GCC Think Act Tank cover 2019

What Is The Future of The Worldwide Natural Gas Market?

The natural gas industry, together with the oil industry, together account for an estimated 24% of all anthropogenic methane emissions. According to for instance the U.S. Energy Information Administration, natural gas is a fossil energy source consisting mainly of methane, which is a chemical compound with one carbon atom and four hydrogen atoms. The chemical formula for methane is CH4. 

The United States of America currently leads the production of natural gas hydrocarbons, followed by Russia, Iran, Qatar, Canada, China, The European Union, Norway, Saudi Arabia, and Turkmenistan. In World Oil Outlook 2040, OPEC estimates that the largest upcoming energy demand will come from natural gas, with an average annual growth of 0.4 % from 2015 to 2040. (Global Methane Initiative 2018; Central Intelligence Agency 2017; U.S. Energy Information Administration 2017; OPEC 2017).

In OPEC ́s forecast for the world primary energy demand by fuel type from 2015 to 2040, the demand for gas will increase by a rate of 1.8% p.a., with the majority of the increase coming from non-OECD countries and the most rapid economic growth in the developing world. OPEC projects the global economy in 2040 being 226% in comparison to 2016, with 3/4 of growth coming from developing countries. China and India alone are projected to account for almost 40% of the global GDP in 2040. (OPEC 2017. World Oil Outlook 2040).

The OPEC acknowledges the relation between population growth and energy demand, however, considering a number of variables for instance in consumer trends. It also states how energy markets are affected by government policies and recognizes the need to monitor these on a regular basis, taking into consideration for instance the Paris Agreement and the Sustainable Development Goals, with energy efficiency and clean energy now trending development. The OPEC is closely monitoring worldwide energy market and policy developments, mentioning the USA, the European Union, China, and India at the forefront.

Furthermore, OPEC estimates that total world primary energy demand by fuel type from 2015 to 2040 will see an increase of 3.6% for gas, 1,5% for nuclear energy, 0.3% for hydro energy, and 4% for other renewables, while the demand for oil would decrease by 4.2%, coal demand decreasing by 5.1%, and biomass demand decreasing by 0.1% during the time frame. The OPEC identifies energy efficiency as a critical uncertainty for the energy market with policies concentrating on reducing emissions through a number of measures related to financial and fiscal instruments. (OPEC 2017. World Oil Outlook 2040).

Estimated Global Methane Emissions 2020
Estimated Global Methane Emissions 2020

The U.S. Energy Information Administration presents natural gas as a proportionately clean burning fossil fuel, although exploration, drilling and production have direct impacts on the environment, in addition to the fact that natural gas consists mainly of methane which is a powerful greenhouse gas. Leaks from natural gas-related activities such as pipelines are causing toxic anthropogenic methane emissions. Despite the many environmental and health risks related to fossil fuels such as natural gas, the global energy market will continue to depend on these. 

The OPEC projects that oil and gas combined will supply for more than 50% of global energy needs between 2015-2040. Gas alone is estimated to have a share of 29% in OECD, 20.8% in developing countries, and 45.4% in Eurasia in 2040. In China, gas is forecast to account for 10.6% of energy demand in 2040, while coal is expected to drop down to 48.6% from 64.3% in 2015. 

The OPEC estimates that the highest growth in gas demand in the OECD region will be in OECD America, recognizing key influences related to the overall demand of natural gas and its dependency on multiple critical factors including gas supplies, competition,  regulations, and pricing.

For instance in Finland, the national Energy Authority reports that “The Finnish natural gas market has been under sector-specific regulatory supervision since the assertion of the Natural Gas Market Act in August 2000”. The natural gas market in Finland has currently no competition, with 100% of the natural gas is being imported through one pipeline from Russia and traded on the Finnish market by one single company. In Finland, the demand for natural gas has been in decline for several reasons, with natural gas accounting for six (6%) of total generation fuel mix in 2018, with the baseline for energy demand being market-based. 

In its World Gas Perspectives report (2017), the World Energy Council identifies four key findings concerning the development of the world gas market: 1) gas is expected to be the only source of fossil fuel with a growing share of the world energy market until 2050, although the long-term future for gas is insecure; 2) the global gas market will shift to Asia, with demand in Europe and North America stagnating or even decreasing; 3) by 2060, worldwide electricity demand will double, posing a possibility for the natural gas market to further grow, unless governments and regulators decide differently; 4) the natural gas sector must innovate and become a cleaner source of energy – policies and societal change will have an impact on the future of the worldwide gas market. Despite having lower emissions than both coal and oil, gas is a fossil fuel which emits greenhouse gases. 

