Demand for natural gas, which is increasingly fueling electricity generation in the U.S. and now worldwide, grew by 4.6 percent last year, its fastest pace since 2010, according to the International Energy Agency’s latest annual report.
Natural gas fits a lot of needs for power generators, considering its more economical and produces only half of the carbon emissions of coal. Record production in the U.S., primarily through horizontal drilling operations in shale plays, is pushing that nation to become a net exporter of energy via shipping of liquified natural gas.
Global demand is expected to reach more than 4.3 trillion cubic meters in 2024. The U.S. Energy Information Administration last month forecast domestic dry gas production will average 90.3 billion cubic feet per day.
“Natural gas helped to reduce air pollution and limit the rise in energy-related CO2 emissions by displacing coal and oil in power generation, heating and industrial uses,” said Dr Fatih Birol, the IEA’s Executive Director. “Natural gas can contribute to a cleaner global energy system. But it faces its own challenges, including remaining price competitive in emerging markets and reducing methane emissions along the natural gas supply chain.”
The IEA report indicates that global demand for natural gas is going to continuing growing at least five more years. Asian nations will raise their consumption to fuel fast-rising economies.
China is expected to account for more than 40 percent of global gas demand growth to 2024, propelled by the government’s goal of improving air quality by shifting away from coal. Chinese natural gas consumption grew 18 percent in 2018 but is expected to slow to an average annual rate of 8 percent to 2024 as a result of slower economic growth.
The IEA also sees strong growth in gas consumption by other Asian countries, particularly in suth Asia. In Bangladesh, India and Pakistan, the industrial sector is the main contributor to growth, especially for fertilisers to meet the needs of growing populations.
Industrial use of natural gas, both as a fuel and a feedstock, is set to expand at an average annual rate of 3 percent and account for almost half of the rise in global consumption to 2024. Power generation remains the largest consumer of natural gas, in spite of slower growth due to strong competition from renewables and coal.
Supplies to meet growing global demand for natural gas will come from both new domestic production in fast-growing economies but also increasingly from major exporting countries, led by the development of abundant shale gas resources in the United States.
Utilities in Europe and Indonesia have already signed deals to receive U.S. LNG shipments. Natural gas currently fuels about 33 percent of the U.S. electricity generation mix, compared to about 30 percent for coal and 20 percent for nuclear.