Gas Overtakes Oil in 2026: DNV GL
Natural gas will overtake oil as the world’s primary energy source in 2026 and account for a quarter of the world’s energy by mid-century, according to new research by DNV GL.
The Norway-based global quality assurance and risk management company's 2018 Energy Transition Outlook, published September 10, predicts that global upstream gas capital expenditure to grow from $960bn in 2015, to a peak of $1.13 trillion in 2025. Upstream gas operating expenditure is set to rise from $448bn in 2015 to $582bn in 2035, when operational spending will be at its highest.
Major savings in time and money will come from automating processes and faster analysis of data: it says cloud-based technologies and the ability to create 'digital twins’ — virtual representations of an asset based on available design and operating data — present a huge opportunity for greater operational and cost efficiencies in future oil and gas operations and networks.
While DNV GL’s model predicts global oil demand to peak in 2023, demand for gas will continue to rise until 2034. New resources will be required long after these dates to continue replacing depleting reserves.
"Significant levels of investment will be needed in the coming decades to support the transition to the least carbon-intensive of the fossil fuels,” said the CEO of DNV GL – Oil & Gas, Liv Hovem. “Gas will fuel the energy transition in the lead-up to mid-century. It sets a pathway for the increasing uptake of renewable energy, while safeguarding the secure supply of affordable energy that the world will need during the energy transition,” she added.
Conventional onshore and offshore gas production is forecast to decline from about 2030, while unconventional onshore gas is expected to rise to a peak in 2040. DNV GL expects this trend to lead to leaner, more agile gas developments with shorter lifespans.
Northeast Eurasia, the Middle East and North Africa will continue to account for most onshore conventional gas production in the lead-up to 2050, while North America will continue to dominate unconventional gas production. In the offshore sector, the Middle East and north Africa will see the highest annual rate of new gas production capacity from now until at least 2050.
DNV GL expects liquefaction capacity to double by the late 2040s, as the midstream sector connects shifting sources of gas with changing demand centres. Seaborne gas trade is forecast to treble from North America to China by 2050. An increase in trade from Sub-Saharan Africa to India and southeast Asia is also expected.
DNV GL forecasts further transition for the sector in the lead-up to 2050, as greener gases — including biogas, syngas and hydrogen — enter transmission and distribution systems.