Gas to overtake coal as world's second largest energy source by 2030

Rodiano Bonacci
Novembre 15, 2018

As major transformations are underway for the global energy sector, energy demand is set to grow by more than 25 percent to 2040, requiring more than $2 trillion a year of investment in new energy supply, says World Energy Outlook 2018 from International Energy Agency (IEA).

The IEA has, however, this year introduced a new "Future is Electric" scenario, under which nearly half of the world's total auto fleet is electric by 2040, electricity makes "rapid inroads" into building and industry heating and digital technologies are widespread, connecting almost all consumer devices and appliances. According to the IEA, wind electricity generation in the European Union will more than triple to 1,100 TWh by 2040, pointed out WindEurope, association based in Brussels, promoting the use of wind power in Europe.

Demand will be driven by developing economies led by China and India, although this may be offset by more advanced economies reducing consumption up to 2040 due to the increasing use of renewables and implementation of other efficiencies, as well as more electric cars on the road.

IOGP executive director Gordon Ballard said: "The case for investments in exploration and production is clear: all IEA scenarios show strong future demand for oil and gas".

By 2025, the United States could account for around half the growth in oil and natural gas over the next six years.

However, global demand is not expected to peak until around 2040.

Demand for natural gas is on the rise erasing talk of a glut, as China turns into a giant consumer, it said.

The London-based International Association of Oil & Gas Producers echoed the World Energy Outlook's call for increased investment in exploration and production.

That would be less of a problem if the world followed the IEA's "sustainable development scenario", where aggressive policies targeting carbon emissions slice into demand for fossil fuels.

The agency's demand forecast to 2040 is based on the assumptions of rising incomes, an extra 1.7 billion people in the world - a lot of them in urban areas in developing economies - and a "new policies scenario" in which current efficiency and carbon reduction targets are enacted.

Now in its 21st edition, this year's conference was opened by the United Arab Emirate (UAE) president, Sheikh Khalifa Bin Zayed Al Nahyan, with the theme: "Shaping the future of the world's oil and gas industry".

Reuters reports that, according to the IEA, China would soon establish itself as the world's biggest gas importer.

That's because of the campaign to replace coal as the primary winter heating (and cooking) fuel in homes across northern China, especially in the winter heating season that starts on Thursday.

Although China is the world's third-biggest user of natural gas behind the United States and Russian Federation, it has to import about 40 percent of its needs as local production can not keep pace.

The US would account for 40% of the total growth in gas production to 2025, the IEA forecast while other sources would take over as US shale gas output plateaued and other nations turned to unconventional methods of gas production, such as hydraulic fracturing or fracking.

However, the report notes that most emissions related to energy infrastructure are "essentially locked-in", with relatively young coal-fired power plants in Asia set to contribute to global Carbon dioxide emissions for decades to come.

Total global carbon dioxide output rose 1 percent past year and the IEA expects that to reach a record high in 2018.

The agency said this growth trajectory was "far out of step" with what scientific knowledge says would be required to tackle climate change.

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