[Global Times Comprehensive Report] Natural gas is considered a "clean" fossil fuel, and its use as an energy source can reduce emissions of sulfur dioxide, carbon dioxide and nitrogen oxides.
For some time now, "clean" natural gas has replaced "dirty" fuels such as oil and coal as an important part of the global green transition to energy.
However, Bloomberg reported on the 15th that in the context of the Russian-Ukrainian conflict and the Western sanctions against Russia's natural gas exports, the prices of natural gas and liquefied natural gas in the international market have soared, and the trend of returning to burning oil, coal and other fuels because natural gas cannot be burned has become increasingly prominent.
Data show that the price of natural gas in the international market in early August was almost twice that of diesel, and the price of natural gas in Europe was basically three times that of high-sulfur fuel oil and propane.
Industry insiders pointed out that many governments have recently announced that they will allow power stations to increase the use of oil and coal fuels due to concerns about tight natural gas supplies this winter.
The International Energy Agency estimates that global oil demand will increase by 380,000 barrels per day to 2.1 million barrels per day, based on the conversion of power stations and factories to oil.
As the power generation fields vary from country to country, the extent to which fuels such as oil and coal are used varies greatly from country to country.
Countries such as Pakistan and Bangladesh have large facilities that can switch between natural gas and fuel oil to generate electricity, according to consultancy Wood McKinsey & Company.
With budget constraints unable to purchase expensive LNG, natural gas will be replaced by oil in power generation in both countries.
However, in some countries, coal-burning and oil-burning power stations have been decommissioned for a long time, and the maintenance status of equipment varies, and it is doubtful whether they can resume operation quickly.
Taking Japan as an example, Japan's large-scale oil power generation infrastructure has been idle before, and even if it can be restarted technically, the high cost will become a stumbling block.
If it only resumes operation for a short time, it is basically more than the loss.
Therefore, some people in the industry believe that the demand for oil in Japan's power generation sector will increase year-on-year, but the increase will be limited.
Bloomberg pointed out that the replacement of natural gas by oil, coal and other fuels due to cost pressure is a major obstacle to the global green energy transition.
Many countries will use natural gas as part of a decarbonization effort, and a return to relatively dirty alternatives will make it harder for countries to meet their climate goals.
(Zhen Xiang)