Is natural gas demand about to peak? This year’s @IEA World Energy Outlook helps shed light on this important question. A quick thread: Ultimately, if you believe in gas as a transition fuel, you have to accept that it’s not a volume play: you don’t need a lot of gas to back up renewables if they grow at the level implied by today’s policy settings.

Our new @IEA report finds that that clean energy transitions are cheaper than the path we are currently on. How could this be? Surely sticking with fossil fuels is cheaper than buying fancy new kit like EVs and heat pumps…right? Nope. Let’s get into it. Exhibit A is that clean energy technology costs have come down massively over the past several years (even if there was a period of post-pandemic cost inflation).

Can the oil and gas industry play a constructive role in transitions? This is one of the burning questions for the climate. Today, the @IEA released a massive new report on the subject. Let’s dive in for a quick one, shall we? If you’re an oil and gas company, how do you play a part in transitions, especially now that a peak in fossil fuels is visible before 2030? How do you plan for a scenario reaching net zero where, for every dollar invested in fossil fuels, 10 dollars gets invested in clean energy?

Lots of reactions to the #IEA World Energy Outlook 2023 finding that fossil fuels reach a peak based on today’s policy settings (the ‘STEPS’ scenario). Worth digging in a bit as to what a peak actually means (and doesn’t). Thread. If you want to dismiss the idea of a peak in fossil fuels, you’d point to the strong historical relationship between GDP and fossil fuels. But this relationship is already changing and, in all our scenarios, it is transformed by the emergence of a clean energy economy.

Not many people realise that 15% of energy-related GHG emissions come from the process of getting oil and gas out of the ground and transported to consumers. If those emissions were a country, they would be the second largest emitter, after China. How do we reduce them?🧵 Today, the @IEA released a report about these ‘scope 1+2’ emissions, drawing together a body of work many years in the making. The headline message: these emissions can and should drop by more than half by 2030, and it’s one of the cheapest ways of cleaning up the energy system.

EU natural gas demand fell by 55 bcm in 2022, the largest reduction in its history (equivalent to gas use in >40 million homes). There’s been a lot of debate what the main drivers were, and so today the @IEA released a commentary exploring how all this happened. Quick thread. There was quite a lot of variation between sectors and countries. Germany cut the most gas in absolute terms, but in percentage terms it was the Baltic and Nordic countries.

For the first time ever, the @IEA World Energy Outlook sees a peak in natural gas demand, calling an end to the 'Golden Age of Gas'. This drives the overall peak in fossil fuels we project this year. But what does a peak for gas (or better, a plateau) actually mean? Thread. Reaching a plateau is indeed big news. Natural gas grew by 20% from 2011 to 2020. The WEO projection is for 5% growth from 2021 to 2030, and then pretty much flat after that.

How much will it cost for the world to transition coal? That’s the trillion dollar question. At the @IEA, we did a detailed assessment of every coal plant in the world, and all the coal used in industry, to make some estimates. Let’s ‘dig’ in... The total investment needed in clean energy to displace coal? $380 billion per year, globally, from now until 2030. That is around 20% of all clean energy spending in our Announced Pledges Scenario, which gets the world to 1.7°C by 2100.

European Union imports of Russian natural gas in 2022 will be down to around 60 bcm. The last time they were so low was in 1984. Here are some insights on where we go from here, using our latest @IEA #WEO2022 projections What happens next with Russian gas is obviously uncertain, but as @tim_gould_ said at the WEO launch yesterday, we assume that there’s no way back for the EU-Russia gas relationship. That relationship was built up over many decades on the basis of trust. And that trust has gone.

Everybody is staring in disbelief at European #gasprices. If the gas market is broken as many have been saying, it would most visibly be seen in the TTF benchmark. Here are my two cents (warning, lots of correlations ahead!) The main explanation for the much higher level of TTF is the fear premium brought about by Russia’s withholding of supply (pre-invasion), tight LNG markets and very low EU storage. But TTF really is off the charts. Fundamentally, is gas really worth the equivalent of $200/bbl?

The focus of Europe’s gas supply crunch has mostly been on storage levels, Russian imports, and LNG. That makes sense, because the crisis is an acute one, and is mainly due to supply problems. But what about the longer-term? What can be done to reduce future vulnerability? 1/10 Recognising the importance of storage is of course crucial, and supply diversity is likewise essential for security of supply. But demand has been less of a focus, except when we hear about curtailed factory output or gas-to-coal switching in the power sector.

A thread on today's crazy high #naturalgas prices, with a few thoughts on long-term implications: Gas prices have been on a wild ride of late. Several price benchmarks are sky-high. In Europe, the main spot price benchmark (the “TTF”) is a whopping €50/MWh ($17.5/MBtu). That’s never happened before. Various indices tell us Asian spot prices are above $15/MBtu, too. Yikes.

I’m trying to lose weight, which is kind of like trying to address #climatechange. I made a bunch of pledges to myself at my very own COP35 before Christmas 2019. But how can I do it, and will I succeed? 1/11 A diet is about finding the right balance between energy demand and supply. I can reduce my consumption, switch to healthier fuels (less ‘fossil’ varieties, more ‘greens’). I can also exercise, making everything more #energyefficient. Setting targets is also important. 2/11