Natural gas

Natural gas is a versatile fuel that can be used for many purposes, and so the factors driving these increases in demand vary by region. In North America, natural gas provides a competitive alternative to coal for electricity generation, especially under policies that impose costs on higher-carbon fuels. Also, advances in unconventional U.S. natural gas production are expected to keep domestic supplies ample for the foreseeable future.

Efforts to reduce emissions help gas become the number-two emissions
Natural gas will be the fastest-growing major fuel to 2040, with demand rising by more than 60 percent. Much of this growth will come from electric utilities and other consumers shifting away from coal in order to reduce CO₂ emissions. By 2025, natural gas—which emits up to 60 percent less CO₂ emissions than coal when used for electricity generation—will have overtaken coal as the second most popular fuel, after oil.

Demand is expected to grow in every part of the world, but especially in the Non OECD countries in the Asia Pacific region, where demand for natural gas is expected to triple over the next 30 years. The Middle East also will see significant growth, while Russia/Caspian demand flattens.

Unconventional gas development will expand worldwide
Natural gas produced via conventional methods is growing in many regions, but declining in Europe and the United States. In the United States, this decline will be offset by growth in unconventional gas—the natural gas found in shale and other rock formations that was once considered uneconomic to produce.

In recent years, a combination of horizontal drilling and hydraulic fracturing has enabled the energy industry to economically access and produce this gas. In hydraulic fracturing, a solution—primarily water and sand, mixed with a small amount of chemicals—is injected into the rock to open very thin cracks, allowing trapped natural gas to migrate up to the well.

These technologies have been in use for decades. But by combining them, the United States has seen a turnaround in domestic gas production. Because these production methods are being applied in new ways—and also because shale resources can be located in areas that are not traditional oil and gas producers—the pace of future development will depend on industry, government and local communities working together to build understanding of the potential benefits of unconventional gas production, as well as proven practices used to protect groundwater and air quality, and minimize other environmental impacts.