The price is right—at least where worldwide adoption of natural gas is concerned.
Low prices are giving natural gas a helping hand in the global energy marketplace.
And the United States—the world’s largest gas consumer and producer—will account for 40 percent of the world’s additional gas production to 2022 due to the significant growth in its domestic shale gas industry, says a new report released this month by the Paris, France-based International Energy Agency (IEA).
“The US shale revolution shows no sign of running out of steam and its effects are now amplified by a second revolution of rising LNG supplies,” said Dr Fatih Birol, the IEA’s Executive Director in a news release. “Also, the rising number of LNG consuming countries, from 15 in 2005 to 39 this year, shows that LNG attracts many new customers, especially in the emerging world.”
Global gas demand is expected to grow by 1.6 percent a year for the next five years, with consumption reaching almost 4,000 billion cubic meters (bcm) by 2022, up from 3,630 bcm in 2016. China is expected to take up 40 percent of this growth. Industrial sector demand will be the primary driver of gas consumption growth, replacing power generation. While the use of natural gas by power generators is predicted to rise slightly, increased renewable sources and competition from coal will moderate that growth.
US domestic demand for gas is growing—thanks to higher consumption from the industrial sector—but more than 50 percent of production increases will be liquefied natural gas (LNG) exports. By 2022, the IEA estimates that the United States will be challenging Australia and Qatar for global leadership among LNG exporters.
US LNG exports could drive profound changes to the international gas market—diversifying supply and transforming global gas security.
The recent standoff involving Qatar, which supplies about a third of the world’s LNG, and neighboring countries, serves as a reminder of the potential risks to gas supply security. “Even in a well-supplied market, recent events remind us that gas security remains a critical issue.” said Dr Birol.
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