Quarterly Gas Review – Issue 2
In Issue 2 of the new Quarterly Gas Review series:
- We show that the biggest reductions in CO2 emissions occur when primary energy consumption is decreased. The change in energy mix towards greener fuels has so far been much less important. One of the main EU 2020 targets was to achieve its CO2 reduction by being more energy efficient. This worked well in 2006-2014, when for the first time ever the EU managed to grow its GDP while decreasing its energy consumption. At the time this seemed to be a major achievement but, since 2014, the usual positive coupling between GDP and primary energy consumption has restarted. We argue that if the 2006-2014 energy efficiency boost is a non-repeatable event, the EU will not be on track to meet the increased energy savings being discussed to enable the implementation of its 2030 Energy Strategy and it would therefore need to move out of coal and oil much faster than anticipated, as the UK example shows.
- After providing a detailed analysis of hydrocarbon production and reserves for major oil & gas companies, we look at the major challenges IOCs are now facing in a fast energy transition post-COP21 world and find 5 major challenges. The world has never been addicted to oil but to cheap energy. With renewable energy cheaper, the world addiction to energy is moving into renewables. Hence, we doubt that fossil-based companies that are dependent on resource prices could continue to thrive when the world moves away from this resource.