Shell: Middle East gas supplies under pressure

Speaking in Cairo, Malcolm Brinded, the executive director for upstream business at Royal Dutch Shell has been quoted as saying that, in the Middle East, energy supplies were under pressure from increasing demand and population pressures.

While this is not news to anyone in the energy industry, Brinded added that even "with heavy investment in all energy sources - from oil and natural gas, to biofuels, nuclear power, solar and wind - it will be extremely tough for the world to keep pace with rising demand."

For years, the energy industries have been investing hard in renewable sources of energy in the hopes of having an alternative to rapidly reducing fossil fuel resources. This news will serve as an indicator of how much more investment needs to go into alternative fuel sources.

However it will be good news to members of the Gas Exporting Countries Forum (GECF) who have been hard hit by the slump in prices over the last year, with North American prices dropping 28 percent from their December 2009 levels.

"We see global gas demand growing by at least 2 percent a year over some decades, so by 2030 we look at gas demand hitting 4.5 trillion m3/yr," said Malcolm Brinded, "That's 50 percent up from today's levels."

2030: Perfect storm

Of course, with population growth and energy demand growing at current rates, 2030 is meant to be the year when a ‘perfect storm' of population, food demand and energy consumption woes all come together.

Brinded predicted that despite the rough year LNG has had thus far, global LNG demand would double in the next decade driven by increasing industrialisation and increasing use of gas for power generation.

According to the International Energy Agency there are sufficient reserves to meet this global demand with 250 years of recoverable gas reserves. The problem is that it will take some US$5 trillion over the next 20 years in order to extract the gas.

As such, firms like Shell are looking at alternatives. The question is whether it will be enough to prevent a serious global energy shortage.

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