EIA Sees Natural Gas as Fastest Growing Fossil Fuel

Natural gas is the world’s fastest growing fossil fuel, the US Energy Information Administration (EIA) says in its latest International Energy Outlook (IEO2017), outpacing both liquid hydrocarbons and coal.

Globally, demand is projected to grow 1.4%/year through the 2015-2040 forecast period, compared with liquids growth of 0.7%/year and coal growth of just 0.1%/year.

Demand grows in both OECD and non-OECD countries, but is greatest in the developing non-OECD world, where expanding industrial sectors and increased demand from the power sector – together accounting for nearly 75% of the total growth – will push the share of gas in the overall mix to 59% in 2040 from 53% in 2015.

Stricter limits on sulphur in marine diesel, the EIA outlook says, will lead to increased use of LNG as a bunkering fuel towards the end of the forecast period.

Global natural gas production, meanwhile, is forecast to rise to 176.7 trillion ft³ by 2040 in the outlook’s reference case from 124.1 trillion ft³3 in 2015, led by the Middle East (growth of 11.8 trillion ft³), the US (10.7 trillion  ft³) and China (9.5 trillion  ft³). Most of the growth in China and the US will come from shale gas developments, the EIA says.

Canadian production grows modestly, to 7.1 trillion  ft³ from 5.5 trillion  ft³, while Mexican output edges slightly higher, to 1.8 trillion  ft³ from 1.3 trillion  ft³.

Increased development of shale gas is not only important in the US, where it will account for nearly 70% of total dry gas production by 2040, compared with 50% in 2015, and is a major driver in the growth of US LNG exports, but is also key in China and Canada. Shale gas is expected to account for half of China’s production by 2040, making it the second largest shale producer after the US, while in Canada, most production growth over the forecast period is expected to come from several shale gas plays in the provinces of British Columbia and Alberta.

Dale Lunan