Gas Demand to Grow by Third by 2040: IEA
Demand for natural gas is poised to grow by a third by 2040, under a scenario that incorporates existing energy policies and targets, the International Energy Agency (IEA) has projected in its latest World Energy Outlook.
Gas enjoyed a “remarkable” year in 2018, the Paris-based policy adviser said, with consumption rising 4.6% to more than 4 trillion m3. The IEA’s stated policies scenario sees it expanding to almost 4.7 trillion m3 in 2030 and 5.36 trillion m3 in 2040.
The Asia-Pacific region will replace North America as the largest gas consumer by 2030, with demand increasing from 815bn m3 last year to 1.218 trillion m3 by the end of the next decade and 1.522 trillion m3 in 2040. North American consumption will continue to grow but a much slower pace, from 1.067 trillion m3 last year to 1.183 trillion m3 in 2030 and 1.221 trillion m3 in 2040.
African demand will more than double to 317bn m3 by 2040, and significant growth will also be seen in Eurasia, the Middle East and South America, according to the IEA. The only region to see consumption shrink will be Europe, from 617bn m3 in 2018 to 593bn m3 in 2030 and 557bn m3 in 2040.
LNG will replace pipeline gas as the primary means of trading gas by the late 2020s, driven by rising Asian LNG imports. LNG supplies will struggle to gain a foothold in developing markets, however, because of their high cost versus domestic supply. Between now and 2040, the IEA expects 430bn m3 of new liquefaction capacity to be developed at a cost of more than $300bn, with 80% of this capacity being built in just six countries – Australia, Canada, Mozambique, Qatar, Russia and the US.
Oil demand will not begin levelling off before 2040, the IEA said, growing at a robust annual rate of 1mn b/day until 2025, from 97mn b/day last year. Growth will then slow to 0.1mn b/day each year on average in the 2030s, reaching a peak of 106mn b/day in 2040.
“There is a material slowdown after 2025, but this does not lead to a definitive peak in oil use,” the IEA said, pointing to rising consumption from trucks, and the shipping, aviation and petrochemicals sectors.
Oil consumption in the passenger car segment should hit a max out sooner, in the late 2020s, as drivers switch to electric cars. More than 30mn electric cars will be sold each year between now and 2040, the IEA projected, with 330mn of them expected on the road by 2040, replacing around 4mn b/day of oil consumption.
Coal use will be largely flat, with consumption dropping by less than 1% to just under 5,400 megatons of coal equivalent by 2040. Demand in the Asia-Pacific zone, by far the largest user of coal, will grow, more than offsetting declines elsewhere in the world.
Primary energy demand will rise by a quarter by 2040, with gas covering around 35% of this extra consumption and renewables around half.
Gas will replace coal as the main source of electricity in 2026, with installed capacity rising to 2,101 GW from 1,745 GW last year. Gas-fired capacity will continue expanding, reaching 2,651 GW by 2040, but will be displaced as the top electricity source by solar in 2035. Solar capacity will total 3,142 GW in 2040, versus 495 GW in 2018. Wind will also see a rapid expansion in use, with capacity increasing to 1,856 GW in 2040 from 566 GW in 2018.
A peak in energy-related carbon dioxide emissions in not expected before 2040, as a result of economic growth and a rise in population.