Natural Gas Use Falls But Renaissance Is in the Pipeline

Saya Kitasei | Aug 05, 2010

Widespread economic contraction in 2009 caused the largest recorded annual decline in global natural gas consumption: a 2.1 percent drop to 103.8 trillion cubic feet (tcf).1 (See Figure 1.) Gas consumption fell even more than coal and oil use did, reflecting the fact that energy consumption in North America and Europe—the largest gas consumers—fell sharply in response to the recession, while the world’s fastest-growing energy market, China, used relatively little natural gas.2 Overall, natural gas was responsible for 23.8 percent of global primary energy consumption in 2009, a slight decrease from 2008.3 (See Figure 2.)

Yet the decline in gas use in 2009 will likely turn out to be a one-year anomaly, as a global renaissance in natural gas is beginning to take shape. Although global production of natural gas fell in response to reduced demand from 108.3 tcf in 2008 to 105.7 tcf in 2009, proven global reserves of natural gas rose 1.2 percent to an estimated 6,618 tcf.4 (See Figure 3.) Potential recoverable reserves have been estimated at 16,200 tcf, which would be a 150-year supply at 2009 consumption rates—a figure that is expected to rise significantly as unconventional gas resources are discovered outside North America.5

In addition, the combination of growing supply and restrained demand led to a severe drop in spot natural gas prices in 2009 to less than half the record 2008 levels.6 (See Figure 4.) These more moderate prices have increased natural gas’ competitiveness with both oil and coal and have begun to spur demand in some countries.

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