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January 14, 2015

Energy: Cheaper, Greener from Here?

By Commodities NowLondon, 14 January 2015
Energy companies will feel the impact of low oil, gas and coal prices in 2015, according to a free report by the Economist Intelligence Unit, sponsored by Accenture. By December, a global climate-change treaty replacing the Kyoto Protocol is at last likely to be signed, argues industries in 2015.

Martin Adams, energy editor at The Economist Intelligence Unit, says: “The oil glut will grow as shale drilling keeps expanding in the US, albeit more slowly. Low oil prices will force Western majors to slash spending further, after years of bloat. At the other end of the spectrum, clean-tech companies will look for a boost from a new agreement on global warming. But the new treaty is set to be weak and non-binding.”
  • Average Brent oil prices will be significantly lower than in 2014
  • A weak global climate-change treaty is likely to be signed in December
  • Demand for renewable energy, natural gas and nuclear will outpace that for other fuels
Despite this, demand for renewable energy ex-hydropower will grow by 13%, thanks to local and national incentives, as well as falling equipment costs. Consumption of renewables, nuclear and natural gas will outpace that of petroleum products and coal. Although demand for coal will expand slightly, it will come under an intensifying attack from regulators in the US, China—the biggest market for coal—and elsewhere.
Sanctions on Russian energy firms, imposed over the Ukraine crisis, are likely to lapse in mid-2015. Yet European countries will step up efforts to wean themselves off Russian gas.
Ends --
Courtesy Commodites Now (EconMatters author archive here)  

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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