UAE Energy Forum: Shale Gas Is Not A Threat

The demand for electricity in the UAE, which is almost exclusively generated from natural gas-fired power plants, is set to rise at a rate of about 9 percent per year through 2020. Rising gas demand from power stations and industrial users such as petrochemical makers and steel manufacturers has turned the UAE into a net gas importer in the past decade, triggering multi-billion dollar investments into nuclear power and renewable.

“UAE needs creative, efficient, green ways to generate electricity as Dubai prepares for Expo2020,” Al-Neyadi added.

Al-Neyadi also said that the production of shale gas has helped to fulfill part of the growing demand of natural gas, especially in the United States and Canada; adding that the shale revolution in North America has led to a rapid increase in gas production and helped keep a lid on gas price growth, which in turn has provided a boost to industries such as chemicals that use natural gas as a feedstock. Shale gas production in the United States is rising rapidly and, according to the U.S. Energy Information Administration’s Annual Energy Outlook 2014, will jump 56 percent between 2012 and 2040 to 37.6 trillion cubic feet (Tcf).

The UAE’s top energy official rejected the view that shale would be a game-changer beyond the United States, saying “the rise in the cost of production of shale oil and the environmental effects associated with it show that the production procedure may face significant challenges or be on a smaller scale, thus disqualifying it from competing with conventional oil production,” he said.

Commenting on the impact of shale gas revolution, Al-Neyadi said that it will have a positive effect in balancing the traditional gas market.

“The demand for gas is increasing and the competition between the different energy sources, including renewable or clean energy, offers multiple choices to these countries to choose from.”

Shale oil would also not compete with conventional oil and thus would not lower oil prices, said Al Niyadi in his speech on behalf of Al Mazrouei.


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