.
8Will gas then go the way coal has gone?
Out comment: An argument is always advanced that the demand for gas will pick up from markets which have not been exposed to it earlier.
 Data shows that newer markets, such as Pakistan, Egypt and Poland, accounted for a big chunk of the incremental demand for LNG in 2016.
As developing countries in Africa and Asia go up the growth curve, their demand for fossil fuels, including gas, will more than compensate for the fall in consumption in the developed world, the argument goes.
But there is a growing body of evidence that suggests that the very factors which will lead to a fall in demand for gas in the developed world will also have a similar impact in the developing world, as  path-breaking technological change, such as the advent of an economical driverless electric car, or low cost energy storage devices among others, will disseminate quickly around the world.
There is already a decoupling of economic growth from carbon emissions, and there is no reason to assume that higher growth will entail a larger use of fossil fuels.
The conventional wisdom that gas will substitute coal as fuel is not longer held to be true. If coal is dubbed as a dirty fuel, it won't be long before gas too is similarly labeled, when methane leaks are taken into account and a tax on such emissions is levied.
The bitter truth is that gas is directly in competition with renewable energy now, and if coal is no longer a viable option, it is only a matter of time before gas becomes unviable too. And this can happen well within the foreseeable future.Click on Report for more.


Back  |  Top