The Rise in Demand for Natural Gas Across the Globe
Natural Gas is the most useful source of all other energy sources and is a vital component of the world’s supply of energy. It is formed when the multiple layers of decomposing plants and animals matter are subjected to heat under the exterior of the earth over a period of millions of years. At the onset of the COVID-19 pandemic, there was about a 4% drop in 2020, however, the demand for natural gas is expected to rebound in 2021. Nevertheless, the adverse impact of the pandemic is anticipated to result in the loss of growth of around 75 billion cubic meters (bcm) in the forecast period 2019-2025. It is projected that there will be an average growth rate of 1.5% annually during this period. The major markets that got hit by the crisis were Europe, Eurasia, and North America, but are hoping to gradually recover most of their losses back in 2021 with the rise in the demand from the industrial and power generation segment.
The demand natural gas is likely to reach over 4370 billion cubic meters by the year 2025. The annual growth rate for natural gas is estimated at 1.8% every year since 2019. It is predicted that the natural gas demand in the Middle East would rise by around 100 cm/y and will reach up to nearly 660 bcm/y by 2025, with Iran and Saudi Arabia having the maximum growth. The Asia Pacific region is reported to consume half of the increased global natural gas produced in the forthcoming years primarily because of the development of the gas in China and India. The total LNG imports of the Asia Pacific region are expected to grow further from 69% in 2019 to 77% by 2025. Although China is the only single contributor to the production of natural gas across the globe, the region will alone hold 22% of the total global LNG demand in 2025 resulting in around 40% of growth in its total imports during the forecasted period.
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Natural Gas consumption in the countries like Central and South America is estimated to grow typically at the rate of 0.6% annually over the forecast period and would add approximately 5 billion cubic meters in coming years till 2025.
Factors Affecting the Production of Natural Gas
The biggest threat of natural gas extraction is the process by which a lot of water from the local reservoirs is taken which leads to pollution in the streams, and the natural gas results in the formation of methane in the air and hence pollute the air which leads to air pollution. The major disadvantage is that it is not a renewable resource. The burning of natural gas emits harmful gases like carbon monoxide, nitrogen oxide, and sulfur dioxide. The gas can also end with an explosion if it is not shipped correctly. Additionally, storing and handling of natural gas can be a concern and to an extent, its maintenance is expensive too.
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- It is cheap, Inexpensive
- It has lesser carbon dioxide emissions as compared to other fossil fuels, hence it is the most environment friendly fossil fuel.
- It is a reliable resource
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However, constraints such as, regulations around carbon emissions, unpredictability in oil and gas prices, probability of leakages while transporting and storage of natural gas, and high storage expense may limit the growth of the international market.