Straights Times: Solving Asia's gas conundrum
Two intertwined revolutions, both centred on Asia, are remaking our world. The surge of emerging economies has lifted more than 500 million Asians out of poverty so far this millennium. But as that growth expands the global economy, increased use of fossil fuels is leading to higher costs and environmental burdens that call into question the sustainability of that energy use.
Over the longer term, the whole world - Asia included - must shift from fossil fuels to a low-carbon energy system that features more efficient use of energy. But in the medium term, gas can play a more important role in Asia. That shift will be challenging, but the region can overcome those challenges.
First, here is what Asia cannot count on: cheap, abundant gas unleashed by the shale revolution. While some North American liquefied natural gas (LNG) will cross the Pacific - probably sooner than later - it will not be enough to supply the entire region and it will be pricey. New supply-side investment will relieve some of that cost premium, but, at the same time, we can all see the ongoing geopolitical turmoil in Ukraine and the Middle East, either of which could tighten LNG markets.