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Over the following 25 years, the world’s growing energy needs will be met first by renewables and natural gas, with global energy demand to jump by 30 percent by 2040.
In its World Energy Outlook 2017, the International Energy Agency notes that over the next two decades the global energy system will be reshaped by four major forces, the United States is set to become the global oil and gas leader, renewables are being deployed rapidly thanks to falling costs, the share of electricity in the energy mix is growing and China’s new economic strategy takes it on a cleaner growth mode, with implications for global energy markets.
By the mid-2020s, the United States is projected to become the world’s largest LNG exporter and a net oil exporter by the end of that decade.
This is having a major impact on oil and gas markets, challenging incumbent suppliers and provoking a major reorientation of global trade flows, with consumers in Asia accounting for more than 70 percent of global oil and gas imports by 2040. LNG from the United States is also accelerating a major structural shift towards a more flexible and globalized gas market, the report shows.
Liquefied natural gas accounts for almost 90 percent of the projected growth in long-distance gas trade to 2040, with few exceptions, most notably the route that opens up between Russia and China, major new pipelines struggle in a world that prizes the optionality of LNG.
Gas supply also becomes more diverse as a number of liquefaction sites worldwide doubles to 2040, with the main additions coming from the United States and Australia, followed by Russia, Qatar, Mozambique and Canada.
Over the longer term, a larger and more liquid LNG market can compensate for reduced flexibility elsewhere in the energy system.
In addition, IEA’s outlook finds it is too early to write the obituary of oil. Global oil demand continues to grow to 2040, although at a steadily decreasing pace – while fuel efficiency and rising electrification bring a peak in oil used for passenger vehicles, even with a doubling of the car fleet to two billion vehicles. But other sectors – namely petrochemicals, trucks, aviation, and shipping – drive up oil demand to 105 million barrels a day by 2040.(source: LNGWorldNews)