Global gas demand slowed amid rising coal and renewable use
The IEA has said the demand grew just 1.2% in 2013
Global gas demand growth slowed last year as it struggled to compete with rises in coal and renewable energy use, according to the International Energy Agency (IEA). Total global gas demand increased by just 1.2% in 2013, to around 3.5 trillion cubic metres (cm), as sluggish economic activity, competition from coal and renewable energy in power generation and supply constraints all put pressure on consumption.
The IEA said that while gas being outpaced by coal and renewable energy has been a well documented trend over the past decade, it is unusual that gas demand growth is lagging behind oil consumption, which increased by 1.4% last year. Gas demand growth was particularly subdued in the non-OECD region last year, rising by just 1.2%. This is down from an average annual growth rate of 4.1% between 2000 and 2012.
The IEA said demand in non-OECD regions, which previously were "a backbone of demand growth" grew only slightly faster than OECD regions, at 1.1%.
Even the OECD region's gas demand growth was illusory, the IEA said, because it was driven by abnormal weather patterns such as the long winter in Europe in early 2013 and a cold end of the year in North America. If unusual weather had not boosted OECD gas demand last year, it would have fallen by around 1%.
China's gas demand remained the main driver behind the global increase last year, accounting for half of the total rise. However many other non-OECD regions showed modest growth, while demand even declined in non-OECD Asia and in the Former Soviet Union (FSU) and non-OECD Europe.
In Latin America, droughts forced power generators to resort to gas-fired plants, which caused resurgence in both gas demand and liquefied natural gas (LNG) imports.
The IEA remains optimistic for medium-term gas demand, which is expected to rise by 2% per year between 2013 and 2019, reaching 3.98 trillion cm. However this is down from a previous IEA forecast that global gas demand would rise by 4% per year.
China expected to comprise around 30% of the total increase, of 490 billion cm, in demand alongside the Middle East (22%), non-OECD Asia (15%) and OECD Americas (10%). Africa and Latin America are each expected to account for around 8% of the total demand growth.
More than half of this demand will come from the power generation sector across all regions while industry will account for around a third. However gas's share in total power generation is expected to rise by just 0.5% by 2019, comprising just 22% of the total. This is because of competition from cheaper coal and lower-carbon renewable energy sources in OECD regions, Latin America, non-OECD Asia and China. However gas use is rising in the transport sector which will boost consumption. The IEA expects gas use in road transport to double by 2019, reaching 93bn cm.