Semafor Signals
Global gas market predicted to grow 50% by 2029 as energy transition picks up pace
Insights from Semafor, International Energy Agency, Grist, and Bloomberg
The News
The global natural gas market is estimated to grow by 50% over the next 5 years, a new Goldman Sachs research paper estimated, as investment in oil becomes less attractive and shifts toward short-term projects.
The bank estimated that the United States will lead the market for liquified natural gas supply, and that the added capacity could both cut export costs and curb the energy crisis that has stemmed from Russia invading Ukraine and incurring international sanctions on its gas business.
SIGNALS
Gas investment may grow but demand might not keep up
While Goldman Sachs predicts investment in the gas market will grow 50% over the next five years, the International Energy Agency has estimated that global gas demand will grow by 1.6% a year on average over a similar period. The global transition toward renewable energy and higher nuclear availability may reduce the demand for gas in established markets, while fast-growing economies in Asia are expected to drive what new demand there is, the IEA predicted. Overall, the global gas market has “entered a new and more uncertain period that is likely to be characterized by slower growth and higher volatility,” the director of energy markets and security at IEA wrote in 2023.
Gas is touted as ‘greener’ fossil fuel, but activists say it’s a climate disaster
Natural gas is promoted as a greener alternative to oil and coal because it is less dirty, and it is often portrayed as a “bridge” fuel to help smooth the transition to truly renewable sources. But climate activists have long argued this narrative is a form of greenwashing because of fracking’s environmental fallout, the pipes needed to transport the gas, and the emissions associated with it. Oil executives reportedly knew that portraying natural gas as environmentally friendly was misleading, according to documents presented to the US Congress, and would not meaningfully lower emissions. “They know this — natural gas is a climate disaster — yet they still promote it,” the president of a climate advocacy group told Grist.
Trends in renewables signal more growth
Countries are trying to cut carbon emissions and curb climate change — and for many, that has meant a significant reduction in oil and coal demand. In 2023, for the first time, renewable sources accounted for 30% of global electricity, according to a report by energy think tank Ember, a milestone reached primarily due to growth in wind and solar power. The latter grew particularly swiftly, with China being a top adopter. In parallel, a long-term decline in emissions was “inevitable” and “imminent,” one researcher at Ember wrote, as the world shifts its energy sources.
