Economic Report 2020

ECONOMIC REPORT 2020

Gas market dynamics The impact on global gas demand seen this year will be more limited than oil, largely due to gas being more predominantly used in domestic settings and power generation which have demonstrated greater demand resilience than areas such as transport. However, it is still anticipated that gas demand will fall by around 4 per cent in 2020 (to 3.8 trillion cubic metres [tcm]), representing the largest annual decline in history and the first since the aftermath of the 2008 financial crisis. 27 Looking forward, annual demand is expected to return to growth in 2021, however the IEA estimates that around 0.75 tcm of demand growth is likely to be lost by 2025 and by 2030 gas demand will be around 2 per cent below the pre- pandemic trajectory.

Overall, gas demand is expected to remain more robust over the long term in comparison to oil demand, buoyed by its role as a key transition fuel for emerging economies still highly dependent on coal. Based on policies currently in place, by 2040 global gas demand could increase by 30 per cent, although in more ambitious scenarios could see a decline of 12 per cent compared with 2020, but still maintaining its overall share of the energy mix (23 per cent). In advanced economies with a high level of climate ambition, such as the UK, the reduction in gas demand could be greater than seen at a global level. The Climate Change Committee also estimates that a significant reduction in gas consumption will be required (depending on different scenarios relating to the future

Global Gas Demand

Global Gas Demand Scenarios

4.5

5,000

4

OPEC Gas Demand Outlook

4,500

3.5

4,000

IEA Stated Policies Scenario

3

3,500

2.5

3,000

IEA Sustainable Development Scenario

2

2,500

2,000

1.5

1,500

1

Global Gas Demand (Mtoe)

1,000

0.5 Global Gas Demand (Trillion Cubic Metres)

500

0

0

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Forecast

2010

2015

2018

2019

2025

2030

2035

2040

Source: IEA, OPEC

Source: IEA

27 https://www.iea.org/reports/gas-2020

22