US-China climate change impact on fuel demand

November 17:

Australia - a major exporter of both metallurgical and thermal coal - wouldsuffer from the reduced demand for coal.

Oil and coal demand will plummet - and natural gas demand will soar - over the next few decades, even without last week's climate change deal between China and the US, according to research from Citi.

And if it is assumed that China and the US will meet their 2030 emission targets, "far-reaching reassessment" of long-term fossil fuel values would be required.

"But with existing policies, current market dynamics in China and the United States should still affect trillions of dollars of oil, gas and coal demand already," said the research, entitled "A New Climate Order". 

"Existing (carbon reduction) policies and subdued market conditions could lead to lower demand from 2015 to 2030 in the order of US$1.3 trillion for oil and as much as $US1.6 trillion for coal.  

Read more: http://www.smh.com.au/business/mining-and-resources/uschina-climate-change-impact-on-fuel-demand-20141118-11owqt.html#ixzz3JNr0lCAb

"In contrast, the likely rise in gas demand could be worth $US1.3 trillion."

Under these existing policies, Australia - a major exporter of both metallurgical and thermal coal - will suffer from the reduced demand for coal.

But Liquefied Natural Gas - for which Australia is expected to be the world's major exporter by 2019 - will increase in demand.

Oil demand would slow, said the Citi research, "as fuel efficiency improves and alternative vehicles become more available". Coal demand would slow unless new technology was widely implemented that could reduce emissions from coal-fired generation.

But for gas, "demand growth accelerates due to fuel-switching, mostly in the power sector, but also (due to) some inroads in other sectors."

Source: www.watoday.com.au/business/mining-and-resources/uschina-climate-change-impact-on-fuel-demand-20141118-11owqt.html?