The so-called “golden age” of natural gas may have to wait a little longer as the IEA reported this week that natural gas demand is sputtering as the economies around the world—China being the most notable among them—stall. The FT reports:
“China is still in the driving seat when it comes to [global] gas demand growth, but it is a lot slower than it was before,” said Fatih Birol, executive director of the International Energy Agency. “This is one of the factors that stalled the golden age of gas.”
Subdued economic growth in industrialised nations — from the US to Europe — is also slowing global energy demand growth and creating “headwinds” for natural gas, just as it was expected to play a greater role in the global energy mix, Mr Birol told the Financial Times ahead of the release of the IEA’s six-year gas market outlook on Wednesday.
Any slowdown in natural gas demand has to be read as a setback for environmentalists, because the hydrocarbon—while undeniably a fossil fuel—emits roughly half as much carbon when burned as coal, and far fewer of the deadly local air pollutants. Old King Coal has been dethroned by natural gas here in the United States thanks to the shale boom, which has produced a domestic glut of gas that has depressed prices low enough to make natural gas-fired power plants one of the cheapest available options (this year the EIA expects natural gas will overtake coal as the country’s largest source of electricity production for the first time). We’re seeing gas outcompete coal on price elsewhere, too—natural gas prices have historically been linked to the price of oil, so the collapse in crude prices over the past two years has made it an increasingly attractive option.
The modern environmental movement seems to think that economic growth and green progress are mutually exclusive goals, but time and again that’s been exposed as a myth. Now, with natural gas, we’re seeing how economic doldrums can hold back a more sustainable energy option.