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Europe faces higher electricity bills and a supply crunch, as utilities struggle to finance new gas-fired power plants unless they meet tougher emissions criteria.
DUBAI: The rising oil price could allow for a significant return of US shale to the market in 2022, potentially threatening the rebalancing of the global oil market, according to an analysis by the authoritative Oxford Institute for Energy Studies. In its latest monthly report, Institute Director Bassam Fattouh and analyst Andreas Economou wrote: “As we enter 2022, the US shale response becomes a major source of uncertainty amid an uneven recovery across shale plays and players alike. As in previous cycles, US shale will remain a key factor shaping market outcomes.” With global crude prices heading back toward $70 a barrel, the financial pressures on US shale have eased, and producers have adapted to the constraints of lower demand. “There has been a shift in perceptions about this sector’s behavior. There is a widely held belief that US shale producers have endorsed the principle of capital discipline,” the authors said.
Natural Gas in Question as Bridging Fuel for Energy Transition
The EU sees the tightening requirements for gas investments, along with the cancellation of planned gas projects, as being in favor of renewables. May 14, 2021
Natural gas may fall from favor in the energy transition as the push for zero-emissions strengthens.
Natural gas may be facing an uphill battle in proving itself as a suitable bridging fuel between conventional hydrocarbons and renewable energy sources, especially in Europe where urgency over climate change has ramped up and the call for a quicker path to decarbonization grows louder. As a result, natural gas plant projects across the region are having a harder time finding financing as lenders are pressured to ratchet up the emissions criteria required for funding.
While fossil gas is often seen as a transition fuel towards a fully decarbonised energy mix, GE Gas Power sees low-carbon gas as “a destination technology” with a potential to convert power plants to run 100% on clean hydrogen by 2030.