Presentation by IEA Executive Director Dr Fatih Birol at the 2018 World Gas Conference

1. © OECD/IEA 2018
NATURAL GAS AND LNG IN THE
FUTURE OF GLOBAL ENERGY
Dr. Fatih Birol
Executive Director, International Energy Agency
IEA
World Gas Conference, 26 June

2. © OECD/IEA 2018
Global oil demand remains robust
Global oil demand is set to rise by 1.4 mb/d in 2019, with China and India accounting for almost half of the increase;
Petrochemicals are becoming increasingly important drivers of oil demand
0
0.4
0.8
1.2
1.6
2
2005-2014
mb/d
2016 2017 2018 20192015

3. © OECD/IEA 2018
Renewables accounted for almost half of the growth in electricity generation in 2017 and are set to meet a
higher share of the growth going forward
Annual electricity generation growth by technology
Renewables growing rapidly in the power sector
0
50
100
150
200
250
300
350
400
450
Renewables Other sources Renewables Other sources
Annual average (2000-16) 2017
TWh
Other sources
Hydro and other
renewables
Wind
Solar PV

4. © OECD/IEA 2018
Natural Gas – Outlook for the next 5 years
n Gas demand is in the fast lane, thanks to its flexibility & ability to ease
environmental problems
n Global gas markets are being re-shaped by three major structural shifts
Ø China becoming the world’s largest natural gas importer
Ø US gas production and LNG exports rising dramatically
Ø Industry displacing power generation as the leading growth sector
n The gas industry’s future remains bright, but it is not without challenges
Ø Gas price competitiveness & market reforms in emerging markets
Ø Curbing methane leaks along the value chain

5. © OECD/IEA 2018
Industry has taken over from the power sector as the drivers of gas demand;
China accounted for 30% of the increase in global gas demand in 2017
Growth in global natural gas demand
Natural gas – life in the fast lane
bcm
2000-2016
average
2017
30
60
90
120 Industry,
buildings &
others
Power
generation

6. © OECD/IEA 2018
China dominates world gas consumption growth
Global consumption passes the 4 tcm mark by 2022
China to account for almost 40% of growth driven by clean air policy target
World natural gas consumption growth for selected countries and regions, 2017-23
6
bcm
-20 0 20 40 60 80 100 120
Russia
Japan
Europe
Latin America
Africa
India
United States
Middle East
China

7. © OECD/IEA 2018
The United States takes the lion’s share of the growth in global supply
The United States accounts for almost 45% of global growth in natural gas production and 75% of growth in
LNG exports
Natural gas production growth for selected countries and regions, 2017-23
7
-50
0
50
100
150
200
United States Middle East China Australia Russia Egypt Europe
bcm
Domestic market Export market

8. © OECD/IEA 2018
2011-17
Power generation Industry Residential and commercial Other sectors
Industry surpasses power generation to lead growth
Industry accounts for over 40% of the growth in global gas demand to 2023, mainly on greater use for
petrochemicals and fertilizers
Natural gas consumption growth by sector (%)
8
2017-23

9. © OECD/IEA 2018
After remaining flat for 3 years, global CO2 emissions rose again in 2017, to an all-time high
Global energy-related CO2 emissions
After plateauing for 3 years, global emissions are on the rise again
CO2 emissions
Increase in 2017
5
10
15
20
25
30
35Gt CO2

10. © OECD/IEA 2018
China was a remarkable success story for electrification, bringing access to hundreds of millions in record time;
India achieved electricity access for all its villages in 2018; Today the challenge is concentrated in sub-Saharan Africa
Population without electricity access
Electrification success elsewhere, but sub-Saharan Africa still remains in the dark
500
1 000
1 500
2 000
2 500
1985 2000 2017 2030
million
Rest of World
Sub-Saharan Africa
India
China

11. © OECD/IEA 2018
Conclusions
n The versatility of natural gas means that it is well placed to grow, with LNG underpinning
the shift to a more competitive, global gas market
n Gas demand continue to rise in all IEA scenarios to 2040
n For the future of gas to remain bright, prices need to stay competitive in emerging
markets & industry needs to continue to improve its environmental performance
n Gas can play a role in overcoming the challenges of local air pollution, climate change &
energy access
n The IEA will continue to help governments & industry with timely data, rigorous analysis,
an all-of-technology approach and real-world solutions