Shale gas and so called "unconventional gases" will also have a big impact, according to the study, Unconventional gas, a global phenomenon.
It examines where and how fast the revolution is taking place, and traces how quickly developments have taken off since the US first cracked the code for CSG and then shale gas over the past two decades, and how the disruption in US markets could easily spread to other nations.
The study, developed with project partner Accenture Strategy, says that despite an uncertain price environment, the magnitude and speed of change is likely to spread from the US to China, Argentina and Algeria, which have similar if largely untested potential as the US in shale gas production.
Countries such as Mexico, Saudi Arabia, South Africa, Poland and Turkey are mentioned in the study as having significant potential for shale gas development.
WEC secretary general Christoph Frei said the spread of unconventional gas around the world is being accelerated because it can make gas more affordable to consumers and reduce concerns about the security of supply.
“So far, the surprising resilience of the US shale gas market has led the way in the shale gas boom, and whilst other countries may not have the unique characteristics of the US, they will learn how to become LNG producers or exporters which will change the global dynamics of energy,” Frei said.
The study defined three emerging global trends: shifting portfolio allocations towards shorter cycle investments over more costly deepwater gas developments; new emerging operators in markets such as China, Australia and Argentina which likely disrupt traditional markets before 2020; and the increasing globalisation of markets across Asia, Europe and North America as excess supplies move around the world with greater freedom.
Lower oil prices and weakened Asian demand has resulted in the virtual disappearance of the price spread between the Japanese LNG and UK markets, while US domestic gas supplies remain depressed due to the over-supply of gas.
In order to realise the full potential of the global gas phenomenon, the study goes on to highlight the need for certain interventions to alleviate uncertainty in the market, including new policies that promote a liquid market and competition needed for security of supply and the formation of clear price signals.
The study wants industry to focus more on portfolio allocation, risk management, and efficiency, and for consumers to better understand the benefits of natural gas and the economic and environmental benefits of diversifying energy assets.
“Already, the rapid growth in unconventional gas has significantly disrupted global trade flows,” Frei said.
“With concerns about affordability and security driving exploration into unconventional resources outside of North America, unconventional gas will continue to be a key factor in how the world energy market develops.
“In particular, continued growth in the U.S. and Australia will significantly influence the balance of supply and demand with Argentina, China and Saudi Arabia emerging as unconventional gas producers out to 2020-2025.”
Accenture energy industry group managing director Melissa Stark, who co-authored of the report, said it was clear the US shale gas supply is smooth and highly optional.
“The US LNG exports are very different from any supply we have seen before because this supply can come on-stream very quickly in response to market demand and prices,” Stark said.
“This LNG supply is driving fundamental changes and commercial innovation in the global LNG market.”
The rapid growth of unconventional gas is demonstrated by the US, which now derives half of its gas from unconventional supplies, and by 2019 will be the world’s third largest LNG exporter with 20% of the market, likely behind Qatar and Australia.
