The outlook for natural gas consumption growth is stronger than for any other major fossil fuel, according to the IEA. This is partly the case because natural gas is the most resilient to potential climate change regulations.
Gas wins out across the spectrum of potential regulatory and demand scenarios, whereas oil’s demand could be seriously curtailed:
Global gas demand may surge as much as 44 per cent to 2035 over 2008 levels, reaching 4.5 trillion cubic meters a year (435 billion cubic feet a day) as China’s use grows an average 6 per cent a year annually, the adviser to developed nations said in its World Energy Outlook 2010, published on Tuesday.
“China could lead us into a golden age for gas,” the IEA said. “Demand in the Middle East increases almost as much.” Gas demand will return to growth this year after dropping in 2009 in the wake of the economic crisis and global oversupply, the Paris-based IEA said. Gas is the only fossil fuel for which demand in 2035 is higher than in 2008 across all of the IEA’s three assumptions for climate legislation.
A “gas glut” in supply capacity will exceed 200 billion cubic meters next year, from 130 billion this year, the IEA said, before starting “a hesitant decline.” The agency defines the glut as the capacity of inter-regional pipelines and LNG export plants minus the volume of gas actually traded.
Thus gas has a bright long-term future, but just beware the potential for near-term excess supply.