World set to get more gassy despite momentum in energy transition
Nearly every major region is boosting investment in the infrastructure needed to increase the use of natural gas in power generation, despite global efforts to transition energy systems away from fossil fuels.
Globally, more than $720bn is to be spent on gas pipelines under construction or planned, and an additional $190bn is to be put on facilities to handle liquefied natural gas (LNG) imports, according to Global Energy Monitor (GEM).
The investment sums involved — which have been committed to projects that are under way or are planned for the near future — reveal the powerful momentum that remains in traditional fossil fuel industries even as clean energy supplies are deployed at an accelerating rate.
Once completed, the pipelines and LNG import terminals will extend the use of natural gas for years to come, and guarantee that fossil fuels will retain a critical role in key power systems well beyond 2030.
The geographic spread of natural gas pipelines is now heavily concentrated in North America and Europe, which account for more than 60% of the global pipeline network. But the planned capital expenditure on future pipelines has a more global reach.
Six regions each have a share of 10% or more of the global expenditure total on gas pipelines already in construction or planned soon: North America, East Asia, South Asia, Sub-Saharan Africa, Eastern Europe and Latin America, GEM data shows.
North America tops the list in terms of expenditure on current or planned projects at $106.4bn. East Asia, which includes China, Japan, South Korea and Taiwan, comes in a close second with roughly $102bn.
South Asia, Sub-Saharan Africa and Eastern Europe each plan to spend more than $70bn on gas pipelines, signifying substantial commitments to expanding natural gas use across several key economies.
North America’s current gas pipeline network is by far the largest, extending more than 400,000km. However, the continent ranks only sixth in terms of planned pipelines, with just more than 11,000km of pipeline under construction or planned.
That means North America’s network will grow less than 3% once current and planned construction are completed.
In contrast, East Asia’s pipeline network will jump more than 50% once 68,000km of planned pipeline are built. Upon completion of the projects under way, East Asia’s gas pipeline network will be close to 200,000km, and it will be the second-largest region for gas pipelines after North America.
Such a widening in East Asia’s gas network should lead to a sharp increase in gas users
— ranging from households to factories to industrial plants — that have switched from burning other forms of energy.
South Asia and Sub-Saharan Africa are set to see even steeper increases in gas pipeline network length once current projects are completed, growing 88% and 282% respectively.
Power providers that currently supply consumers with a range of energy sources can potentially cut back on coal-fired supplies in favour of cleaner-burning gas as the pipeline networks expand, thereby aiding in pollution reduction efforts.
But given the high expense of developing and expanding pipeline networks, power producers are also likely to commit to the use of those pipelines for several years before turning away from fossil fuel use altogether.
The building out of the global network of LNG import terminals is another clear sign of the widespread commitment to boosting natural gas use in power generation.
Asian nations already account for the lion’s share of LNG imports, and are also the top investors in new capacity, accounting for 74% of total planned capex on new LNG import terminals, according to GEM. China and India alone account for $109bn of the $190bn planned globally.
Germany, Taiwan, Brazil, Italy, the Philippines and Vietnam, however, all plan to spend more than $4bn each on LNG terminals, and an additional 12 nations are on the hook for more than $1bn each according to current development plans.
Combined with the lengthening pipeline networks, these LNG import terminals signify an enduring commitment to the use of gas in power generation for the foreseeable future, even if power firms continue to roll out renewable energy supplies at the same time.