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, now accounting for about a quarter of global electricity generation. But its longer-term use is uncertain in a transition to net zero energy systems.
Read more
While burning natural gas does emit greenhouse gases, it contributes far less CO2 and air pollutants than many of the fuels it is increasingly replacing, especially coal. Natural gas use grew rapidly this past decade, accounting for almost one-third of total energy demand growth, more than any other fossil fuel. Its use in coming years is expected to keep growing strongly in all the scenarios studied by the IEA, with sharp divergences afterwards.
Its storability, its ability to be delivered through pipelines or liquefied and sent by ship, as well as the ability of gas-fired power plants to turn on and off quickly, allows natural gas to respond to both seasonal and short-term demand fluctuations and to provide back-up to the growing use of variable renewables such as wind and power. Still, as part of global efforts to reach net zero emissions, natural gas use is expected to come under pressure in some countries.
The natural gas market is increasingly globalised, driven by the availability of shale gas and rising supplies of tradeable liquefied natural gas. The growth of the gas trade, as well as a shift away from long-term contracts towards spot pricing in many markets, has created greater interconnectivity between markets with demand or supply shocks in one region now having global implications, on both gas and electricity prices.
Its storability, its ability to be delivered through pipelines or liquefied and sent by ship, as well as the ability of gas-fired power plants to turn on and off quickly, allows natural gas to respond to both seasonal and short-term demand fluctuations and to provide back-up to the growing use of variable renewables such as wind and power. Still, as part of global efforts to reach net zero emissions, natural gas use is expected to come under pressure in some countries.
The natural gas market is increasingly globalised, driven by the availability of shale gas and rising supplies of tradeable liquefied natural gas. The growth of the gas trade, as well as a shift away from long-term contracts towards spot pricing in many markets, has created greater interconnectivity between markets with demand or supply shocks in one region now having global implications, on both gas and electricity prices.
Last updated Apr 22, 2022
Key findings
Daily European month-ahead and Asian spot LNG prices, January - April 2022
OpenThe Russian invasion of Ukraine created unprecedented uncertainty and volatility for both European and Asian gas markets
European short-term prices have reached all-time record highs since the beginning of the conflict as Europe became the premium market this past winter and attracted massive LNG flows to compensate for the sharp decline in Russian pipeline deliveries. LNG diversions to Europe were key to balancing winter consumption. The competition for flexible LNG cargoes pushed Asian spot prices to a record high and led to further curtailment in price-sensitive importing markets, particularly in emerging Asia. Price volatility also reached record levels as a result of unprecedented uncertainty.
Gas-fired generation in the Net Zero Scenario, 2010-2040
OpenNatural gas-fired power generation is expected to increase 1% in 2021
Natural gas-fired power generation contracted 2% in 2020 but is expected to increase 1% in 2021. At about 6 300 TWh, gas fuelled 24% of total global power generation in 2020. In the Net Zero Emissions by 2050 Scenario, unabated gas-fired generation continues its growth in the short term, displacing coal-fired generation, but starts falling by 2030 and is 90% lower by 2040 compared to 2020. Increasingly, existing gas-fired power plants will need to be retrofitted with CCUS or co-fired with low-carbon fuels such as hydrogen to be consistent with Net Zero Scenario levels.
Upstream flaring CO2 emissions by region in the Net Zero Scenario, 1985-2030
OpenFlaring emissions must drop rapidly to get on track with the IEA's Net Zero Emissions by 2050 Scenario
Globally, 142 bcm of natural gas was flared in 2020 – roughly equivalent to the natural gas demand of Central and South America. This resulted in around 265 Mt CO2, nearly 8 Mt of methane (240 Mt CO2-eq) and black soot and other GHGs being directly emitted into the atmosphere. Five countries (Russia, Iraq, Iran, the United States and Algeria) accounted for more than half of all volumes flared globally in 2020.
Many options are available to reduce flaring, but they will likely require new gas monetisation strategies, business models, and more stringent (and enforced) regulations. An increasing number of companies is committing to eliminate flaring by 2030. The Net-Zero Emissions by 2050 Scenario requires all non-emergency flaring to be eliminated globally by 2030, resulting in a 90% reduction in flared volumes by 2030.
Many options are available to reduce flaring, but they will likely require new gas monetisation strategies, business models, and more stringent (and enforced) regulations. An increasing number of companies is committing to eliminate flaring by 2030. The Net-Zero Emissions by 2050 Scenario requires all non-emergency flaring to be eliminated globally by 2030, resulting in a 90% reduction in flared volumes by 2030.
Data browser
Analysis
Article
Frequently Asked Questions on Energy Security
The following information is based on the most recently available data and analysis from the IEA and will be updated periodically.
Statistics report
Energy Prices: Overview
High-quality data on end-use energy prices
Fuel report
The energy security case for tackling gas flaring and methane leaks
Commentary
How producers in the Middle East and North Africa can free up more natural gas for exports
Fuel report
Playing my part
How to save money, reduce reliance on Russian energy, support Ukraine and help the planet
Fuel report
Gas Market Report, Q2-2022
including Global Gas Review 2021
Statistics report
National Reliance on Russian Fossil Fuel Imports
How do countries rely on and consume Russian energy?
Reports
Our work
Created in 2013, the GOTCP brings together representatives from governments, industry and academia in a global dialogue to explore the role of oil and gas technology in the energy transition. GOTCP aims to catalyse innovation across oil and gas technologies and to provide collaborative opportunities for enhancing national capabilities within both onshore and offshore activities.
Related sectoral Technology Collaboration Programmes (TCP)
Events
11 Jul 2022 16:00—17:30
Global Gas Markets: Key trends and implications for Latin America
21 Apr 2022 11:00—12:00
Playing my part: How to save money, reduce reliance on Russian energy, support Ukraine and help the planet
15 Apr 2022
Gas 2022 (Q2)
25 Mar 2022 09:00—16:00
