Natural gas is well on its way to a bright future, according to a new report from the International Energy Agency (IEA) that projects China will more than double consumption over the next five years while lower prices from the unconventional gas revolution will continue to benefit the United States.
The report, Medium-Term Gas Market Report 2012, says China will become the third-largest gas importer behind Europe and Asia Oceania, driving a 2.7% average annual growth in global gas demand through 2017 (up from the 2.4% annual growth rate predicted in last year's report). During the period, North America will become a net LNG exporter, while Japanese imports will increase, although by how much will hinge on the country's nuclear policies.
Medium-Term Gas Market Report 2012, part of a series of IEA medium-term market reports also featuring coal, oil and renewable energy, presents detailed forecasts for the next five years of sectoral demand by region plus supply and trade. An in-depth analysis addresses infrastructure investments in LNG and pipelines.
The release of Medium-Term Gas Market Report 2012 comes a week after the IEA issued a special report, Golden Rules for a Golden Age of Gas, which looks at the environmental impacts of unconventional gas production and how those impacts are being - and might be - addressed over the next 25 years.
Golden Age of gas
"The Golden Age of Gas has dawned in North America, but its continued expansion worldwide depends on producing gas and bringing it to the market in a way that is friendly to investors and society as a whole," said IEA Executive Director Maria van der Hoeven. "As gas competes against other energy sources in all market segments, notably in the power sector, pricing conditions are a key element to keep it competitive everywhere. This medium-term report aims to facilitate investor decisions by providing a timely, in-depth analysis of the current trends and what we expect to take place over the coming five years."
While the report sees growth for natural gas in most regions, low economic growth, relatively high gas prices and strong growth of renewable energies will limit demand in Europe. Successful and timely developments of new resources should lift gas demand in the Middle East, Africa and Asia.
Future sources of supply
The report identifies other future sources of supply, with most incremental gas production coming from the Former Soviet Union (FSU) and North America. Further growth in unconventional gas will come mostly from shale gas in North America plus tight gas and coalbed methane (CBM) production elsewhere. Shale gas developments in other regions are likely to be concentrated in China and Poland.
Adapted from press release by Peter Farrell.
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