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Rapid Pivot to Gas Crucial for Future Energy Mix

The crash in the oil price during March, caused by oversupply coinciding with an expected large drop in short-term demand because of the COVID-19 pandemic, will cause severe disruption to the industry for at least the next 12–18 months. Whether the low price spurs greater demand for oil when the pandemic subsides, or whether demand for oil continues to drop for the next few years, does not really affect the longer-term trends that we examine in this article.

There are numerous views of what the future energy landscape will look like in the next decade and beyond. A common theme throughout is that energy use could switch quite rapidly, from fossil fuels to electrical energy. Many studies, to varying extents, have examined the impact of a primary energy supply that evolves away from oil and coal, and toward renewables.

Although a pivot to gas is widely talked about, none of the major oil companies have yet to significantly alter the ratio of gas vs. oil produced. However, all acknowledge that this is essential. There is no easy alternative that can provide cleaner energy at the volume required to sustain a growing world population with an increasing per capita energy demand.

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Rapid Pivot to Gas Crucial for Future Energy Mix

Andrew Sewell, Xodus Group

01 May 2020

Volume: 72 | Issue: 5

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