GCC gas contracts worth over USD 68 billion have been awarded to spur production over the next five years.
Deloitte’s 8th edition white paper, ‘Middle East Energy and Resources: Managing scarcity for the future’ says despite the growing focus on renewable energy, oil and gas will supply more of the world’s energy needs in the future, and by 2040 will supply 60 percent of total global energy. In 2010, oil and gas supplied 55 percent of the world’s total global energy.
“Although oil is projected to remain the primary fuel, significant advancements in technology will cause natural gas to overtake coal as the number two fuel source.” — Deloitte white paper
In the United States, due to increasingly strict clean air regulations, the conversion of coal-fired power plants to natural gas-fired power plants is well underway. Separate from the changing clean air regulations, but happening at the same time, is the great leap of technological change, which is helping to facilitate the change-up from coal to gas. The third spike in the coal coffin, is the dramatic fall in prices of natural gas, due to the ‘fracking’ boom taking place in the United States and other countries.
In the Middle East region, gas will overtake oil after 2025, with half of all energy coming from gas by 2040.
Kenneth McKellar; “Although oil and gas is set to rise, it is important to note that alternative energy sources such as nuclear, wind, solar and biofuel will also take on an increasingly significant role in meeting the world’s energy needs in the future.” — Kenneth McKellar, Energy and Resources leader at Deloitte in the Middle East
The recommended course? A sustainable future
Professor Raed Bkayrat; “Every country in the GCC needs to start now, to look at diversifying their energy mix and reducing the internal burn rates of fossil fuels. For various reasons, from preserving long term deposits of this very expensive natural hydrocarbon resource, to creating local jobs, to bringing in new technology, to having positive socio-economical impact to helping the environment.
Different technologies supported by government regulations need to be looked at and developed.
This should be done hand in hand with developing energy efficiency markets whereby the government would step in to provide subsidies to end users for Kw.hr saved as opposed to the usual consideration of subsidies for kw.hr generated in renewables.
The path to a sustainable energy mix is not easy and requires engagement of all involved but its something that will have extremely positive long terms impacts on everyone in the region.” — Professor Raed Bkayrat, King Abdullah University of Science and Technology (KAUST)
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