Global energy consumption is rising faster than anticipated, potentially leading to a significant shortfall in natural gas supply by the end of the decade, according to the International Gas Union (IGU). In its Global Gas Report 2024, released Tuesday, the Switzerland-based industry organization highlighted the risk that current decarbonization pathways and scenarios may be underestimating this growth.
The report warns that if natural gas demand continues to increase at the rate observed over the past four years, and production does not expand accordingly, a 22% global supply shortfall could occur by 2030. The IGU stressed the importance of ramping up investments to meet this growing demand.
“If demand continues to strengthen, the shortfall will be more pronounced, emphasizing the urgent need for increased investment,” the IGU stated.
The group also expressed concern that decarbonization scenarios, which inform policy decisions, may not fully account for the recent surge in energy consumption driven by data centers and cooling systems.
“These scenarios likely underestimate the actual rate of demand growth, creating imminent pressure on planners to ensure sufficient supply,” the IGU said.
The report highlights a significant disconnect between current consumption patterns and the assumptions underlying many decarbonization scenarios. The IGU emphasized the need for realistic planning that takes into account the scalability, reliability, and affordability of changing energy consumption patterns.
Global gas demand increased by 1.5% in 2023 compared to the previous year, with a further 2.1% rise expected in 2024, largely driven by strong demand growth in Asia. The report suggests that the energy targets set for 2030, even under less ambitious climate and energy scenarios, are unlikely to be met.
Natural gas remains crucial in addressing the so-called energy trilemma of sustainability, security, and affordability, according to the IGU.
“As we look ahead, the potential supply and investment gap in gas and other low-CO2 energies requires immediate attention,” the report concluded. “It is essential to cross-check scenario pathways with actual forecasts to avoid misalignment and ensure that energy supply keeps pace with evolving demand.”