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plenty of scope for demand for plastics to rise, polluting fuels, and on significant investment in
especially in developing economies.” new gas infrastructure.”
In STEPS, oil demand rises by 5mn bpd in Some $70bn per year will be needed to
2021 and returns to pre-crisis levels by around expand infrastructure to enable greater gas use
2023, rising thereafter by 0.7mn bpd annually up under STEPS, the IEA said. But economic fallout
until 2030. In the following decade growth slows from the pandemic will limit how much fund-
to 0.1mn bpd per year. This means consumption ing is available to major gas consumers. What
will exceed 104mn bpd in 2040, versus 97.9mn is more, this is the IEA’s first outlook to predict
bpd last year. a decline by 2040 in gas demand in advanced
In DRS, consumption does not get back to economies under STEPs. Gas will face stiff com-
the pre-pandemic level until 2027 and flattens at petition in these markets from renewables. In
just under 100mn bpd. Under SDS, meanwhile, the EU, demand will not return to the 2019 level,
demand contracts greatly to 92.5mn bpd in 2025, even though gas will benefit from the retiring
86.5mn bpd in 2030 and 66.2mn bpd in 2040. of coal and nuclear plants in countries such as
Germany.
Gas In DRS, demand will take until 2024 to
Gas demand will decline by only 3% this year, rebound to the level in 2019, as weaker power
according to the IEA, though this still represents consumption and subdued industrial activity
its biggest contraction since emerging as a major drag on growth rates. Gas exporters will also
fuel in the 1930s. Gas has proved more resilient struggle from low prices and “a delayed recov-
than oil and gas, as less gas use in commercial ery also casts a long shadow over the economics
and public buildings has been countered by of already sanctioned gas projects expected to
increased residential consumption. A decline in come online in the next few years,” the IEA said.
industrial demand was meanwhile offset by oil/ Revenue constraints will also mean less is
coal-to-gas switching. spent on infrastructure developments in coun-
Its outlook is also far stronger than for oil. tries with the most growth potential. In the DRS
Under STEPS, consumption will surge by 15% demand, consumption will grow by only 24% by
by 2030 and 30% by 2040, reaching 5.221 trillion 2040.
cubic metres. This growth will mostly be driven In SDS, gas demand rises by only 3.5% to
by gains in south and east Asian countries look- 4.166 tcm by 2025 and will then begin declin-
ing to improve their air quality and support an ing in the late 2020s, sliding back to 3.998 tcm
expansion in manufacturing. Gas will have a in 2030 and 3.554 tcm in 2040. Even in this sce-
25% share of the global primary energy mix in nario, however, gas will retain the same share in
2040, versus 23% last year. primary energy consumption in two decades’
Still, rates of growth will depend greatly on time that it had last year.
policy, the IEA notes. “There is a robust long-term case for gases
“Gas faces significant uncertainty as these in the energy system. In the SDS, there are ser-
economies emerge from the COVID-19 crisis,” vices that gases provide that it would be difficult
the agency said. “Despite a lower price outlook, to provide cost effectively using other sources,”
growth prospects for gas continue to rely heavily the IEA said, citing “high-temperature heat for
on policy support in the form of air quality reg- industry, winter heat for buildings and seasonal
ulations or other restrictions on the use of more flexibility for power systems.”™

Week 42 22•October•2020 www. NEWSBASE .com P5