World’s Largest Gas-Producing Nations: Natural Gas Will Keep the Lights on for the Next Generation

Abstract

Natural gas is almost certain to be the fastest-growing fossil fuel in the global energy mix for decades to come, comprising 28% of the global energy mix by 2050. Together with renewables, natural gas will likely fuel 60% of global electricity production, be it as pipeline gas, liquefied natural gas (LNG), or blue hydrogen. These are among the forecasts that appear in the 2020 edition of the GECF (Gas Exporting Countries Forum) Global Gas Outlook 2050 released in February 2021 and providing short-, medium-, and long-term energy projections based on assumptions regarding macroeconomic conditions, energy prices, and policies. The report is updated yearly and is the flagship publication of the organization, which represents countries that control 71% of global gas reserves. It is unique in that it focuses exclusively on the global gas industry, which today is providing for 23% of global energy needs. Headquartered in Doha, Qatar, the GECF is an intergovernmental organization comprising 11 member countries and nine observer states, established in 2001 by Russia and Iran. Moscow and Tehran had hoped that GECF would eventually morph into a “Gas OPEC” but that never happened. The organization’s analyses and forecasts do, however, present a worthwhile snapshot of how the world’s largest gas producers see the industry. Member states in GECF include Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela. Observer countries are Angola, Azerbaijan, Iraq, Kazakhstan, Malaysia, Norway, Oman, Peru, and the UAE. Unconventional Gas To Play Growing Role In its report, the GECF noted that unconventional resources will be playing a growing role in the market and that gas producers will need to emphasize unconventional projects to satisfy growing demand, as well as to invest heavily into exploration to identify and tap into new gas reserves and develop greenfield projects. “It is also important to highlight the increasing interest in hydrogen as a lever to support the deep decarbonization of the world’s economies,” Yury P. Sentyurin, GECF’s Secretary General, wrote in his introduction to the annual outlook. In mentioning hydrogen, Sentyurin is speaking about “blue hydrogen” which is produced from natural gas, and which, when combined with CCUS (carbon capture, utilization, storage) can marry commercial and environmental interests, further positioning natural gas as a transition fuel to bridge the gap between fossil fuels and renewable sources of energy. Blue hydrogen is in fact expected to satisfy half of the hydrogen demand projected worldwide by 2050, Sentyurin points out. Policies being set by countries in the European Union have focused more on costly “green hydrogen” produced from renewable sources; but not in the policies of other nations in regions of the world where growth in energy demand is expected to be the highest. Growth in European energy demand is largely flat.