THE dominance of Big Oil will be usurped in less than two decades by the dawn of a golden age for natural gas lasting at least until the middle of the century.
One of the world’s biggest risk assurance experts in the global energy industry has predicted that gas will emerge as the world’s most important source of energy by the mid 2030s after a slow descent for oil which will peak within ten years and the ongoing decline of coal.
Remi Eriksen, the boss of Norway’s DNV GL, said the group’s first conservative prediction for the future of the global energy industry has revealed a boom in renewable energy which will meet around half the world’s needs – but gas will be the largest single source of energy for decades to come.
“Gas will overtake oil as the world’s biggest source of energy by 2034. By 2050 it will be the single biggest source at 27pc of demand,” he said. He added that the demand for gas will tower over the use of individual renewable energy sources such as wind, hydro and solar power, although when totalled together renewable energy will make up 50pc of energy use.
The fresh findings are reassuring for investors in oil supermajors BP and Royal Dutch Shell which have both begun to shift their portfolios towards gas exploration and production in the wake of the global oil price crash.
Mr Eriksen said Big Oil will continue to move towards gas on economic grounds due to its low cost compared to oil, and high demand for gas from electricity generators looking for a fuel which is less polluting than burning oil and coal.
“There will be oil and gas in the future, and there will need to be further exploration of our resources because the depletion of existing reserves will be faster than the drop in demand,” he said.
“But it will all depend on cost. The other factor is electric vehicles which by 2030 will really take a bit out of oil consumption from cars,” he added.
Nonetheless Mr Eriksen predicts that the world is still falling short of goals to limit global warming to within two degrees Celsius, the point at which climate change is predicted to wrought catastrophic consequences on the environment.
He said the gloomy prognosis could still be avoided if programmes to use hydrogen for heat, together with carbon capture technology move ahead. But the findings should serve as “a wake-up call to all stakeholders in the energy system”.