China is expected to be the largest driver of the natural gas industry with the country's demand estimated to even come close to that of the whole European Union by 2040. This forecast is based on the World Energy Outlook 2018 released by the International Energy Agency on Nov. 13.
The outlook analyzed global energy trends and their impact on supply and demand, carbon emissions, air pollution, and energy access.
China is predicted to purchase a total of 369 billion cubic meters of gas by 2040. At that time, EU, which is now the biggest purchaser of natural gas, will be consuming natural gas at merely about 4 billion cubic meters higher.
The world's second-largest economy is also expected to triple its consumption of natural gas to 710 billion cubic meters by 2040. This will account for almost 30 percent of the overall demand growth worldwide by that year.
Last year, China had already surpassed South Korea and is on track this year to surpass Japan as the largest consumer of natural gas.
Russia, meanwhile, has consistently been the largest provider of natural gas to the EU. By 2040, Russia is expected to export as much as 37 percent of the world's natural gas supply. This will be driven by the strong demand from China. In fact, Russian pipeline gas supplier Gazprom PJSC is set to close a deal involving the supply of the fuel produced under what is dubbed as the "Power of Siberia" to China.
On a worldwide scale, the World Energy Outlook 2018 predicts that demand for all forms of energy will grow by 25 percent by 2040. This forecast means the world will require more than $2 trillion of annual investment in new energy supply.
Dr. Faith Birol, IEA's executive director, explained that the analysis indicates that more than 70 percent of global energy investments will be government-driven. This means that government decisions are integral in shaping the future of the energy sector. Birol added that effective policies will be significant for the world to achieve the common goals of securing energy supplies, reducing carbon emissions, improving air quality, and growing basic access to energy in Africa and other critical markets.
The outlook also predicts that renewable energy will become the technology of choice in the future. The use of renewable will make up almost two-thirds of the world's energy utilization. By 2040, the share of renewable in the energy sector will be more than 40 percent from 25 percent at present.
Demand for electricity will also be higher, driven primarily by the equally rising use of digital technology, electric vehicles, and similar innovation.
