BDC

Natural Gas ‘Golden Age’ Put On Hold

The International Energy Agency says that the ‘golden age’ of natural gas has now been put on hold.

Last year saw the consumption of natural gas in China grow at its slowest rate for 17 years, which, according to the world’s leading energy body, is said to be one of the factors that will hinder the commencement of the fuel’s ‘golden age’.

The country, which is being transformed into a consumer-driven economy, has seen a deceleration in gas demand growth to around 4% last year, which was the slowest rate since 1998.

That is a significant fall in average growth compared with the 15% rate between 2009 and 2014.

IEA Executive Director, Faith Birol, said that China remains in the best position in terms of gas demand growth, however it has considerably slowed down from its previous rate.

He says that as a consequence of this, the arrival of the golden age of gas has stalled.

In industrialised countries from the US to Europe there has been subdued economic growth which has also contributed to the slowing global energy demand growth.

Mr Birol said that this has created ‘headwinds’ for natural gas, at a time when it was anticipated that it would play a bigger role in the global energy mix.

He also commented that the fall in gas prices, which can be linked to the collapse of oil over the last year and a half, has not resulted in a stronger than expected demand.

Gas is now not just facing competition from cost-wise alternative, but also the new climate agreement signed in Paris, which has mobilised renewable technology support.

As a result of all this, gas has found it difficult to compete.

In the period up to 2021, global gas consumption growth will fall to an average yearly growth rate of 1.5%, compared with the 2.5% rate over the last six years.

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BDC 299 December 2022