IEA: NG Demand Growth to Slow 07/05 05:29
BERLIN (AP) -- The International Energy Agency says high prices for natural
gas and supply fears due to the war in Ukraine will slow the growth in demand
for the fossil fuel in the coming years.
In a report published Tuesday, the Paris-based agency forecast global demand
for natural gas will rise by 140 billion cubic meters between 2021 and 2025.
That's less than half the increase of 370 bcm seen in the previous five-year
period, which included the pandemic downturn.
The revised forecast is mostly due to expectations of slower economic growth
rather than buyers switching from gas to coal, oil or renewable energy. While
the burning of gas emits less planet-warming carbon dioxide than other fossil
fuels, methane released during the extraction process is a significant driver
of climate change.
"Russia's unprovoked war in Ukraine is seriously disrupting gas markets that
were already showing signs of tightness," said Keisuke Sadamori, the agency's
director of energy markets and security.
Efforts by European Union countries to wean themselves off Russian gas will
lead to a fall in pipeline exports from Russia to the 27-nation bloc of 55-75%,
the IEA said. At the same time the EU's purchases of liquefied natural gas have
diverted deliveries intended for other regions, such as Asia, which is
predicted to account for half the demand growth by 2025.
"We are now seeing inevitable price spikes as countries around the world
compete for LNG shipments, but the most sustainable response to today's global
energy crisis is stronger efforts and policies to use energy more efficiently
and to accelerate clean energy transitions," said Sadamori.
The agency's quarterly report said capacity is partly constrained by a slump
in gas infrastructure investments in the mid-2010s and pandemic-related
construction delays. Recent new investments are not likely to affect gas
supplies until after 2025, it said.