Highlighting the main trends that have made natural gas the world’s fastest growing fossil fuel, this paper identifies sectors and regions where gas demand is likely to grow in the coming years — especially outside of the power generation sector — in the industrial, petrochemicals, road and maritime transportation sectors, and in non-OECD countries. Highlighting advances in China and India, the paper shows that long-term government support, anchored around environmental standards, could enable gas to further increase its market share.
China and the United States (U.S.) have dominated growth in gas consumption since 2000. Even in Europe, where falling energy demand and the rapid increase in renewables have squeezed gas’s role in the energy mix, gas consumption has increased since 2014.
Electricity generation has dominated global growth in gas consumption, accounting for just over half of the total increase in the fuel’s use since 2010, followed by the industrial sector. Future demand for gas will likely come from rising industrial demand in Asia, petrochemicals in the U.S. and the Middle East, and from gas’s rising use as a transport fuel.
Countries including China and India have aggressively promoted the use of natural gas through mandates and subsidies, with the aim of improving local air quality. The success of these initiatives shows that policy support is sometimes needed to promote gas in the energy mix.
Former Research FellowKaushik was an applied economist and a research fellow at KAPSARC. He was responsible for defining and operationalizing the research…Kaushik was an applied economist and a research fellow at KAPSARC. He was responsible for defining and operationalizing the research agenda for KAPSARC’s Markets and Industrial Development team. Kaushik was previously the head of global gas markets in the Group Economics team at BP, where he oversaw the analysis that formed the basis for BP’s natural gas investment and trading strategy. Before BP, Kaushik worked at IDFC Bank, where his portfolio included policy research and advocacy on infrastructure and environmental economics issues. These issues included low carbon infrastructure, decentralized electricity services in rural areas, and organized intermediate public transport systems for small towns. Kaushik holds a doctor of sciences (D.Sc.) degree from ETH Zurich. He has also guided and implemented research in applied economics at TERI University, India, where he was also the program director of its two MBA programs.