By Choi Kyong-ae
Asian governments should provide clear direction in their energy policies for market participants to help them make key decisions, a senior Wood Mackenzie analyst said Tuesday.
"What's required most is to create clarity on energy policies because there is a lack of clarity and a lack of certainty for some Asian countries," Noel Tomnay, principal analyst at Wood Mackenzie, told The Korea Times in an interview.
Government indecision in areas such as the use of nuclear power in energy policies will only increase liquefied natural gas (LNG) demand uncertainty for major LNG buyers such as Japan, Korea and Taiwan, he said.
For example, Japan has increased its LNG imports since the Fukushima Daiichi incident in 2011 that brought all of its nuclear-power plants to a stop and pushed its trade deficit to a record in 2013. The Japanese government has yet to decide on whether to restart its reactors or not.
Such indecision makes it difficult for those involved in the LNG industry to reach key decisions about investments and purchases.
He did not elaborate on energy policies in Korea and Taiwan.
LNG is increasingly the fuel of choice in Asia because regional governments are putting more pressure on large consumers such as power plants to reduce the environmental impact of fossil fuel consumption.
Globally, over 500 million tons per annum of new LNG supply capacity "is currently proposed for supply to come online" by 2020, mainly from the U.S., Russia, East Africa and Australia. But many of the planned projects may not make financial investment decisions due to the uncertainties on the buyer side, said Wood Mackenzie.
Greenfield LNG is never easy. But while numerous factors hinder new project development, domestic policies that influence buyer behavior are critical. Governments and buyers need to be acutely aware of the implications of energy policy, or sometimes a lack of energy policy, on the pact of some new LNG project development, according to the U.K.-based research and consulting company.
"Clarity is badly needed in order for LNG projects to be developed. Once buyers get more LNG supply, they can have a better exchange of products," Tomnay said on the sidelines of the Gastech Conference & Exhibition held through Thursday in Ilsan, near Seoul.
More than 2,000 global energy experts and companies came to the four-day energy event to discuss ways to promote the use of LNG, the benefits of the super-cooled gas compared to coal and business partnerships.
ExxonMobil Gas & Power Marketing expected LNG demand to triple for the next four decades, jumping from about 215 million tons annually (MTA) in 2010 to around 650 MTA by 2040.
Natural gas will be the world's fastest growing major energy source through 2040. It will overtake coal as the second-largest energy source following oil by 2025, it said.
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Noel Tomnay |
"What's required most is to create clarity on energy policies because there is a lack of clarity and a lack of certainty for some Asian countries," Noel Tomnay, principal analyst at Wood Mackenzie, told The Korea Times in an interview.
Government indecision in areas such as the use of nuclear power in energy policies will only increase liquefied natural gas (LNG) demand uncertainty for major LNG buyers such as Japan, Korea and Taiwan, he said.
For example, Japan has increased its LNG imports since the Fukushima Daiichi incident in 2011 that brought all of its nuclear-power plants to a stop and pushed its trade deficit to a record in 2013. The Japanese government has yet to decide on whether to restart its reactors or not.
Such indecision makes it difficult for those involved in the LNG industry to reach key decisions about investments and purchases.
He did not elaborate on energy policies in Korea and Taiwan.
LNG is increasingly the fuel of choice in Asia because regional governments are putting more pressure on large consumers such as power plants to reduce the environmental impact of fossil fuel consumption.
Globally, over 500 million tons per annum of new LNG supply capacity "is currently proposed for supply to come online" by 2020, mainly from the U.S., Russia, East Africa and Australia. But many of the planned projects may not make financial investment decisions due to the uncertainties on the buyer side, said Wood Mackenzie.
Greenfield LNG is never easy. But while numerous factors hinder new project development, domestic policies that influence buyer behavior are critical. Governments and buyers need to be acutely aware of the implications of energy policy, or sometimes a lack of energy policy, on the pact of some new LNG project development, according to the U.K.-based research and consulting company.
"Clarity is badly needed in order for LNG projects to be developed. Once buyers get more LNG supply, they can have a better exchange of products," Tomnay said on the sidelines of the Gastech Conference & Exhibition held through Thursday in Ilsan, near Seoul.
More than 2,000 global energy experts and companies came to the four-day energy event to discuss ways to promote the use of LNG, the benefits of the super-cooled gas compared to coal and business partnerships.
ExxonMobil Gas & Power Marketing expected LNG demand to triple for the next four decades, jumping from about 215 million tons annually (MTA) in 2010 to around 650 MTA by 2040.
Natural gas will be the world's fastest growing major energy source through 2040. It will overtake coal as the second-largest energy source following oil by 2025, it said.
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