Context - Energy - Natural (Fossil) Gas

(Note –All references used in the article are indicated and linked in the article. Direct quotations are indicated in italics – Emphasis highlighted in maroon. A Glossary of Energy Terms used in this article is provided here. )

Summary

Natural Gas is Methane (CH4) – there are large reserves remaining.
Gas is a very flexible source of energy with a range of uses, growing fastest in its use for electricity generation where it can be turned on and off rapidly to deal with peaks in demand.
It has the lowest carbon emission density of the three fossil fuel types (coal, oil and gas) provided that leakage is kept to a minimum as methane is a very highly carbon polluting substance. If leakage is high it can be more polluting than coal.
Gas demand has grown to over 21% of the total energy market, led by South East Asia in recent years.
Supply of gas in form of Liquid Natural Gas is potentially a big development for energy security, particularly since the Ukraine war.
To achieve net zero by 2050 gas demand needs to peak before 2030 and fall by 50% by 2035 and halve again by 2050, replaced by renewable energy according to the IEA.
Net Zero by 2050 is essential to keep the climate within what has been indicated as ‘safe’ heating limits of between 1.5 and 2 degrees of warming.
Because of gas relative flexibility as an energy source and relatively low carbon content, a big question is whether the fuel switch to renewables can be achieved or indeed if coal demand switches to gas instead of renewables.
Will need strong political will and policy incentives but there is some public opposition to switching particularly from gas boilers to heat pumps.
Understanding the broader reasons and need for this change will be crucial for both politicians and the public support of the transition.

1. Natural Gas Characteristics – Uses, Energy, Climate and Environmental:

Following key points are derived from: Uses of Natural Gas | Union of Concerned Scientists and further links from that page unless otherwise referenced:

Source: Natural Gas ( Fossil Gas or simply ‘Gas’) is a colourless, odorless fossil fuel light weight gas composed primarily of methane (CH4) with smaller amounts of other hydrocarbons typically trapped in porous rocks under impervious cap rock layer, formed from decomposed organic matter over the past 550 million years.

Reserves: The world has massive available reserves; estimated reserves of 188 trillion (thousand billion) meters cubed of gas reserves. Russia has the largest reserves (37Tn Meters cubed) followed by Iran (32Tn), Qatar (24Tn), Turkmenistan (13.6Tn), United States (12.6Tn) and China (8.3Tn) and after, in order of volume; Venezuela, Saudi Arabia, UAE and Nigeria. Gas can be sourced though conventional drilling or by new developed extractive methods (‘unconventional’ gas resources) most commonly using lateral drilling and hydraulic fracturing (‘fracking’) in shale gas as well as coalbed deposits which are economical to extract with new technologies. This unconventional source represents more than 50% of the US source and has led to the boom in US gas consumption and exports.

Uses: A key feature of natural gas is the wide range of uses in the modern world. Starting in the 1800s for ‘gas lighting’ in streets and homes that has now expanded to heating in buildings, water and cooking, in industrial process, notably for the production of hydrogen (providing the high temperature required for the combination of water and methane) and electricity production. Compressed natural gas, liquified natural gas (LNG) and liquified petroleum gas (LPG), primarily propane has much more of a feature recently, since the Ukrainian war interrupted supplies in Europe, as it can be transported by ship over long distances and is particularly versatile in its use including for modified internal combustion engines in transport. However LNG is expensive to produce and transport as it requires very cold storage at -162 Celsius.

Electricity – Electricity generation is the fastest growing use for natural (fossil) gas today and currently accounts for 22.5% of total global production (42% in the USA, the Country with the largest share since the mid 2010s).

It is electricity power generation that is the fastest growing application for natural gas. New natural gas combined-cycle (NGCC) plants utilise both the gas in combustion and after the hot exhaust to boil water drive a steam turbine increasing efficiency in the conversion of heat energy to electricity from 35-40% under the older single cycle plants to over 50% in the NGCC plants making it one of the most efficient sources of energy. Gas also offers much greater flexibility in its ability to be turned on and off rapidly acting as a key peaking source to manage high electricity demand periods.

Prices: The new NGCC combined with the development of fracking and other unconventional extractive technologies, particularly in the USA has also driven the price of both natural gas as well as gas powered electricity generating plants down significantly resulting in a period of rapid growth in gas generation from the 2010s. However this cost advantage has reduced significantly in recent years due to geopolitical price increases (particularly the recent war in Ukraine) as global gas prices become much more volatile. This combined with the growth in recent years of cheap renewable sources has moderated gas power generation.

Climate and Environmental Factors: Gas produces less CO2 then oil and significantly less than coal ( carbon intensities: 200g CO2 versus 266.5g and 338.2g per kilo Watt per hour kWh for gas, oil and coal respectively); about 40% less emissions than coal and 25% less than oil.

However the above figures assume no leakage of methane which is x86 times stronger atmospheric heating effect than CO2 over a 20 year period (34 times stronger over a 100 year period as it has much shorter residency in the atmosphere than CO2 before being broken down). Therefore the leakage rates of methane must be factored before determining the true emissions impact of these fuel sources. One study reported in the Union of Concerned Scientists indicates that methane losses must be kept below 3.2% for natural gas to have lower emissions than coal over timeframes of 20 years or lower. Methane emission rates have been notoriously difficult to calculate and have been estimated to vary between from 4.8% to 0.93 in the USA alone. Clearly, this scale of variance in estimates even in an advanced economy of the US puts in question the true emissions advantage of natural gas.

Natural gas combustion produces nitrogen oxides which are precursers to smog. Unconventional extractive methods such as fracking has been the focus of much environmental concern including reduced groundwater levels and water course contamination due to hazardous chemicals utilised in the fracking process. One particular concern is incorrectly constructed or later failing wells which results in gas leaking into the groundwater. Leakage or spillage of the 1000 variety of chemical additives for fracking has also been highlighted as an environmental concern.

2. Global Natural Gas Consumption trends – historic and future

(all charts from https://ourworldindata.org unless otherwise stated)

The above chart gives some indication of steady and steep rise of use of natural gas power globally since 1970 approximately when consumption stood at 9,615TWh by 1990 that had more than doubled to 19,481 and continued to follow a steady increase since then, with the rate of adoption increasing in recent years (19,481TWh in 1990, 31,593TWH in 2010 and 40,101TWh in 2023). It is particularly notable that this rate increase since 2010 has coincided with the plateauing of coal at around 40TWh since then indicating that natural gas is the preferred power generating energy source at a global level.

This growing share of natural gas is reflected in the growing percentage share of the overall energy consumption even as energy consumption continued to grow steeply as apparent in the above chart. In 1970 gas held 14.43% share of the energy market, that grew to 18.57% by 1990 , 20.65% by 2010 and 21.81% share of total energy consumed in 2023 while the total energy market grew in the 13 years from 2010 to 2023 by 19.6% (from 153,125 to 183,230TWh).

As may be seen in the above graph showing share of natural gas consumption over time by region; up to the mid 1970s approximately, North America ,predominantly the United States, consumed more than 50% of the global total. By 2000 that had fallen to 31.4% as the Middle East developed to 7.6% and the Asia Pacific region to 12%. By 2023 that trend had reinforced with the Middle East increasing its global share to 14.43% and Asia Pacific to 23.23% of a much larger overall pie. While North America remains the largest market at 27.33%, Asia Pacific is now in second place and the share for Europe has almost halved from 23.28% in 2000 down to 11.55% in 2023 reflecting its significant power diversification towards renewables and energy efficiencies.

Future Gas demand –

Following key points are derived from the International Energy Agency (IEA), World Energy Outlook 2024 (see also the analysis here for a review of the reports main findings).

Flexibility – Natural Gas has flexibility advantages compared to coal but also compared to renewables and potential cost advantages compared to renewables with battery storage. The big question is whether and to what extent it will be natural gas that displaces coal in the electricity sector or whether indeed coal can hold its power share against both.

Liquid Natural Gas (LNG) is the big development in recent years following curtailment of Russian gas supplies to Europe in particular. This has prompted an increase of nearly 50% in LNG export capacity which is a ‘huge addition to global supply’ and improves energy security overall (p19). However this risks a global glut of gas potentially pushing down gas prices significantly overall which could have a knock-on impact on the uptake of renewables. This surplus gas is estimated to last until 2040 (p29)

Demand – While renewables have grown exponentially, the increased demand for electricity has outpaced that growth of renewables resulting in an increase in coal and natural gas power to meet that need but the report predicts that renewables capacity will be able to meet all additional demand by 2030. The question is will the demand be placed with renewables or gas and coal. (pages 46- 50).

Uncertainties – In the 2010s natural gas grew at a rate of 2.7% per year and in recent years by 1.2%. So will this growth continue? The answer is possibly if electricity demand continues to grow at 2.9% and no new efficiency measures to dampen demand and gas meets the same share as today. Similarly the case, if there is increased industry demand for energy and less electrification in that sector, gas is likely to become the main energy source.

