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Gas surges globally as green groups cry foul

2018 was a “golden year” for natural gas with demand surging worldwide, the International Energy Agency (IEA) said Friday, prompting concern from environmental groups over the climate impact of the world’s new favourite fuel.

Demand for gas grew 4.6 per cent last year — the fastest rate since 2010 — and gas accounted for nearly half of the total increase in worldwide energy consumption, according to the IEA’s annual report on the fuel.

The surge in natural gas, which while cleaner than coal remains a fossil fuel that contributes to man-made emissions, was put down to ballooning production in the US and an insatiable demand for alternatives to coal in China.

“In 2018, natural gas played a major role in a remarkable year for energy,” the IEA’s executive director Fatih Birol said.

“Global energy consumption rose at its fastest pace this decade, with natural gas accounting for 45 per cent of the increase, more than any other fuel.”

The IEA, the global authority on energy, said that gas had helped play a role in reducing air pollution and limiting the rise of greenhouse gas emissions.

But environment and energy sector analysts said the gas boom could have dire effects on Earth’s climate, as scientific warnings of the need to slash fossil fuel use grow ever stronger.

“When it comes to gas, the IEA horse has blinkers on and is heading straight over the cliff of climate disaster,” Lorne Stockman, senior research analyst at Oil Change International, told AFP.

“Gas is not clean, cheap or necessary.”

‘Disastrous year for climate’

The 2015 Paris climate deal saw nations commit to limit global temperature rises to “well below” two degrees Celsius (3.6 Fahrenheit) and to a safer cap of 1.5C if possible.

The United Nations Intergovernmental Panel on Climate Change last year said that the best way to keep to 1.5C would be to slash natural gas consumption by a quarter by 2030 and 74 per cent by mid-century.

Gas consumption is forecast to grow at an average rate of 1.6 per cent each year until at least 2024, the IEA said.

Murray Worthy, senior oil and gas campaigner at Global Witness, said growth forecasts for natural gas were poles apart from the emissions scenarios laid out by the IPCC.

“A golden year for natural gas means it’s been a disastrous year for the climate,” he told AFP.

“In order to avoid the worst impacts of climate change the world’s use of gas needs to start declining now. Rather than celebrating record demand for gas the IEA should be calling for an end to investment in new gas production.”

The 184-page IEA report does not mention climate change.

‘No future in fossil fuels’

The consumption swell last year was largely down to China, where domestic gas use exploded 18.1 per cent as the government looks to wean itself off coal.

This was helped by a year-on-year jump in US gas production of 11.5 per cent, its highest growth rate since 1951. US shale gas production alone is expected to exceed 1 trillion cubic metres by 2024.

Gas is often painted as a “transition fuel” between oil and coal to renewables, as much of the necessary infrastructure already exists and supply is plentiful.

But there are signs the industry is cooling off. The IEA report notes low prices due to oversupply and weak investor interest. In addition, the report does not account for fossil fuel subsidies when predicting future demand.

“Natural gas markets are already oversupplied and prices are coming down,” said Tom Sanzillo, director of finance for the global energy finance think tank IEEFA.

“How will adding more natural gas to an already oversupplied market result in higher prices and profits for producers?”

Other organisations took issue with the IEA’s characterisation of gas as aiding air pollution and limiting climate change.

“Continued investment and reliance on fossil fuels and exploiting the last remaining dirtiest reserves of oil and gas is putting us all at risk of catastrophic climate change,” said Harjeet Singh, of the pressure group ActionAid.

“In a world where millions of lives and livelihoods are already being destroyed by rising global temperatures, there is no future in fossil fuel growth.”