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| Fig. 1: Top 10 Natural Gas Producing Countries, where the horizontal bar is the natural gas production in billion cubic meters (bcm). [3] (Source: A. Donovan) |
Natural gas is an energy source and hydrocarbon consisting mainly of methane. [1] Natural gas is used as a fuel for power generation and heating as well as a feedstock for making materials and chemicals. [1] Natural gas is the second largest source of energy for power generation globally. [2] It is derived from the decay of organic materials under pressure and temperature for a long period of time deep inside of the Earth.
In 2020, the United States was the largest producing country of natural gas, with a total production of 914.6 billion cubic meters. [3] The second largest producer of natural gas was Russia, with a total production of 638.5 billion cubic meters. [3] These two countries are by far the highest producing countries of natural gas. The next five highest producing countries of natural gas are Iran, China, Qatar, Canada, and Australia, with production visible on the chart on the right. [3] Furthermore, the growth rate per annum of worldwide natural gas production for the time period of 2009-2019 was 3.1%, although worldwide production had decreased by 3.3% in 2020.
The largest exporting country of natural gas in 2020 was Russia, with 197.7 billion cubic meters of pipeline exports and 40.4 billion cubic meters of liquefied natural gas (LNG) exports, for a total of 238.1 billion cubic meters of natural gas exports. [3] The second largest exporting country of natural gas was the United States, with 76.1 billion cubic meters of pipeline exports and 61.4 billion cubic meters of LNG exports. [3] Other large exporters of natural gas include Qatar, Norway, and Australia. [3]
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| Fig. 2: Leading Natural Gas Exporting Countries, where the horizontal scale is billion cubic meters. The blue bar is for pipeline exports, and the orange bar is for liquefied natural gas exports. [3] (Source: A. Donovan) |
31% of European pipeline imports in 2020 came from Russia. [3] Note there are geopolitical concerns as well with natural gas imports from Russia in the European Union. For example, the Nord Stream 2 natural gas pipeline, a planned pipeline connecting Russia and Germany, has proven very controversial and had construction delays. [4] In response to Russian aggression in Ukraine in 2014 and subsequent aggressive actions, the United States has passed a number of sanctions against Russia and Russian energy, including PEESA, Protecting Europe's Energy Security Act, which placed sanctions on companies that own ships laying the Nord Stream 2 pipeline at depths of over 100 feet. [4] Meanwhile, the European Union placed sanctions on Gazprom non-gas subsidiaries but has refrained from any direct restrictions against the Russian natural gas sector, with many assuming that the EU is unwilling to sanction Russian natural gas due to dependence on Russian imports. [4] Transitioning away from natural gas in the long run could reduce the dependence of European countries on Russian imports.
Net-zero emissions laws have been passed by the European Union and 10 countries, signaling a potential long-term transition away from fossil fuels. [3] Note that natural gas production has less greenhouse gas emissions per unit of energy compared to coal and oil. For example, the carbon dioxide emissions per unit of energy produced from natural gas are 71% those from oil and 56% from coal. [5] Natural gas has been seen widely as a "transition fuel" to net-zero emissions due to the reduced emissions compared to oil and coal. [5]
In the short run, it is expected that the industrial and buildings sectors will drive natural gas demand growth. Demand growth is expected to be fastest in China, India, and other Asian countries. Electricity demand growth is projected this year to be the highest for the past 10 years, dominated by emerging markets as well as Chinese growth expected to account for half of electricity demand growth. [6] Furthermore, the potential growth in electric vehicles could lead to an increase in electricity consumption and demand as well as another source of demand growth. [7] However, the passage of net-zero emissions laws by the European Union and 10 countries could cause countries to transition away from natural gas in the long run, which is a long-term threat for natural gas producers. [3] Natural gas is viewed as a key transition fuel to net-zero emissions as mentioned before, which explains why production has grown steadily and natural gas is seen as the only (or one of few) fossil fuels whose share of primary energy production is expected to grow, at least in the short run. [2]
Natural gas production and exports continue to be dominated by the United States and Russia. Natural gas is a global market which is not vanishing any time soon, and it is seen as a transition fuel to cleaner energy generation. Only time will tell if countries will transition away from natural gas in the long run.
© Alexander Donovan. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] A. Salehabadi et al., Energy, Society and the Environment: Solid-State Hydrogen Storage Materials (Springer, 2020).
[2] "World Energy Resources 2016," World Energy Council, 2016.
[3] "BP Statistical Review of World Energy 2021," British Petroleum, June 2021.
[4] M. Russell, "Nord Stream 2 Pipeline," European Parliament Research Service, PE-690.705, July 2021.
[5] F. Liang et al., "The Role of Natural Gas as a Primary Fuel in the Near Future, Including Comparisons of Acquisition, Transmission and Waste Handling Costs of as with Competitive Clternatives," Chem. Cent. J. 6 (Suppl. 1), S4 (2012).
[6] "Global Energy Review 2021," International Energy Agency, April 2021.
[7] "Summary Report on EVs at Scale and the U.S. Electric Power System," U.S. Drive, November 2019.