Gas demand poised for strong mid-term rebound: IEA
Gas demand is set for a strong rebound over the next four years, reaching almost 4.3 trillion m3 in 2024, up 7% from the pre-COVID level in 2019, according to a new report by the International Energy Agency (IEA).
Around two thirds of the growth in consumption will come on the back of economic recovery, while the remainder will be the result of gas displacing coal and, to a lesser extent, oil in power generation, industry and transport, the IEA said in its latest quarterly Gas Market Report published on July 5. Around half the increase between 2020 and 2024 will come from the Asia-Pacific region.
Demand will grow by 3.6% in 2021 alone, the IEA said, before easing back to a 1.7% annual growth rate over the following three years.
The IEA recently published a Net-Zero Emissions by 2050 Scenario, which envisaged investment in oil and gas development ending beyond projects already approved, as the world pursues its "narrow but still achievable" goal of net-zero emissions within three decades. But the Paris-based agency cautioned in its new report that "despite slower growth in the coming years, gas demand by 2024 is trending higher than the trajectories in the IEA's climate-driven scenarios," including the net-zero one.
"To get on track for net-zero emissions by 2050, new measures are needed to promote further fuel substitution and efficiency gains," the IEA recommended. "This is especially the case in more mature markets, where much of the potential for switching from coal or oil to gas has already been realised."
The IEA also noted that gas demand growth would outstrip the expected 6% rise in supply between 2019 and 2024. This extra production will come nearly exclusively from large, conventional assets already under development, mainly in Russia and the Middle East, supplemented with extra US shale gas investment. Concerns about security of supply may arise towards the mid-2020s, the agency warned, unless the strong policy measures it envisages to curb demand are brought into force.