Fuel report
Gas 2020
Analysing the impact of the Covid-19 pandemic on global natural gas markets
Gas
Natural gas is the cleanest burning and fastest growing fossil fuel, contributing for almost one-third of total energy demand growth through the last decade, more than any other fuel.
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Natural gas is the fastest growing fossil fuel, accounting today for 23% of global primary energy demand and nearly a quarter of electricity generation.
Being the cleanest burning fossil fuel, natural gas provides a number of environmental benefits compared to other fossil fuels, particularly in terms of air quality and greenhouse gas emissions.
Its storability and the operational flexibility of gas-fired power plants, allows natural gas to respond to both seasonal and short-term demand fluctuations and to enhance electricity supply security in power systems with a growing share of variable renewables.
The natural gas market is becoming increasingly globalised, driven by the availability of shale gas and the rising supplies of flexible liquefied natural gas. As gas trade increases, so does the interconnectivity of gas markets, creating new facets and dimensions of natural gas security, as a demand or supply shock in one region may now have repercussions in others.
Being the cleanest burning fossil fuel, natural gas provides a number of environmental benefits compared to other fossil fuels, particularly in terms of air quality and greenhouse gas emissions.
Its storability and the operational flexibility of gas-fired power plants, allows natural gas to respond to both seasonal and short-term demand fluctuations and to enhance electricity supply security in power systems with a growing share of variable renewables.
The natural gas market is becoming increasingly globalised, driven by the availability of shale gas and the rising supplies of flexible liquefied natural gas. As gas trade increases, so does the interconnectivity of gas markets, creating new facets and dimensions of natural gas security, as a demand or supply shock in one region may now have repercussions in others.
Last updated Sep 16, 2020
Key findings
Year-on-year impact of lockdowns (from first day to April 15) on natural gas consumption per sector for a selection of European countries and the United States
OpenNatural gas demand has fallen in 2020
Natural gas consumption was already falling over the first months of 2020 in major markets even before the Covid-19 pandemic, mainly due to historically mild temperatures in the northern hemisphere. Supply did not adjust to this drop in consumption, resulting in a considerable build-up of gas in storage. Demand is projected to decrease in 2020, with most of the declines in power generation.
Gas demand by region and scenario, 2018-2040
OpenNatural gas had a remarkable year in 2018
Natural gas had a remarkable year in 2018, with a 4.6% increase in consumption accounting for nearly half of the increase in global energy demand. Since 2010, 80% of growth has been concentrated in three key regions: the United States, where the shale gas revolution is in full swing; China, where economic expansion and air quality concerns have underpinned rapid growth; and the Middle East, where gas is a gateway to economic diversification from oil. Natural gas continues to outperform coal or oil in both the Stated Policies Scenario (where gas demand grows by over a third) and the Sustainable Development Scenario (where gas demand grows modestly to 2030 before reverting to present levels by 2040).
Flaring by region in the Sustainable Development Scenario, 1985-2030
OpenFlaring emissions must drop rapidly to get on track with the IEA's Sustainable Development Scenario
Around 145 bcm of natural gas were flared in 2018, a slight increase from levels in previous years and broadly equal to gas demand across the continent of Africa. This resulted in emissions of roughly 275 MtCO2, as well as some methane emissions (from uncombusted portions of flares) and other GHGs such as black carbon and nitrogen oxide. Russia, Iraq, Iran, Algeria and the United States were responsible for more than half of global flaring. Several field trials have demonstrated viable technologies to reduce flaring, but at root the issue of flaring is also a question of business models. If there is inadequate provision for productive use of the gas at the project planning stage, including the necessary gas infrastructure, then finding a technology fix later on is much more difficult. There is an increasing number of voluntary government and industry commitments to eliminate flaring by 2030. The SDS relies on a rapid reduction in flaring, with government policies and industry commitment all but eliminating it by 2025.
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