Report says gas will surpass oil as global energy source

By Patrick C. Miller | July 03, 2018

A new report from DNV GL—a global quality assurance and risk management company—shows growing confidence that natural gas will play an increased role in the global energy mix.

Eight-six percent of 813 senior industry professionals agree that gas use will increase worldwide over the next decade, compared to 77 percent last year. The findings appear in “Transition in Motion,” a special report from DNV GL on the outlook for the oil and gas industry in 2018.

The report showcases DNV GL’s 2018 Oil and Gas Industry Outlook research and 2017 Energy Transition Outlook. Other key findings of the report include:

-       The evolution of the global energy mix is gaining pace. Among senior oil and gas professionals, 44 percent say their organization is now actively preparing for a transition to a less carbon-intensive energy mix.

-       About two-thirds (64 percent) say their organization is increasing or sustaining its investment in gas projects in 2018, with gas forecast to overtake oil and become the world’s largest energy source by the mid-2030s.

“Society’s transition to a less carbon-intensive energy mix is already a reality, and oil and gas will continue to be crucial components,” said Liv Hovem, CEO of DNV GL oil and gas. “Our research affirms that the industry is already taking positive steps to secure the important role we forecast gas to play in helping to meet future, lower-carbon energy requirements.”

DNV GL forecasts that global oil demand will plateau within the next 15 years, peaking in the early 2020s. However, global gas demand will continue to grow for another two decades and peak during the mid-2030s. The company predicts that gas demand will be about 15 percent greater than it was in 2017. In addition, gas will overtake oil to become the world’s largest energy source.

“Significant investment will be needed in the gas industry over the coming decades to increase capacity, transform assets to source and transport a decarbonized mix of energies, and to safely build and maintain the infrastructure needed to connect emerging supply regions with evolving demand centers,” Hovem noted.

According to DNV GL’s report, gas demand will mature within the next 20 years as hydrogen, wind, solar, biofuels and other new energy technologies gain momentum. After gas demand peaks in the mid-2030s, the firm believes the energy transition toward phasing out fossil fuels will begin.

The report stresses “there are uncertainties that could change the trajectory of the energy transition, an impact the prospects for gas.”