Global Energy & CO2 Status Report

The latest trends in energy and emissions in 2017

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Latest trends in natural gas

Global natural gas demand grew by 3%, thanks in large part to abundant and relatively low-cost supplies. China alone accounted for almost 30% of global growth. In the past decade, half of global gas demand growth came from the power sector; last year, however, over 80% of the rise came from industry and buildings.


	Power generation	Industry, buildings, transport, oil and gas own use
2000-2016	36.7	34.3
2017	17.6	101.1
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Natural gas demand grew by 3% in 2017 thanks to abundant and relatively low-cost supplies, as well as fuel switching in key economies, significantly above the average growth of 1.5% of the last five years. China alone accounted for nearly 30% of global growth – with more than 30 bcm out of a total of nearly 120 bcm. This signals a structural shift in the Chinese economy away from energy-intensive industrial sectors as well as a move towards cleaner energy sources, with both trends benefiting natural gas.

As part of the official policy drive to “make China’s skies blue again,” there has been a strong push to phase out the practice of burning coal in industrial boilers (especially those in and around major cities) as well as reduce coal use for residential heating. China’s surging gas demand means that it absorbed much of the slack in LNG markets, pushing up international spot prices for gas in the latter part of the year.

The European Union also saw strong growth in gas demand (continuing the trend from 2016), with consumption up around 16 bcm in 2017. Some of this increase was weather-related, for instance due to a poor year for hydropower. Demand from industry also reportedly picked up on the back of stronger economic activity. Gas consumption in the European Union is still more than 10% below the peak seen in 2010. Gas imports were near historical highs as domestic production tapered off, notably in The Netherlands

In the United States, gas-fired generation in 2017 fell by 8%, or 110 TWh, offsetting half of the increase in gas demand for electricity generation elsewhere. The case of the United States last year highlights the importance of relative prices in determining emissions intensity trends in the power sector: a slight rise in the natural gas price in 2017 saw gas-fired generation squeezed by both renewables and coal.

The composition of gas demand growth is changing. In the past decade, half of global gas demand growth came from the power sector. In 2017, over 80% of the growth came instead from industry and buildings. The power sector remains the largest single component of global demand, but this share is likely to decline gradually.