Texas Oil & Gas Holdings

Natural gas now accounts for about a quarter of global electricity generation. While in the medium term it is seen playing a major role supporting a transition to net zero energy systems, its longer-term use is uncertain in a world dominated by non-emitting renewable energies.

While burning natural gas does emit greenhouse gases, it contributes far less CO2 and air pollutants than many of the fuels it is increasingly replacing, especially coal. Natural gas use grew rapidly this past decade, accounting for almost one-third of total energy demand growth, more than any other fossil fuel. Its use in coming years is expected to keep growing strongly in all the scenarios studied by the IEA, with sharp divergences afterwards.

Its storability, its ability to be delivered through pipelines or liquefied and sent by ship, as well as the ability of gas-fired power plants to turn on and off quickly, allows natural gas to respond to both seasonal and short-term demand fluctuations and to provide back-up to the growing use of variable renewables such as wind and power. Still, as part of global efforts to reach net zero emissions, natural gas use is expected to come under pressure in some countries.

The natural gas market is increasingly globalised, driven by the availability of shale gas and rising supplies of tradeable liquefied natural gas. The growth of the gas trade, as well as a shift away from long-term contracts towards spot pricing in many markets, has created greater interconnectivity between markets with demand or supply shocks in one region now having global implications, on both gas and electricity prices.