Global Gas Glut Threatens Green Energy
Source: The Times, Robin Pagnamenta (12/3/09)
"Gas supply capacity is set to outstrip annual demand growth of 2.5% between 2010 and 2015."
Sam Laidlaw, chief executive of Centrica, said that an expected surplus of global gas supplies over the next five years could force down wholesale prices to a level where energy companies may be discouraged from investing in more costly alternative sources of energy, such as nuclear reactors and offshore wind farms—particularly if this was accompanied by continued weakness in the price of carbon emissions permits.
"If you have a low gas price and a low carbon price, then the investment signals [for nuclear and wind] won't be there," Laidlaw said, adding that it was essential that UN climate talks in Copenhagen next week led to the creation of a robust international price for carbon to bolster the investment case for low-carbon energy. "That is why Copenhagen is so important. The answer comes back to the carbon price."
The International Energy Agency (IEA) said this month that rising production of so-called unconventional gas in the United States and Canada, using new technology, was creating an oversupply.
Global unconventional gas output will rise to 629 billion cubic metres in 2030 from 367 billion cubic meters in 2007, or to 15% of worldwide supply from 12%, the Paris-based adviser to 28 countries said in its annual World Energy Outlook. Gas supply capacity is set to outstrip annual demand growth of 2.5% between 2010 and 2015, the IEA said.