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Australian Energy Producers Journal Australian Energy Producers Journal Society
Journal of Australian Energy Producers
RESEARCH ARTICLE (Non peer reviewed)

Radical disruption – renewables, technology and the arrival of ‘peak gas’

Gavin Thompson
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Wood Mackenzie, 3 Church Street, Singapore, 049483. Email: gavin.thompson@woodmac.com

The APPEA Journal 58(2) 630-632 https://doi.org/10.1071/AJ17144
Accepted: 29 March 2018   Published: 28 May 2018

Abstract

Debate on the timing of peak oil has become mainstream, as shifting energy demand patterns are compounded by the accelerating threat from disruptive technology such as EVs. At the same time, natural gas demand is seen as a beneficiary of these changes – the much-vaunted transition fuel to a low carbon future. But what might happen to long-term gas demand when factors that could radically reshape energy markets become entrenched? Improvements in energy efficiency, growth in renewables, major advances in energy storage technologies and access to decarbonised electricity are now raising the prospect of ‘peak gas’.

In this paper, Wood Mackenzie presents an examination of the key uncertainties impacting the future of gas demand globally, including:

• How quickly can technologies such as batteries and storage be developed and what constraints might they face?

• Could environmental policy and falling costs mean we are currently underestimating the future growth in renewables – specifically wind and solar power?

• How are oil and gas companies responding to the challenges that lie ahead?

The impact of these developments will be critical for gas and liquefied natural gas (LNG) producers as they assess the timing, returns and demand for future gas supply. Indeed, for Australian developers these uncertainties could be enough to stop multi-billion-dollar LNG projects taking final investment decisions as early as the 2020s. Wood Mackenzie argues that the time for companies to address peak gas is now – the dynamics of marginal change will likely mean markets will be reshaped sooner than the industry is currently prepared to acknowledge.

Keywords: gas demand, peak gas, renewable energy, wind, solar, technology.

Gavin Thompson is Head of Asia Pacific Research. Gavin joined Wood Mackenzie in 1997, managing the company’s Asia Pacific Energy Markets team from 2000 to 2003. Between 2003 and 2014 Gavin was based in Beijing managing Wood Mackenzie’s China research. During this time he worked on a range of projects with domestic and international energy companies. Gavin relocated to Wood Mackenzie’s Tokyo office in early 2014 to head Wood Mackenzie’s gas and power research across North East Asia before returning to Beijing in early 2016 to lead Wood Mackenzie’s overall China business. In January 2017 he took up the position of Head of Asia Pacific Research, leading a team of around 100 analysts. He is currently based in Singapore. Gavin graduated from Newcastle University with a first class honours degree in Politics, Economics and Chinese Language.