Natural gas ‘to overtake coal by 2030’

Demand ‘to rise by 1.6% a year to 2040’

LONDON/SINGAPORE: Natural gas is expected to overtake coal as the world’s second-largest energy source after oil by 2030 due to a drive to cut air pollution and the rise in liquefied natural gas (LNG) use, according to the International Energy Agency (IEA).

The Paris-based IEA said in its World Energy Outlook 2018 published yesterday that energy demand would grow by more than a quarter between 2017 and 2040 assuming more efficient use of energy — but would rise by twice that much without such improvements.

Global gas demand would increase by 1.6% a year to 2040 and would be 45% higher by then than today, it said.

The estimates are based on the IEA’s “New Policies Scenario” that takes into account legislation and policies to reduce emissions and fight climate change. They also assume more energy efficiencies in fuel use, buildings and other factors.

“Natural gas is the fastest growing fossil fuel in the New Policies Scenario, overtaking coal by 2030 to become the secondlargest source of energy after oil,” the report said.

China, already the world’s biggest oil and coal importer, would soon become the largest importer of gas and net imports would approach the level of the European Union by 2040, the IEA said.

According to Reuters calculations, based on China’s General Administration of Customs data, China has already overtaken Japan as the world’s top natural gas importer.

China’s total natural gas imports over January to October this year via pipeline and as LNG were at 72.06 million tonnes, up a third from the same period last year.

Japan, on the other hand, imported about 69.35 tonnes of LNG over that period, according to ship-tracking data from Refinitiv Eikon, down 17% for the same 10 months of 2017.

“China still lags behind Japan on LNG imports but could overtake its North Asia neigh bo ur in the early 2020s,’’ said Edmund Siau, gas analyst with energy consultancy FGE.

Emerging economies in Asia would account for about half of total global gas demand growth and their share of LNG imports would double to 60% by 2040, the IEA report said.

“Although talk of a global gas market similar to that of oil is premature, LNG trade has expanded substantially in volume since 2010 and has reached previously isolated markets,” it said.

The United States would account for 40% of total gas production growth to 2025, the IEA said, while other sources would take over as US shale gas output flattened and other nations started turning to unconventional methods of gas production, such as hydraulic fracturing or fracking.

“Global electricity demand will grow 2.1% a year, mostly driven by rising use in developing economies. Electricity will account for a quarter of energy used by end users such as consumers and industry by 2040,’’ it said.

Coal and renewables will swap their positions in the power generation mix. The share of coal is forecast to fall from about 40% today to a quarter in 2040 while renewables would grow to just over 40% from a quarter now.

However, the world’s coal plants make up one third of energy-related carbon dioxide (CO2) emissions today. Many of those are in Asia, where average coal plants are on average 11 years old with decades left to operate, compared with an average age of 40 years in the United States and Europe.

Energy-related CO2 emissions could reach a record high this year, the IEA said.