October 4, 2022

Berlin (AFP) – Rising natural gas prices and supply concerns due to the war in Ukraine will slow growth in demand for fossil fuels in the coming years, the International Energy Agency said.

In a report published on Tuesday, the Paris-based agency forecast that global demand for natural gas will rise by 140 billion cubic meters between 2021 and 2025. This is less than half the increase of 370 billion cubic meters seen in the previous five-year period, which included the epidemiological downturn.

The revised forecast is mostly due to expectations of slowing economic growth rather than buyers switching from gas to coal, oil or renewable energy. While burning gas emits less carbon dioxide than other fossil fuels, methane is emitted during the extraction process. It is an important driver of climate change.

“Russia’s unprovoked war in Ukraine is seriously disrupting gas markets that were already showing signs of tightness,” said Keisuke Sadamori, acting director of energy markets and security.

The International Energy Agency said efforts by EU countries to wean themselves off Russian gas would lead to a 55-75% drop in pipeline exports from Russia to the 27-nation bloc. At the same time, EU purchases of LNG have shifted deliveries to other regions, such as Asia, which are expected to account for half of demand growth by 2025.

“We are now seeing inevitable price hikes as countries around the world compete for LNG shipments, but the most sustainable response to the current global energy crisis is stronger efforts and policies to use energy more efficiently and accelerate clean energy transitions,” Sadamuri said.

The agency’s quarterly report said production capacity is constrained in part by a slump in gas infrastructure investment in mid-2010 and construction delays linked to the pandemic. It added that the recent new investments were not likely to affect gas supplies until after 2025.

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