Wednesday, 30 January 2013

The shale gas revolution is creating a new kind of 'peak oil'

The brand new Viking Line cruise ferry Viking Grace is fuelled by liquefied natural gas, meaning that sulphur oxide emissions will be almost zero, and nitrogen oxide emissions will be at least 80 per cent below the International Maritime Organization’s (IMO) current stipulated level. Furthermore, there is a reduction of particulate emissions of more than 90 per cent compared to the emissions from conventional diesel engines, while carbon dioxide emissions are also 20-30 per cent lower

“LNG can provide great advantages for our commercial customers as a future energy solution in transportation”
Marvin Odum,  President of Shell Oil Company 

The fast growing supply of inexpensive and environment-friendly natural gas (including shale gas and LNG) is rapidly creating a new kind of "peak oil". Energy giant BP is predicting that the demand for oil will slow down to just 0,8% a year up to 2030, only half the projected total worldwide energy demand growth rate. And there are experts who think that the switch to plentiful natural gas will cut crude oil's supremacy even more. 

Oil is already being priced out of power generation and industry, and the same is expected to happen in the transport sector: 

Trains, ships, and even aircraft are all potential targets, too. Buses powered by compressed natural gas (CNG) – LNG’s less potent older brother – already ply the streets of Dallas and other cities. Rotterdam and Singapore have both outlined plans to become a hub for LNG-powered shipping.

There’s plenty to aim at here. International shipping and aviation fuel plus road freight will account for about 15 million barrels a day of oil demand by 2035, according to the International Energy Agency (IEA). That is a quarter of the projected 60-million-barrel daily oil-for-transport pot.
LNG-powered ships are already a reality, even though the fleet is modest for now. A report by ship classifiers Det Norske Veritas last year predicted that 30 per cent of new vessels will be LNG-powered by 2020. Tankers that carry LNG are an obvious early target. Another classifier, Lloyd’s Register, said the use of LNG as a fuel will pick up from 2019 and could be as much as 8 per cent of global bunker fuel demand before 2025.
Airlines have yet to crack the LNG nut, but the first commercial gas-powered civil aircraft flight left Doha for London on Jan. 9 this year, fuelled by another potential gas-to-transport game-changer – jet fuel made from gas.
Read the  entire article here

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