Read one of my previous articles here: Why  Is Our World In A Freshwater Crisis?

Connect with me on Twitter @annemariayritys. For climate/environment-related posts only @GCCThinkActTank. Subscribe to Anne-Maria Yritys to receive my latest articles delivered personally to you.

 

 

 

Estimated Global Methane Emissions 2020

Why Is Coal Mining Environmentally Damaging?

Coal, which is primarily used as a liquid fuel, in cement manufacturing, steel production and electricity generation, accounts for an estimated nine per cent (9%) of total methane emissions worldwide. (Global Methane Initiative 2018; World Coal Association 2017). The top 10 coal producers worldwide account for 90% of total coal emissions: China, India, USA,  Australia, Indonesia, Russia, South Africa, Germany, Poland, and Kazakhstan. (IEA. 2017.) 

According to the International Energy Agency, total coal production declined more than ever since the IEA began its recordings in 1971, with a drop of 458 Mt down to 7.268.6 Mt in comparison to 2015, despite the fact that India, Russia, and Indonesia increased production in 2016.

The World Coal Association states that around 15 percent of all hard coal production is  destined for the international coal market, with the largest exporters being Australia, Indonesia, Russia, Colombia, South Africa, USA, Netherlands, Canada, Mongolia and Kazakhstan. China is the leading importer of coal, followed by India, Japan, Korea, Chinese Taipei, Netherlands, Germany, Turkey, Malaysia and the Russian Federation. (IEA 2017.)

Furthermore, the World Coal Association states that coal is a fossil fuel, i.e. the transformed residues of prehistoric vegetation, developed and formed throughout millions of years into energy containing coal. Greenpeace lists strip mines as the most harmful since it leaves permanent scars on the environment, including soil erosion and ruination of agricultural land, leading to the pollution of waterways when topsoil is being washed by rain, mixing up natural landscapes. 

Another environmental problem caused by coal, estimated by Greenpeace, are coal fires that can burn for decades, or even centuries, polluting our environment with chemicals and toxins that are invisible to the human eye. Greenpeace, which is campaigning to stop investments to any fossil fuel projects, has witnessed and published a case study/full report about Coal Mines Polluting South Kalimantan ́s Water. (Greenpeace, December 2014.) The report summarizes and reveals that intensive coal mining activities in this Indonesian region has led to the release of toxic pollution from coal mining into rivers while violating national standards for wastewater releases from coal mines.

While the damaging nature and risks of coal mining for the overall environment is well-known, the World Coal Association aims to develop and lead the global coal mining industry into a “pathway of zero emissions from coal” with advanced clean technologies allowing for the coal mining industry to minimize its impacts on the environment. The World Coal Association suggests that HELE power generation could reduce CO2 emissions from coal mining by more than a third. 

How about methane emissions from coal mining? The United States Environmental Protection Agency EPA estimates that methane emissions from coal mining will continue to increase and be responsible for nine per cent (9%) of total global methane emissions by 2020, whereby methane is many times more powerful as a greenhouse gas than carbon dioxide. According to various estimations, methane (CH4) is up to 25 times as powerful as a greenhouse gas in comparison with carbon dioxide (CO2). 

Are zero methane emissions from coal mining a possibility? Learn more by watching ICE-CMM Poland ́s video “Clark Talkington – Achieving nea zero methane emissions from coal mine mining”:

 

Note from author: I originally wrote and published this article on December 4th 2017 on my website annemariayritys.com and on LinkedIn as a part of my climate change research. USGS states that in addition to peat, which is a precursor to coal, the four actual types of coal are anthracite, bituminous, subbituminous, and lignite. According to Leonard, Michaelides, and Michaelides (Energy Conversion and Management Volume 164, 2018), the substitution of coal with renewables can be optimized but not fully replaced. The World Coal Association lists electricity generation, steel production, cement manufacturing and the usage of coal as a liquid fuel as the four most significant purposes of the global coal industry. Moreover, the construction industry worldwide accounts for the vast majority of the need for steel and cement, which are used as building blocks in most of construction, unless cement and steel are being replaced with other options.  

Connect with me on Twitter @annemariayritys. For climate/environment-related posts only @GCCThinkActTank. Subscribe to my newsletter at annemariayritys.com to receive my latest posts delivered directly to you. 

Anne-Maria Yritys 2019. All rights reserved.