IGU stresses key role of nat­u­ral gas in world’s sus­tain­able en­ergy fu­ture

In­ter­na­tional Gas Union wel­comes IEA’s out­look, demon­strat­ing vi­tal eco­nomic and en­vi­ron­men­tal role nat­u­ral gas will play in a sus­tain­able en­ergy fu­ture

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The In­ter­na­tional Gas Union (IGU) has wel­comed anal­y­sis in the In­ter­na­tional En­ergy Agency’s lat­est World En­ergy Out­look (WEO), demon­strat­ing the vi­tal eco­nomic and en­vi­ron­men­tal role nat­u­ral gas will play in a sus­tain­able en­ergy fu­ture.

In this year’s Stated Poli­cies Sce­nario (STEPS), the share of nat­u­ral gas in global pri­mary en­ergy de­mand ex­pands to about 25% by 2040. Gas will also re­tain a crit­i­cal role in the Sus­tain­able De­vel­op­ment Sce­nario (SDS), re­tain­ing the 23% share in en­ergy in two decades’ time that it held last year.

The WEO also states that “There is a ro­bust long-term case for gases in the en­ergy sys­tem. In the SDS, there are ser­vices that gases pro­vide that it would be dif­fi­cult to pro­vide cost ef­fec­tively us­ing other sources. These in­clude high tem­per­a­ture heat for in­dus­try, win­ter heat for build­ings and sea­sonal flex­i­bil­ity for power sys­tems.”

Fur­ther­more, “gas in­fra­struc­ture is a valu­able as­set that can be re­pur­posed over time to de­liver large vol­umes of bio-meth­ane or, with mod­i­fi­ca­tions, low-car­bon hy­dro­gen.”

IGU Pres­i­dent, Pro­fes­sor Dr Joe M Kang, said the re­port again con­firms the crit­i­cal role gas will play in the global en­ergy tran­si­tion.

“Nat­u­ral gas is a clean and ver­sa­tile en­ergy source that un­locks an op­por­tu­nity for the planet to re­li­ably meet the glob­ally grow­ing en­ergy de­mand, re­duc­ing GHG emis­sions and ur­ban pol­lu­tion and al­low­ing economies to grow,” Kang said.

“Gas de­mand has fared bet­ter than oil and coal amid the con­tin­u­ing fall­out from the Covid-19 pan­demic. The WEO recog­nises that with­out struc­tural changes in the way en­ergy is pro­duced and con­sumed and pru­dent pol­icy choices, the emis­sions re­duc­tions seen this year will be short-lived. The gas in­dus­try has a crit­i­cal role to play.

“Switch­ing to gas from dirt­ier fu­els, like coal, oil, or con­ven­tional biomass is pos­si­ble now and can be achieved quickly, with im­me­di­ate ben­e­fits of cleaner air, safer en­vi­ron­ment, cut emis­sions, and solid path to the in­te­gra­tion of clean tech­nolo­gies for con­tin­ued re­duc­tions in emis­sions.”

Fur­ther find­ings and pro­jec­tions re­lat­ing to the nat­u­ral gas mar­ket in the WEO in­clude:

Nat­u­ral gas de­mand will de­cline by only 3% in 2020 as a re­sult of the Covid-19 pan­demic, prov­ing more re­silient than oil and coal, which will see an­nual falls in con­sump­tion of 8% and 7% re­spec­tively. Less gas use in com­mer­cial and pub­lic build­ings has been off­set by in­creased res­i­den­tial con­sump­tion, while the de­cline in in­dus­trial de­mand was mit­i­gated by fuel switch­ing.

In STEPS, global gas de­mand will ex­pand by 15% by 2030 from the 2019 level, and by 30% by 2040. This growth will be driven by gains in south and east Asia, sup­ported by com­pet­i­tive prices, a push to im­prove air qual­ity and man­u­fac­tur­ing growth.

Even in a ‘de­layed re­cov­ery sce­nario’, gas de­mand re­cov­ers to the pre-pan­demic level in 2024, and climbs 24% by 2040.

Sig­nif­i­cant in­vest­ment in new gas in­fra­struc­ture will also be key, with the IEA pre­dict­ing that $70bn will be needed an­nu­ally.

While China and In­dia will ac­count for around 45% of the de­mand in­crease over the next decade, growth will also be ro­bust in South­east Asia and the Mid­dle East.

In car­bon-in­ten­sive economies, gas use can re­duce emis­sions by re­plac­ing coal. In coun­tries plan­ning a path­way to net­zero emis­sions, the gas in­dus­try will need to demon­strate progress in meth­ane abate­ment, via al­ter­na­tive gases such as biomethane and low-car­bon hy­dro­gen, and tech­nolo­gies like car­bon cap­ture, util­i­sa­tion and stor­age.

An LNG tanker is seen at the new liq­ue­fied nat­u­ral gas ter­mi­nal owned by Chi­nese en­ergy com­pany ENN Group, in Zhoushan, Zhe­jiang prov­ince, China (file). While China and In­dia will ac­count for around 45% of the gas de­mand in­crease over the next decade, growth will also be ro­bust in South­east Asia and the Mid­dle East, ac­cord­ing to the WEO.

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