The world’s appetite for natural gas grew at the fastest pace since 2010 last year, but that blockbuster growth is shifting into lower gear, according to the International Energy Agency.
Global demand for natural gas surged by 4.6% in 2018, driven by strong economic growth, the transition away from coal-fired electric power and weather-related demand. Gas accounted for nearly half of the world’s growth in energy demand, with most of the higher consumption coming from China and the United States, CNBC reported.
“In 2018, natural gas played a major role in a remarkable year for energy. Global energy consumption rose at its fastest pace this decade, with natural gas accounting for 45% of the increase,” IEA Executive Director Fatih Birol said in the agency’s annual natural gas report.
However, the Paris-based adviser to energy-importing nations says that extraordinary growth rate is not sustainable. Over the next five years, IEA expects gas demand to increase by 1.6% per year on average, marking a return to levels seen before 2017, when growth suddenly gained steam.
IEA chalks up the slowdown to forecasts for weaker economic growth, a return to average weather conditions and diminishing opportunities to switch from coal to gas in electric power plants.
Adoption of natural gas is the biggest contributor to the steady decline of coal-fired power in the US energy mix. China, the world’s second largest economy, is following a similar path as Beijing seeks to quickly improve the nation’s air quality.
IEA forecasts China will account for 40% of global gas demand growth during the next five years.
After surging by 14.5% in 2017 and 18.1% in 2018, Chinese gas consumption is projected to rise by just 8% per year through 2024, owing largely to slower economic growth.