Over the next two decades, global demand for natural gas will grow more than four times faster than demand for oil, the International Energy Agency (IEA) said in a report on Wednesday.
“Natural gas sees broad-based growth across the energy economy, in contrast to oil where growth is concentrated in parts of the transport sector and petrochemicals,” it said.
The Paris-based IEA said in its World Energy Outlook 2019 that energy demand would grow by 1 percent every year to 2040.
This will be driven by solar photovoltaics, which will supply more than half of the growth, and natural gas – boosted by rising trade in liquefied natural gas (LNG).
Oil demand will flatten out in the 2030s, the agency said in its Stated Policies Scenario.
Global gas demand will reach 5.4 trillion cubic metres in 2040, up 40 percent from current levels, it added.
The IEA said that developing Asian economies account for half of the global growth in gas demand.
“By 2040, they consume one-quarter of the world’s gas production, much of it sourced from other regions,” it said.
The IEA also emphasized the importance of security in the oil industry.
“Despite some positive developments in recent years, there are plenty of reasons for policymakers to continue to pay close attention to oil market security,” the agency said.
On September 14, attacks on two of Saudi Arabia’s key oil installations took out about 5 percent of the world’s oil supply.
While global oil demand growth has slowed, demand from Asia continues to grow briskly, and much of their supply flows through major chokepoints, the report said.
The IEA said the rise of US shale exports has offered Asian buyers the chance to diversify their supply. But, new exports have put more pressure on oil-reliant economies, which are facing “escalating” geopolitical tensions, it added.
“Against this backdrop, the role of emergency oil stocks to help weather sudden supply disruptions remains vital,” the agency said.
The IEA expects global growth in oil demand to slow after 2025 before flattening out in the 2030s.
Demand for the commodity will continue to grow in sectors such as long-distance freight, shipping and aviation, and petrochemicals, the report said.
But, its use in passenger cars will peak in the late 2020s due to fuel efficiency improvements and a switch to electric vehicles, it added.