The analysis, available as a free download, finds a market in conflict: Clean energy goals are driving nations toward wider adoption of natural gas as a lower emission fuel source while technology and political factors create market uncertainty. Surging global interest in gas-to-power projects is matched with further cost declines in renewable technology and increasing deployments of utility-scale battery storage to smooth intermittency issues. The U.S.-China trade conflict, which recently included a steep tariff on U.S.-produced LNG, clouds demand projections of the world’s largest energy consumer. With reliability and responsiveness driving investment, cost-effective natural gas assets will be critical to meeting global energy needs — especially in emerging markets where demand is immense and all generation technology options are on the table. Although much of the current discussion centers on natural gas for power generation and its interplay with the upswing in renewables, natural gas demand for industrial uses and transportation is pointed up. “The moves by nations to establish clear and aggressive clean energy goals is important, with many pursuing an ‘all of the above’ strategy that will maintain natural gas’ prominence for the foreseeable future,” said Hoe Wai Cheong, president of Black & Veatch’s oil and gas business. “Where renewables are in play, natural gas is necessary to accommodate fast and reliable ramping.” “Smart investors understand that while trade disputes and geopolitical developments may change the playbook in the near term, natural gas is a highly viable play over the long term, and an important part of a balanced energy portfolio,” Cheong added. Among key issues explored in the Black & Veatch report: Opportunities in LNG: LNG production is rising as countries, eager for alternatives to coal-fired power, set ambitious clean energy targets. With heavy investments in planned LNG export facilities in the U.S., more than 80 percent of respondents to Black & Veatch’s survey said U.S. emergence as a major LNG supplier will reshape the global market over the next half decade. Capitalizing on FLNG: Early adopters of floating LNG sought to move supply to end users quickly, efficiently and economically; the 2018 successes of Golar LNG’s Hilli Episeyo and Shell’s Prelude FLNG vessels mark major milestones. FLNG sites offer an attractive, lower-risk opportunity for investors because they offer quicker speed to market, aren’t fixed to one location and have greater operational flexibility. Renewables and Natural Gas: As renewable technology prices drop and capabilities expand, power from solar, wind and other distributed energy technologies challenge natural gas in evolving power portfolios. The report explores the scenario in California, which recently passed policies requiring renewables to account for 60 percent of power generation by 2026, and 100 percent by 2045. Although the future looks promising, the scalability and financial investments required for large-scale deployments aren’t trivial. Trade Dispute: The U.S.-China trade discord is altering the conversation around LNG shipping. The tariff on U.S.-produced LNG will negatively impact the cost of transporting natural gas to Chinese customers, potentially changing the fortunes of U.S. producers counting on rising Asian demand. Pipeline Capacity: Rampant natural gas production in the hotbed Appalachian and Permian basins is raising concern that pipeline capacity can't keep up, even as the U.S. natural gas industry prepares to enter one of its strongest growth periods. Other key findings from the report: Survey respondents are more bullish on the near-term growth potential than the long term. While optimism is dominant in both windows, pessimism increases the further respondents look into the horizon – a nod to the belief that renewables will increase as prices fall and battery storage matures. Nearly two-thirds of respondents said return on investment is a major driver for making FLNG investment decisions, reflecting FLNG’s advantages over land-based rivals as it results in a shorter period from final investment decision (FID) to commercial operation. The New England market, where gas supply remains heavily constrained on peak winter days, is most in need of incremental pipeline capacity over the next five years, respondents said. The Mid-Atlantic region ranked second, with the Southeast region coming in third, marking a strong need to build additional infrastructure. Media Contact Information: CHRISTOPHER CLARK | +1 913-458-2778 P | +1 816-674-0572 M | clarkca@BV.com24-HOUR MEDIA HOTLINE | +1 866-496-9149 0 About Black & Veatch Black & Veatch is an employee-owned, global leader in building critical human infrastructure in Energy, Water, Telecommunications and Government Services. Since 1915, we have helped our clients improve the lives of people in over 100 countries through consulting, engineering, construction, operations and program management. Our revenues in 2017 were US$3.4 billion. Follow us on www.bv.com and in social media. Related Insights With Grid Modernization, Utilities Poised For Most Visible Transformation The annual Strategic Directions Report series offers analysis and insights into key issues and trends facing the smart cities and utilities, electric, natural gas, and water utility sectors. FLNG Solutions Prove To Be Much More Than Potential It was roughly a decade ago when the initial introduction of floating liquefied natural gas (FLNG) solutions sought to help bring uneconomic gas reserves offshore, such as those in remote locations, to the market. Over the past few years, however, we’ve watched as offshore FLNG capabilities have moved closer to the mainland, offering a very flexible and economical solution to operators looking to offload their supply around the world. Four Big Trends in Gas-to-Power Hold Promise for U.S. Market Major energy shifts are afoot, and the United States will play a critical role going forward. The EIA projects that by 2022, the U.S. will become a net energy exporter, according to its newly released Annual Energy Outlook 2018. For natural gas, this shift will happen even earlier, around 2020, the EIA says. Market Strives to Deliver Over Pipeline Challenges As if the persistent low-price environment wasn’t enough, rampant natural gas production in the Appalachian and Permian Basins is ramping up concern that pipeline take-away capacity can’t keep up. This comes as the United States natural gas industry prepares to enter one of its strongest growth periods to date, driven by increasing global demand for low cost natural gas supplies and growing domestic demand for cleaner energy sources. Southeast Asia’s Journey Toward a Cleaner Energy Future Strong economic growth, low gas prices and environmental goals are transforming natural gas demand in Southeast Asia.