A Bridge to a Low-Carbon Future? Modelling the Long-Term Global Potential of Natural Gas
||McGlade, C., Bradshaw, M., Anandarajah, G., Watson, J. and Ekins, P. A Bridge to a Low-Carbon Future? Modelling the Long-Term Global Potential of Natural Gas. UKERC. 2014. |
||McGlade, C., Bradshaw, M., Anandarajah, G., Watson, J. and Ekins, P.|
|UKERC Report Number
This project uses the global TIMES Integrated Assessment Model in UCL (‘TIAM-UCL’) to provide robust quantitative insights into the future of natural gas in the energy system and in particular whether or not gas has the potential to act as a ‘bridge’ to a low-carbon future on both a global and regional basis out to 2050.
We first explore the dynamics of a scenario that disregards any need to cut greenhouse gas (GHG) emissions. Such a scenario results in a large uptake in the production and consumption of all fossil fuels, with coal in particular dominating the electricity system. It is unconventional sources of gas production that account for much of the rise in natural gas production; with shale gas exceeding 1 Tcm after 2040. Gas consumption grows in all sectors apart from the electricity sector, and eventually becomes cost effective both as a marinefuel (as liquefied natural gas) and in mediumgoods vehicles (as compressed natural gas).
We next examine how different gas market structures affect natural gas production, consumption, and trade patterns. For the two different scenarios constructed, one continued current regionalised gas markets, which are characterised by very different prices in different regions with these prices often based on oil indexation, while the other allowed a global gas price to form based on gas supply-demand fundamentals. We find only a small change in overall global gas production levels between these but a major difference in levels of gas trade and so conclude that if gas exporters choose to defend oil indexation in the short-term, they may end up destroying their export markets in longer term. A move towards pricing gas internationally, based on supply-demand dynamics, is thus shown to be crucial if they are to maintain their current levels of exports.