Despite enduring demand for gas as a bridge fuel in the energy transition, supply is expected to crash following a 58% cut in investment from 2014 to 2020, the International Gas Union said. While spending has since edged up, differing forecasts for consumption and ambitious net zero policies hamper future planning.
“Restoring a sustainable balance in the global gas market is imperative and requires addressing the existing supply shortfall,” the IGU said in a report prepared with consultants Rystad Energy AS and Italian gas-grid operator Snam SpA. Investments are needed “to cope with natural supply decline, global demand dynamics, and likely growth in several regions.”
Countries in Europe have scrambled to secure new gas supplies after Russia’s invasion of Ukraine upended markets and prompted nations to prioritize energy security over green targets. Confidence in the fuel’s lasting appeal was evident in two long-term liquefied natural gas deals struck with Qatar this month.
Still, “uncertainty over the LNG market’s future trajectory and the role of gas in the energy transition continues to weigh heavily on — and in some cases delay — investment decisions,” the IGU said. “The level of future natural gas supply has been largely left to chance.”
Existing and approved gas production worldwide will reach about 4.1 trillion cubic meters this year, before sliding to an estimated 3.1 trillion in 2030 as fields mature. Output is seen shrinking to just under 1 trillion cubic meters by midcentury, the report showed.
The surge in large-scale investments in renewables may make it challenging to obtain adequate capital for gas projects, even as most demand scenarios call for additional exploration.
Balancing these needs “adds risk to both existing and future energy systems and calls for sound policies and incentive-based frameworks,” the IGU said. “There are challenges and significant uncertainty on how future gas projects will be developed and maintained.”
Share This:
