Released July 07, 2021 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Global demand for natural gas in 2021 is expected to return to pre-pandemic levels, and modest increases are forecast for the 2022-2024 period, according to a new report from the International Energy Agency (IEA) (Paris, France). Many sectors of the economy, including gas production, would welcome this rebound. But increased gas use is worrisome to the IEA because it contributes to global warming, so the agency recommends redoubling efforts to find substitutes, increase efficiencies and enact policy measures to guide future investment.
In Gas 2021: Analysis and Forecast to 2024, released July 5, the IEA documented that global natural gas demand dropped 1.9%, or roughly 75 billion cubic meters (bcm), which is approximately 2.6 trillion cubic feet (Tcf), in 2020, driven by pandemic-related lockdowns and an exceptionally mild winter in the Northern Hemisphere. But global demand is expected to rise about 3.6% this year, slightly exceeding pre-pandemic levels. The IEA forecasts global gas use will rise about 2.2% per year over the 2022-2024 period, to about 4,300 bcm (or roughly 151.9 Tcf) in 2024, about 7% more than pre-pandemic demand, "unless major policy changes to curb global gas consumption are introduced."
Click on the image at right to see global natural gas demand by region, from 2008 to 2020, and with a forecast to 2024.
It wasn't that long ago that gas was heralded as the cleaner-burning "bridge" fuel, at least in the U.S. Although natural gas emits about half the carbon dioxide (CO2) of coal when it is combusted to generate electricity, there has been increased concern about natural gas use recently because of the methane emissions that are released during the extraction, processing and transportation of gas. Methane has a much greater effect on global warming over a shorter timeframe than CO2.
Almost half of the increase in gas demand to 2024 is expected to come from the Asia Pacific region, driven by China and India, as well as by emerging markets in South and Southeast Asia, the agency said. The industrial sector plays a pivotal role in medium-term gas demand growth, accounting for about 40% of the total increase between 2020 and 2024 in the IEA's forecast. This includes the use of gas for industrial processes and as a feedstock for chemicals and fertilizers.
Click on the image at right to see IEA's projection of gas demand growth 2020-2024, broken out by year, sector and region.
Strong economic growth this year and next will drive increased worldwide demand for gas, the IEA said. Global gross domestic product (GDP) is expected to rise 6% this year, with North America and Asia leading the charge. One other factor supports increased gas use: low prices. The IEA forecast flat prices for gas at the Henry Hub in Louisiana through 2024, and declining prices for Asian spot liquefied natural gas (LNG) and the Dutch TTF futures market over that same period.
Click on the image at right to see the IEA's forecast of GDP growth, by region, over the 2020-2024 period, and the price of natural gas in several markets.
Over the 2020-2024 period, the Gas 2021 report collects expected demand change into several buckets, including: economic activity; switching to gas; switching from gas; and efficiency measures that lower gas demand. Over that period, worldwide gas use is projected to rise from slightly more than 3,900 bcm (roughly 137.7 Tcf) in 2020 to slightly less than 4,300 bcm (or approximately 151.9 Tcf) in 2024.
Click the image at right to see the IEA's projection of different drivers that are expected to increase, or decrease, global gas use between 2020 and 2024.
Unfortunately, global gas demand approaching 4,300 bcm in 2024 puts the world on the wrong side of where it needs to be if it wants to achieve net-zero emissions by 2050, IEA noted. The agency's net-zero by 2050 scenario, outlined in a report issued two months ago, calls for lowering gas use to about 3,700 bcm by 2030 in order to achieve a global net-zero emissions economy by 2050. For more on the IEA's net-zero report, see May 24, 2021, article - IIR Energy Analysts Question Feasibility of IEA Roadmap to Net-Zero Emissions.
Click on the image at right to see how recent and projected rise is global gas use puts the world on the wrong path when it comes to achieving a net-zero emissions economy by 2050.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
In Gas 2021: Analysis and Forecast to 2024, released July 5, the IEA documented that global natural gas demand dropped 1.9%, or roughly 75 billion cubic meters (bcm), which is approximately 2.6 trillion cubic feet (Tcf), in 2020, driven by pandemic-related lockdowns and an exceptionally mild winter in the Northern Hemisphere. But global demand is expected to rise about 3.6% this year, slightly exceeding pre-pandemic levels. The IEA forecasts global gas use will rise about 2.2% per year over the 2022-2024 period, to about 4,300 bcm (or roughly 151.9 Tcf) in 2024, about 7% more than pre-pandemic demand, "unless major policy changes to curb global gas consumption are introduced."
Click on the image at right to see global natural gas demand by region, from 2008 to 2020, and with a forecast to 2024. It wasn't that long ago that gas was heralded as the cleaner-burning "bridge" fuel, at least in the U.S. Although natural gas emits about half the carbon dioxide (CO2) of coal when it is combusted to generate electricity, there has been increased concern about natural gas use recently because of the methane emissions that are released during the extraction, processing and transportation of gas. Methane has a much greater effect on global warming over a shorter timeframe than CO2.
Almost half of the increase in gas demand to 2024 is expected to come from the Asia Pacific region, driven by China and India, as well as by emerging markets in South and Southeast Asia, the agency said. The industrial sector plays a pivotal role in medium-term gas demand growth, accounting for about 40% of the total increase between 2020 and 2024 in the IEA's forecast. This includes the use of gas for industrial processes and as a feedstock for chemicals and fertilizers.
Click on the image at right to see IEA's projection of gas demand growth 2020-2024, broken out by year, sector and region.Strong economic growth this year and next will drive increased worldwide demand for gas, the IEA said. Global gross domestic product (GDP) is expected to rise 6% this year, with North America and Asia leading the charge. One other factor supports increased gas use: low prices. The IEA forecast flat prices for gas at the Henry Hub in Louisiana through 2024, and declining prices for Asian spot liquefied natural gas (LNG) and the Dutch TTF futures market over that same period.
Click on the image at right to see the IEA's forecast of GDP growth, by region, over the 2020-2024 period, and the price of natural gas in several markets. Over the 2020-2024 period, the Gas 2021 report collects expected demand change into several buckets, including: economic activity; switching to gas; switching from gas; and efficiency measures that lower gas demand. Over that period, worldwide gas use is projected to rise from slightly more than 3,900 bcm (roughly 137.7 Tcf) in 2020 to slightly less than 4,300 bcm (or approximately 151.9 Tcf) in 2024.
Click the image at right to see the IEA's projection of different drivers that are expected to increase, or decrease, global gas use between 2020 and 2024. Unfortunately, global gas demand approaching 4,300 bcm in 2024 puts the world on the wrong side of where it needs to be if it wants to achieve net-zero emissions by 2050, IEA noted. The agency's net-zero by 2050 scenario, outlined in a report issued two months ago, calls for lowering gas use to about 3,700 bcm by 2030 in order to achieve a global net-zero emissions economy by 2050. For more on the IEA's net-zero report, see May 24, 2021, article - IIR Energy Analysts Question Feasibility of IEA Roadmap to Net-Zero Emissions.
Click on the image at right to see how recent and projected rise is global gas use puts the world on the wrong path when it comes to achieving a net-zero emissions economy by 2050. Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
