Global gas group warns of rising demand, looming shortage
The International Gas Union (IGU), which represents more than 150 members in over 80 countries covering more than 90% of the global gas market, said August 27 rising demand and underinvestment could lead to a 22% global supply shortfall by 2030.
In its Global Gas Report 2024 (GGR2024), released at the ONS Conference in Stavanger, Norway, the IGU, Italy’s Snam and knowledge partner Rystad Energy said global gas markets will remain in a “fragile equilibrium” with limited supply growth and steadily rising demand, which rose by 1.5% in 2023 and is expected to accelerate to 2.1% by the end of 2024.
Asia continues to be the key engine for demand growth, the IGU said, while North America and the Middle East lead on exports of both LNG and piped natural gas.
However, if demand continues to grow on the pace set over the last four years, it says, global supply is expected to fall short of demand by 22% by 2030. If demand growth accelerates, the shortfall will be more pronounced, the report says, underscoring the urgent need to scale up investments.
“Strong demand growth for gas underpins its crucial role in reducing global emissions, providing flexibility and resilience, enabling efficient, affordable, sustainable development, and supporting greater adoption of critical clean energy technologies, including the scaling up of renewables,” IGU President Madame Li Yalan says in a foreword to GGR2024. “However, the investment in natural gas and low-CO2 gaseous energy technologies is falling short of demand growth, which must be reversed.”
Energy demand has continued to rise in both developed and developing region, the IGU says, while coal burning reached record growth levels in 2023 and cemented its place as the largest source of global energy emissions, which also reached record levels in 2023.
“As 2023 became another record emissions and coal use year, it is important to highlight that shifting from coal to natural gas is a readily available, cost-effective, and affordable way to cut emissions by around 50% immediately,” GGR2024 says. “It is crucial to emphasise that this step should be taken alongside, not instead of, ongoing efforts to expand renewable energy, enhance efficiency, and scale up all emission-free energy sources that are technologically and economically viable.”
If current demand and supply trends persist, the IGU says, policy-driven decarbonisation scenarios targeting significant emissions reductions by 2030 and carbon neutrality by 2050 will most likely be missed.
Recent trends – the spread of energy-intensive data centres and increased cooling demand, among others – alongside growing electrification demands are causing an unexpected surge in power and overall energy demand, GGR2024 notes. This demand growth is challenging assumptions made about the energy transition by institutions such as the International Energy Agency and the Institute of Energy Economics, Japan, whose 2030 targets already seem unattainable.
“If energy use continues to evolve as it has in recent years, actual demand will significantly diverge from scenario pathways, potentially leading to a significant gap between demand and planned supply of gas and low-CO2 energy,” the report says. “Living in an era of high energy uncertainty has profound implications for investment decisions, energy infrastructure development and technology planning, and reconciling scenarios with forecasts is necessary to inform prudent policy.”