The various decarbonization pathways and scenarios are likely underestimating the rate at which global energy consumption is rising, which could create a supply shortfall of natural gas by the end of the decade, Switzerland-based industry organization International Gas Union (IGU) said in its Global Gas Report 2024 on Tuesday.
If global natural gas demand continues to grow as it did in the last 4 years, without additional production development, a 22% global supply shortfall is expected by 2030, IGU said in the annual report.
"If demand continues to strengthen, the shortfall will be more pronounced. This underscores the urgent need to scale up investments," the industry group said.
It also warned that the decarbonization scenarios, which various agencies have published and on which policy makers rely to make decisions, may not have fully accounted for the recent rise in energy consumption from data centers and cooling.
"These scenarios are likely to underestimate the actual rate of demand growth creating imminent pressure for planners to ensure sufficient supply to meet demand," IGU said.
According to the group, this "significant gap between actual consumption patterns and scenario assumptions" highlights the need for a realistic approach in planning to account for the scalability, reliability, and affordability requirements of changing consumption patterns.
Global gas demand rose by 1.5% last year compared to 2022, and demand is set to rise by another 2.1% this year, thanks to Asia's strong demand growth.
The report also shows that "the 2030 energy targets of even the relatively less ambitious climate and energy consumption scenarios are unlikely to be achieved," IGU said.
Natural gas plays a key role in addressing the so-called energy trilemma- sustainability, security, and affordability, the gas industry group says.
"As we look ahead, the potential supply and investment gap in gas and other low-CO2 energies calls for immediate attention," the report found.
"It is essential to cross-check scenario pathways with actual forecasts to avoid misalignment and ensure that the energy supply keeps pace with evolving demand."
By Charles Kennedy for Oilprice.com
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Comments
The reason is simple. It is the intermittent nature of solar and wind energy. This means that renewables are incapable on their own of satisfying global demand for electricity without huge contributions from natural gas, coal and nuclear power. This is an absolute fact.
Another fact is that fossil fuels will continue to drive the global economy well into the future. So the IEA, environmental activists and vested interests should stop lying about energy transition and net-zero emissions and accept realities of the market.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert