Natural gas will be a growing part of the world’s energy mix for decades to come, according to the latest analysis by the International Energy Agency.
In fact the IEA expects natural gas use to increase by 45% between now and 2040.
The upbeat forecast by the world’s foremost energy market analyst is good news for global energy consumption patterns and the link to reducing the rate of carbon emissions growth. This is because a large part of the growth in gas usage is anticipated to displace coal-fired electricity generation.
Natural gas produces only half the carbon emissions of coal-fired power. The proof of this is plainly evident in the USA, where a natural gas boom has driven economic growth, created jobs and simultaneously driven down energy prices and carbon emissions.
Australia plays a relatively small role in global carbon emissions because of our relatively small population. However we are strongly punching above our weight in contributing to emissions reductions because of our growing exports of liquefied natural gas (LNG).
In many parts of Asia, Australian LNG is being used in place of coal for electricity generation, significantly cutting carbon emissions.
Ironically, at home in Australia, two States are set to go in reverse gear, using diesel generators to plug gaps in energy demand.
In South Australia a new gas-fired electricity generator will help fix their supply problems in the years ahead. In the interim, diesel generators will help fill renewable energy gaps when the wind is not blowing and the sun is not shining.
Victoria is also reaching for diesel capacity as it anticipates tight summer electricity supply following the closure of the Hazelwood coal-fired power station. Victoria could use gas to fill the gap, but it is constrained by its own irrational policy prohibiting natural gas development.
According to the IEA Gas Outlook 2017 forecast, the biggest increase in demand for natural gas will come from India, followed by Southeast Asian countries.
Developing economies are expected to account for two-thirds of global energy growth. Power generation demand is a key element of growth, but increasing industrial demand is also a factor.
The IEA identifies Australia’s important role in meeting this growing demand, via its LNG exports, and thereby playing a constructive role in substitution of coal-fired power and cutting future carbon emissions.