Fuel Switching? Whether coal power source switches to gas or renewables is major question facing the clean transition but if the switch is to gas that itself would have a significant impact on continuing growth in demand. Finally if renewables did not grow at the anticipated levels (from 550GW additions per year in 2023 to 800GW per year by 2040) then again that would result in further growth in natural gas demand. All these factors are expressed in the graph where the STEPS line shows expected flatlining of natural gas demand but with the variables considered in this list (and a few others) showing how they might play out in terms of higher gas demand (pages 53-55):

( Note from above chart, STEPS is the standard energy and emissions scenario based on current policies)

3.Net Zero by 2050?

Following key points are derived from the International Energy Agency (IEA), Net Zero Roadmap – A Global Pathway to Keep the 1.5C Goal in Reach, 2023 Update (NZ Report 2023)

Peaking Demand – From the above WEO2024 report, the IEA estimates that demand for natural gas will peak before 2030 even without the implementation of new policies (subject to the uncertainties considered). This change is attributable primarily to the roll out of new renewables and to a lesser extent energy efficiency measures. However NZ Report 2023 also makes clear that this rate of the transition would not be sufficient to achieve the 1.5C climate goal.

Rapid Decline – As reflected in the following graph and table, in order to achieve the net zero emissions target Rapid Decline – As reflected in the following graph and table, in order to achieve the net zero emissions natural gas needs to begin to decline this decade, albeit not as steeply as coal or oil: in order to achieve feasibly net zero globally by 2050 (and thus the 1.5 degree heating goal): natural gas needs to fall from 144EJ ( = 40,000 TWh) to 118 by 2030 (32,778TWh), 77EJ (=21,388TWh) by 2035 and 32EJ by 2050 (8888TWh). That is a fall of nearly 50% current consumption in the next ten years and to halve that again in the following 15 years which by any account is an enormous transition to make.

Natural Gas – Gaps For a NZE Transition –

Net Zero Scenario – It is important to note that the IEA’s Net Zero 20250 Report is, unlike its STEPS scenario counterpart, not a prediction of outcomes in 2030 or 2050 but rather presents a feasible if very ambitious pathway to achieve a desired outcome; ie. net zero emissions by 2050 (with remaining emissions balanced by CO2 removal). Following is a brief outline of some main challenges faced in achieving that target both in the intermediate time periods of 2030, 2035 and to 2050.

Advantages – Natural Gas has many advantages from the efficiency gains due to NGCC plant developments to the flexibility for supplying peaking demand in the electricity market, the range of applications from domestic heating to industrial applications (including all the new infrastructure in place for those purposes) to the potential for supply security and significant price reductions with the increased capacity coming online from recent development of large new LNG facilities. These are reflected in the upgrade to the WEO2024 predictions compared to its WEO 2023 report and indicates a larger share of the future energy market for natural gas but nevertheless the WEO2024 report still has natural gas peaking before 2030.

Strong Policy Push – However peaking before 2030 is only the start; NZE2050 requires more, much more: starting with a reduction of 50% consumption in the space of just five years to 2030 and a further more than halving again to 2035 with a trebling of renewable capacity replacing not just coal but the strategically well placed position of natural gas. As acknowledged in the WEO24 report (p32) this will not happen without strong ‘policy settings favouring renewables and energy efficiency which may constrain a robust demand response [for gas]’. The liklihood of this constraint occurring is framed in notably moderate terms. It would demand a strong commitment for governments to support massive renewables deployment at the expense of natural gas.

Push-back: But this comes at a time of public led opposition to the phase out of natural gas heating boilers, both in the UK and Germany, which have been successful in weakening these commitments and are indicative of more widespread opposition to the phasing out of fossil fuels with all their short term conveniences (ignoring their profound harm to the planet by their emissions). More pointedly, is the election of Donald Trump with his commitment to ramp up US fossil fuels, including opening of new gas and oil fields under a slogan of ‘drill baby drill’ and a declared energy emergency to implement the policy. With these political and policy factors; the future for natural gas looks strong. It could be that, not only might the NZE 2050 scenario reductions not happen to 2050 but the WEO24 predictions of peaking gas by 2030 may also struggle. Much will depend on the relative economic attractiveness of renewables but that will not be a easy race to win alongside the market advantages of natural gas and an inherent bias toward natural gas. The broad based understanding and support for imperative to end the burning of fossil fuels is essential for this transition to happen and this major challenge will be tested in the displacement of natural gas for renewables over the coming decade.

MCL – February 2025 (next update schedule: Spring 2027; more regular updates in the ‘Recent News Article Links ).

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