The golden age of gas: natural gas alone accounted for nearly one-third through the last decade, more than any other energy source, contributing to lower emissions, economic prosperity, better energy access and greater electricity supply security.
Global gas demand expanded by almost 20% since 2014, or around 650 bcm in absolute terms – this is almost the double of the current EU’s gas demand.
This strong growth was largely supported by three key regions, with Asia, North America and the Middle East accounting for over 95% of demand growth over the last decade.
In Asia, strong economic expansion combined with clean air policies and support for coal-to-gas switching drove-up natural gas demand by more than 35% in the last ten years, with growth primarily driven by China.
In North America the shale gas revolution unleashed the region’s tremendous energy potential. US gas production surged by more than 45%, practically halved natural gas prices and led to an unprecedented coal-to-gas switching in the power sector, all driven by pure economics and the competitiveness of natural gas. while the region’s gas demand expanded by more than 25% it became also the world’s largest LNG exporter.
In the Middle East, the region’s growing population, together with continued oil-to-gas switching in the power sector and investments in gas-intensive industries supported a strong increase in gas demand, up by one-third compared to 2014.
From a sectoral point of view, gas-fired powgen was the most important driver behind soaring gas demand, accounting for around 42% of global gas demand growth – with a huge part of this supported by switching away from coal and oil products.
Industry emerged as the second most important driver, primarily due to the growing gas needs in chemicals and fertilisers, further solidifying the role of natural gas as a guarantor of food supply security.
So what is next for gas? The upcoming LNG wave is set to an unleash more gas demand including in price sensitive markets and will support more coal-to-gas switching, including in the coal reliant markets of Asia.
And in many markets, gas will play a key role in enabling better energy access, including in Africa.
It seems, we are just at the beginning of the golden age of gas, with more golden decades to come.
What is your view? How will gas demand evolve in the coming years? What will be the impact of the LNG wave?
Source: Greg MOLNAR
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