Gas Will Become Second-Largest Energy Source By 2040

Natural gas will overtake oil as the second most popular energy source for power generation by 2040, the International Energy Agency said in its latest World Energy Outlook, adding that all worries about a glut will soon dissipate thanks to China’s ever-growing thirst for what many call a bridge fuel between the fossil fuel era and the renewables era.

Reuters recently reported that China had overtaken Japan as the biggest natural gas importer in the world. That’s thanks to a strategy for reducing pollution levels pursued by Beijing with a relentlessness that last year backfired, leaving several million households with no heating because of a gas shortage.

Yet imports are growing: in the first ten months of the year these reached 72.06 million tons, Reuters calculated, which was 33 percent more than a year earlier. Domestic production is also growing as consumption expands. China is currently the third-largest consumer of natural gas behind the U.S. and Russia, which are both a lot more self-sufficient in gas than China.

Despite this growth in natural gas consumption, however, according to the authority, coal will remain the single largest source of energy for power generation in the next two decades, but gas and renewables will gain a lot of ground, nevertheless. In fact, the IEA said, renewables will grow the most, representing two-thirds of new capacity additions until 2040. Their share in the power generation mix will increase to 40 percent, from today’s 25 percent, which is certainly an impressive rate of growth.

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And yet, even after 20 years, fossil fuels will continue to dominate this power generation mix, with coal keeping its place as the single largest source of energy in this sector. It’s up to governments to enable the transition to cleaner fuels, the IEA said.

“Our analysis shows that over 70% of global energy investments will be government-driven and as such the message is clear – the world’s energy destiny lies with government decisions,” the agency’s chief, Fatih Birol said. “Crafting the right policies and proper incentives will be critical to meeting our common goals of securing energy supplies, reducing carbon emissions, improving air quality in urban centers, and expanding basic access to energy in Africa and elsewhere.”

By Irina Slav for Oilprice.com

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