In an energy-hungry world, natural gas gaining the most
Natural gas was the fastest-growing energy source in the world last year — when global energy consumption rose at its fastest pace in nearly a decade, according to a new International Energy Agency report.
Driving the news: Natural gas accounted for 45% of all energy consumption growth in 2018. Most regions and many industries, including the shipping sector, as shown in the above chart, are turning to the fuel as a cleaner-burning, cheap alternative to coal and oil.
The big picture: Development of new gas resources, led by America, has ushered in what the IEA predicated in 2011 would be a “golden age of gas.” This is reshaping geopolitics and complicating efforts to address climate change. While the cleanest-burning fossil fuel, natural gas still emits greenhouse gas emissions compared to sources like renewables or nuclear power.
The intrigue: One stark example of how environmental concerns overlap with natural gas is the shipping industry’s anticipated shift to liquefied natural gas (LNG) over fuel oil.
- The IEA projects a tenfold increase in LNG as shipping fuel by 2024, with container and cruise ships accounting for most of that.
- This shift is being chiefly driven by tougher environmental rules on the maritime industry that a U.N. agency will begin implementing in January 2020.
One level deeper: Much of the debate around natural gas focuses on electricity, such as its role in displacing coal and competing with (and sometimes complementing) variable renewable energy. But it's industrial uses for natural gas, such as chemicals and fertilizers, that are the biggest drivers of growth in most areas of the world, per the IEA report. These uses can’t be as easily replaced with renewables like electricity can.
What’s next: IEA sees more demand growth ahead, but not as fast as last year’s. It projects worldwide demand will rise more than 10% over the next 5 years, with China alone expected to account for 40% of the increase.