The Petroleum Exploration and Production Association of New Zealand (PEPANZ) says a report released this week by the International Energy Agency (IEA) shows oil and gas will continue to be the cornerstone of the world’s energy supply, with demand for both forecast to increase over the next 25 years.
PEPANZ Chief Executive Cameron Madgwick says the IEA’s World Energy Outlook 2016 forecasts consumption of natural gas to grow by 50 percent by 2040, with oil demand growing at a slower rate, but still reaching 103 million barrels per day by 2040.
“Together oil and gas will make up over half of the world’s energy consumption in 2040,” says Mr Madgwick.
“While renewable energy will see the fastest growth over the next 25 years, energy demand around the world will also increase by around a third over the same period, meaning we will need to increase the use of all energy sources to meet our needs.
“While the number of electric cars will continue to grow, demand for oil will be driven in the growth of the freight, aviation and petrochemical sectors, where alternatives are scarce.
“The IEA also suggests that an oil shortfall could begin to emerge in the early 2020s because of the current low levels of global exploration resulting from the low oil prices experienced over the last two years. This will inevitably lead to a marked increase in the price of oil.”
Mr Madgwick says New Zealand could be well positioned to help meet the world’s future energy demands while growing our economy
“New Zealand is underexplored by world standards, and we are currently only producing from one of our sedimentary basins – Taranaki,” says Mr Madgwick.
“While we need to be cautious, international interest in New Zealand’s oil and gas potential is strong and exploration activities are occurring in a number of locations around the country.
“A significant find could result in billion dollars of both new investment and export earnings, as well as significant increase in royalties paid to the government, helping fund essential infrastructure and social services, while also increasing the size of our economy and our living standards.